HBAI Newsroom - State Laws You Should Know!


Bill Ward, Executive Vice President, HBAI

State Laws You Should Know
Bill Ward, Executive Vice President, HBAI
Home Repair & Remodeling Act

For years, HBAI has successfully lobbied that registration and licensure of builders and remodelers would do little in the fight against consumer fraud. Only legitimate contractors would pay licensure fees and take examinations, while "flyby niters" would continue to operate under the radar of state government regulation.

In 1999, Illinois Attorney General Jim Ryan reported that for five years running, home remodeling and repair fraud was the number one complaint registered at the Consumer Fraud Division of the A.G.’s office. HBAI was put on notice by Ryan that we either address this matter or it would be addressed for us.

But HBAI was deeply divided on how we should invite new regulation upon our own industry. Everyone felt that stiff penalties upon the perpetrators were essential but that licensure did not necessarily deliver the desired result. One thing was certain; we wanted to keep new home construction out of this problem that was primarily being caused by fraudulent and unqualified remodelers and repair persons.

The answer came over a matter of a few months with the Attorney General holding our feet to the fire and our HBAI Legislative Affairs Committee working together and trading ideas. Our goals eventually became mutual with those of the A.G.’s office:
• Improve communications and information between remodelers and consumers;
• Promote fair and honest business practices;
• Increase consumer confidence;
• Reduce disputes;
• Punish harshly, contractors who desire to do harm to consumers; and,
• Minimize government regulation on those remodelers who work in a fair and honest manner.

With these goals in mind, HBAI and the Attorney General created legislation that is now known as the Home Repair & Remodeling Act. Without registration, licensure, or the assessment of fees, the requirement of good business practices was bundled with stiff penalties to create a law to protect home owners from unscrupulous remodelers and repair persons. HB1177 passed the Illinois General Assembly in May of 1999, was signed by Governor George Ryan that summer, and became effective on January 1, 2000 – (Chapter 815 ILCS 513) of the Illinois Compiled Statutes.

For any work over $1000, a contractor must provide the following written materials:
• A Written Contract stating the total cost, parts & materials listed, and any charges for estimates
• The Contract must be signed by the Contractor and the Home Owner(s)
• The Contract must contain the business name, business address or home address of contractor
• Customers must receive and sign from the Contractor a copy of “Home Repair: Know Your Consumer Rights” pamphlet
• For work under $1000, the pamphlet must still be issued to the Customer. A contractor must also carry the following insurance:
• Public Liability & Property Damage Insurance in the amount of $100,000 per person and $300,000 per occurrence of bodily injury
• $50,000 per occurrence for property damage
• $10,000 per occurrence for improper repair or remodeling unless your net worth is $1 million or more.

Violations of this Act constitute a violation of the Consumer Fraud and Deceptive Business Practices Act and may be filed by the Attorney General or a State’s Attorney. Private parties may also bring action under the Illinois Consumer Fraud & Deceptive Business Practices Act.

Up until 2010, failure to comply with any of the provisions of this Act could mean that the remodeling or repair work completed could be granted to the customer with forfeiture of payment to the contractor. Even failure to provide the Consumer Rights Manual could cause this fate upon the remodeler. Over time, we witnessed home owners taking advantage of this extreme penalty; judges were allowing home owners to receive even room additions for free because the contractor failed to provide the Consumer Rights Manual.

With assistance from the Illinois Bar Association, new language was added by the General Assembly in 2010 which now allows judges to penalize contractors for actual damages; meaning they have the ability to prescribe a penalty that fits the crime (815 ILCS 513/30). Illinois still stands as one of 13 states without licensure of home builders or remodelers.

From time to time, we ask our local associations to send us written resolutions providing their position on the merits of licensure in our industry. Many of our members favor licensure, but the majority of local associations remain opposed. Until we see a strong change in this position, HBAI will continue to serve its membership by opposing contractor licensure while supporting reasonable consumer protection measures.

For more information regarding the Home Repair & Remodeling Act, feel free to contact me at (800) 255-6047, or, write me at billward@hbai.org.