Dealing With a Bad Contractor

The Illinois Home Repair and Remodeling Act requires contractors to provide written contracts for any project costing more than $1000. Despite the rule, many contractors don't put things in writing. Instead, they rely on oral contracts with homeowners.

Obviously, this can create problems for both parties. The issue that came up recently is what happens when a contractor relies on an oral contract and later wants to sue a homeowner who won't pay. If a contractor remodels a kitchen based on a series of oral agreements, does the fact that they violated the written-contract rule affect their ability to sue for payment? 

In the past, some homeowners were able to point to the violation and avoid a lawsuit for payment; the courts basically said that the contractor could not enforce an oral contract. Other courts came to the opposite conclusion.

Recently, the Illinois Supreme Court cleared things up. Contractors are allowed to sue if a homeowner won't pay, even if the contractor violated the Act by failing to provide a written contract. This doesn't mean the agreement is valid. The rules of contract law still apply. It just means that the contractor is allowed to pursue it.

This is good for contractors, but what does it mean for homeowners? It means you need to be more vigilant and get everything in writing. It creates an opening for scam artists to talk you into something you don't really want. It means those casual agreements made while talking with your contractor can be enforced.

Get everything in writing - start and end dates, description of the materials to be used, description of the work to be performed, detailed payment plan, any warranty or guarantee on the work, etc.

 Also, get several estimates and do your research on a contractor before hiring them. Check for complaints with the Better Business Bureau, ask if they are licensed (if required) and completely insured (ask to see proof), and ask the same questions about any subcontractors they may be using. Be wary of a contractor who requires complete payment upfront.

And know that you have three business days to cancel the contract, even if the work has already begun. There is some good information on how to protect yourself, and how to report a scam, on the Illinois Attorney General's website.

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Legal Tip Of The Day comes from Chicago attorney Alan Toback:  If its yours keep it yours . If you own property before your marriage and want it to remain yours, don't put your spouse's name one it.

 

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  • What is the citation, and what is the bottom line? Is it that the contractor can recover in quantum meruit, despite the oral contract being invalid, or is this another of that the plaintiff can sue but can't win ones? Obviously, the statute has no teeth if the contractor can still recover.

    Also with regard to getting detail, you are correct. When I was on the condo board, contractors would basically scrawl something like "Replace the driveway for $10,000." Then, afterwards, when the board invariably complained about undone work or the bad quality of the work (and rest assured, there was always some problem), the contractors were either gone, said they needed an extra $1,000, or took at least 6 months to return. It is now up to the board members to interview and select the contractors, as the management company apparently has no interest in supervising the contractors it presents to the board, and obviously has a relationship with (even worse when the contractor is the management company's maintenance subsidiary).

    Of course, the final straw was when I got into an argument with a board member who says he is a contractor about him making unauthorized commitments for the association, to which his answer was "I've been a contractor for 50 years. You don't know what you are talking about. And you called the building inspector" (which I did). So, maybe there is that certain ethos with contractors, just like certain hospitals telling newspapers that malpractice is a cost of doing business, and a patient pays an extra $20,000 for delivery of a baby to cover it.

    Again, I'm not making this up.

  • I don't have a case cite, but the contractor was Keith Miller and the homeowner was Joseph McGinnis so if you are so inclined you should be able to look it up that way.

    Bottom line is that a violation of the Act doesn't make invalid the oral agreement to the two parties. The contractor has to prove entitlement to what they are owed, the homeowner may have a separate remedy for violating the law. Moral of the story is to never have work done without a detailed contract. If a company doesn't have their act together for that part of the job then you shouldn't be surprised when the rest of the job goes south.

  • And one more thing. If you really want to protect yourself, write something in the contract to the effect of: "The parties agree that only items listed and agreed to in this contract are chargable. Any work performed outside of this contract will be considered gratis work for which no payment is recoverable."

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