During summertime months many homeowners search for a contractor to repair or renovate their homes, but property owners must be aware that a repair project could turn into a nightmare if you fall prey to a home repair scam.
Con artists may never start or complete the work. Materials and workmanship may be grossly inferior to what was promised. Undisclosed charges for permits, cost overruns, and other fees may significantly increase the total cost of the repairs. The selection of a qualified and reliable home repair contractor can be a difficult task, and consumer complaints about contractors are among the most common situations reviewed by the Consumer Fraud Unit of the Cook County State’s Attorney’s Office.
“Most home repair and remodeling companies are operated by honest people, but there are some unscrupulous people who prey on trusting consumers. There are warning signs that homeowners can look for and steps that they can take to avoid becoming the victim of home repair fraud,” said Cook County State’s Attorney Kimberly Foxx.
The Cook County State’s Attorney’s Office, Consumer Fraud Unit, recommends the following precautions to avoid disappointment in your dealings with home repair and remodeling contractors.
- RECOMMENDATIONS AND REFERENCES: Find a reliable contractor through recommendations from your insurance company or through referrals from satisfied customers. Ask each contractor for references and a written estimate. Contact the references and ask them if they were satisfied with the home repairs provided by the contractor.
- BETTER BUSINESS BUREAU CHECK: Contact the Better Business Bureau (www.chicago.bbb.org or 312-832-0500) and obtain a reliability report about a contractor. A reliability report will disclose if anyone has filed a complaint against the contractor within the last three years and, most importantly, if the contractor has resolved the complaint to the satisfaction of the customer.
- RELAX: Be skeptical of any door-to-door salesperson who claims to have just completed a nearby job and offers you a great price because there are leftover materials. Don’t feel pressured by a request for an immediate decision or by a statement that an offer is good “only if you act now.” Compare the estimates of a number of contractors and do not select a contractor solely on the basis of the lowest price or estimate.
- VERIFY LICENSES: General contractors or electricians are not required to be licensed or certified by the state, but most local municipalities require them to be licensed, bonded, and insured. On the other hand, state law requires plumbing contractors and plumbers to be licensed by the Illinois Department of Public Health, Plumbing Program (www.idph.state.il.us or 217-524-0791) or the City of Chicago, and roofers must obtain a license from the Illinois Department of Financial & Professional Regulation, Division of Professional Regulation (www.idfpr.com or 800-560-6420). Ask a roofer or plumber to provide you with his or her state license number or a copy of the license. Ask a general contractor or an electrician to provide proof of a local license.
- GET IT IN WRITING: Don’t rely on oral promises. Make sure that all of the important promises and representations made to you by the contractor are also incorporated in the contract or estimate. Request a copy of any estimate, sales contract, receipt, or application for financing.
- CONTRACT REVIEW: Read a contract carefully before signing. Don't sign a contract with any blank spaces. In general, under Illinois law, only contracts signed at your residence qualify for the three-day period to cancel the contract and obtain a full refund. Consider all other contracts to be final.
- PAYMENT OF A DEPOSIT: Don't pay for the entire job prior to the start of work. However, the payment of a deposit or advance payment for building materials is customary and fair in the home repair and remodeling industry. Many contractors will accept 1/3 payment before work begins, 1/3 when the project has reached the halfway point and 1/3 when all work has been completed to the customer’s satisfaction. Obtain a receipt for any monies paid to the contractor. If possible, use a credit card to pay for the home repairs.
- LIEN WAIVERS: Find out where the contractor will obtain his materials and whether the contractor plans to use any sub-contractors. You should obtain a lien waiver from the contractor or sub-contractor at the same time that you make a payment for materials and work. A lien waiver constitutes proof of payment and is a defense if the contractor or sub-contractor later files a mechanic’s lien against your property.
- MANDATORY INSURANCE COVERAGE: Under Illinois law, most contractors are required to carry minimum amounts of insurance for property damage, bodily injury, and improper home repair. Contractors, unless they maintain a net worth of $1,000,000, must obtain and maintain public liability and property damage insurance in the amount of $100,000 per person and $300,000 per occurrence for bodily injury and $50,000 per occurrence for property damage. Even if the contractor has provided you with proof of full insurance coverage, as an additional safeguard, confirm that your homeowner’s policy covers accidents to persons working on your property.
- DOCUMENT ANY DIFFICULTIES WITH THE CONTRACTOR: If problems arise with the contractor, prepare a list and take photographs of the work and materials already furnished to you. Document all of your efforts, including telephone conversations and meetings, to resolve the dispute. Try to acquire as much information from the contractor about his reasons for nonperformance so that this information can be provided later to a private attorney or the authorities.
- SEND A DEMAND LETTER: If telephone calls and meetings do not resolve the dispute, you should notify the contractor in writing of the exact nature of the problem. This demand letter should request a refund or completion of the work within a reasonable time period of at least ten (10) business days, and it should be sent by regular and certified mail or hand-delivered. Retain a copy of this demand letter for your own records.
If you cannot resolve the dispute on your own and you feel that you have been the victim of fraud, the Consumer Fraud Unit of the State’s Attorney’s Office may be able to help you recover your losses, prosecute the person or business responsible for the fraud, and prevent other members of the public from falling victim to the same scheme. The Consumer Fraud Unit relies on complaints from members of the public to prosecute individuals and businesses engaged in fraudulent practices.
To initiate a complaint with the Consumer Fraud Unit, please call 312-603-8600 from 8:30 AM to 4:30 PM on weekdays. The Consumer Fraud Unit is staffed by specialists, and Spanish language service is available. In some cases, you will be asked to file a written complaint with the State’s Attorney’s Office, and in other situations, you may be referred to another government agency, private organization, or resource.
Please visit the State’s Attorney’s website to download a Home Repair Fraud Complaint Form available in the “Resources” section.