Page 7 - John Hundley 2010

Sharp Thinking

No. 31 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. March 2010

Appeals Panels Split on Home Repair Act

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By Barbara L. Forrest, Barb@lotsharp.com, 618-242-0246
What happens when a contractor fails to obtain a signed contract or to otherwise comply with the
Home Repair and Remodeling Act? Can a homeowner use that failure to avoid paying for work done?

That Act (815 ILCS 513), which became effective in 2000, impacts both
homeowners and businesses involved in home repair or remodeling. It was enacted
to protect consumers, and it places numerous requirements on persons providing
home repair and remodeling services. It requires the contractor, prior to starting any
work for over $1,000, to furnish the customer a written contract or work order that
states the total cost, contains an arbitration or waiver-of-jury-trial clause, and
provides proof the owner either “accepted” or “rejected” and signed the document.
The contractor also must provide the consumer with a copy of the “Home Repair:
Know Your Consumer Rights” brochure and have the consumer sign an acknow-
ledgment form. Forrest
Can a contractor’s failure to comply with the Act be used by the homeowner to avoid paying? Some
courts say “yes.” Panels in Illinois’ Third and Fourth Appellate Districts have denied contractors’ claims
due to failure to obtain written contracts. Central Ill. Elec. Serv., LLC v. Slepian, 358 Ill.App.3d 545 (3d
Dist. 2005); Smith v. Bogard, 377 Ill.App.3d 842 (4th Dist. 2007). In these cases, failure to comply with
the Act barred the contractors from recovering any amounts they claimed for work performed –
even under quantum meruit, a theory allowing a party to receive the fair value of work and materials
where recovery under contract theory is impossible.

Recently, however, other appellate panels have disagreed. In K. Miller Const. Co. v. McGinnis,
394 Ill.App.3d 248 (1st Dist. 2009), an owner was a real estate attorney and the
contractor was a friend who had performed remodeling work for him in the past.
They reached an oral agreement in which the owner initially agreed to pay
$187,000, but then they expanded the project to over $500,000. Miller completed
the project based on the expanded plans and the owner allegedly approved the
work. However, he then refused to pay more than $177,580.33. Miller filed a
three-count claim, but the court dispensed with the contract and mechanic’s lien
claims, saying that the Act precluded such actions in the absence of a written
contract. However, the court held that on the facts of that case quantum meruit should be allowed.

Miller is only one of several recent cases reaching divergent results under the Act. For
example, both the result in Slepian and the Miller court’s view on the mechanic’s lien are called into
question by Fandel v. Allen, __ Ill.App.3d __, No. 3-08-0237 (3d Dist. corrected opn. March 17, 2010).
There Fandel submitted a written work order, but he did not provide the brochure and did not have Allen

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Barbara L. Forrest is Real Estate Closing Agent with The Sharp Law Firm, P.C. She was assisted on this article by
attorney John Hundley.

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