There is a saying in the construction industry that there will always be some “bloodletting” in any given construction project and that the goal is to minimize the amount of that bloodletting. 

To decrease the amount of bloodletting which may be suffered by both homeowners and contractors in home repair and remodeling projects, the State of Illinois passed the Home Repair and Remodeling Act (the Act) in the year 2000. Generally, the Act requires that for any home repair, renovation or remodeling activity, the contractor must comply with the terms set forth in the Act. Such terms of the Act include, but are not limited to, the following:

1. The preparation and use of a written contract which describes the work, the cost of the work, a description of the components and materials to be used in the project and the period of time for the commencement and completion of the work.

2. In the event the contractor fails to commence or complete the project within the described period of time, the homeowner may cancel the contract and may be entitled to a refund of any down payment or other compensation paid to the contractor.

3. The contractor must deliver to the homeowner a copy of a brochure entitled “Home Repair: Know Your Consumer Rights.” The contents of the brochure are set forth in the Act. The homeowner must acknowledge in writing that he/she has received a copy of the brochure.

4. In the event the contract may include arbitration clauses related to any dispute resolution, the contractor must advise the homeowner prior to execution of the contract of the presence of such arbitration clauses. The homeowner may accept or reject such arbitration clauses.

5. The contractor is required to maintain public liability and property damage insurance in the amounts as set forth in the Act.

6. The Attorney General of the State of Illinois is granted the power to restrain and prevent any violation of the Act by a contractor.

7. Any violation of the Act shall constitute a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.

Although the Act appears to be a foolproof plan for protecting the rights and interests of homeowners, the Act has not been without controversy, interpretation and some disappointed homeowners.

Under no circumstance is a violation of the Act by a contractor grounds for a homeowner to deny all payments to a contractor. Additionally, a contractor may be in violation of the terms of the Act, but will have other rights under Illinois law, including the right to file a mechanics lien claim. Finally, the contractor identified in a contract which fully complies with the terms of the Act may be denied the right to exercise one or more remedies set forth in the contract.

Beyond the strict terms of the Act, there are other actions which a homeowner can take to protect his or her rights and interests. So a contractor should, in addition to complying with the terms of the Act, also consider other practices and procedures to enhance and protect its rights and interests.