Illinois Home Repair and Remodeling Act: Contracts and Penalties

The Illinois Home Repair and Remodeling Act (815 ILCS 513) sets the ground rules for residential contractors: a written contract before any job over $1,000 begins, a state-drafted consumer rights pamphlet handed to the homeowner, and liability insurance kept in force while the business operates. Violations are treated as unlawful practices under the Illinois Consumer Fraud and Deceptive Business Practices Act, which lets the state seek civil penalties of up to $50,000 and lets homeowners sue for actual damages plus attorney fees.¹

What Work the Act Covers

The Act reaches work that improves, repairs, replaces, or adds to residential property: driveways, swimming pools, porches, kitchens, bathrooms, roofs, fences, garages, electrical wiring, plumbing, and central heating or air conditioning. “Residence” means a single-family home or a multi-unit building with six or fewer apartments, condos, or townhouses. Buildings with seven or more units fall outside the Act, and so does original new construction.¹

Several categories are specifically excluded. Selling, installing, cleaning, or repairing carpets is not covered. Neither is repairing, installing, or connecting refrigerators, ranges, washing machines, water heaters, garage door openers, and similar appliances, as long as the work is done by employees or agents of the merchant that sold the appliance or sells that type of product. All landscaping work is excluded. A contractor whose business is limited to excluded work has no obligation under the Act to produce a written contract, insurance, or the pamphlet.

The $500 and $1,000 Thresholds

Two separate dollar figures decide which rules apply. Any maintenance, service, or repair costing less than $500 is not “home repair and remodeling” under the Act at all, so none of the requirements are triggered. A handyman replacing a faucet for $400 is outside the statute.¹

Between $500 and $1,000, the contractor must give the homeowner the consumer rights pamphlet, but a written contract is not required and no signed acknowledgment of receipt is needed. Once the project passes $1,000, the full requirements kick in: a written contract or work order before the work starts, and a signed Consumer Rights Acknowledgment Form.²

What the Written Contract Must Contain

For any project over $1,000, the contractor must present a written contract or work order for the homeowner’s signature before starting work. The statute requires four things in the document:

The total cost, with parts and materials listed in reasonable detail, plus any charge for the estimate.
The contractor’s business name and address.
A description of how change orders will be handled.
If the business address is a P.O. box or mail-receiving service, the contractor’s residential address as well.²

The Act does not require the contract to include a payment schedule or projected start and completion dates. Those terms are worth negotiating in, but they are not statutory. A homeowner who wants deadlines or a milestone-based payment plan should ask for them expressly.

Arbitration and Jury Trial Waivers

If the contract contains a binding arbitration clause or a waiver of the right to a jury trial, the contractor has to disclose those clauses before the homeowner signs. The homeowner then accepts or rejects each clause individually by writing “accept” or “reject” next to it and signing in the margin. Rejection counts as a counter-offer to proceed without the clause, which the contractor can accept or refuse. Any arbitration or jury-waiver provision slipped into the contract without this accept-or-reject process is void.¹

The Consumer Rights Pamphlet

Every contractor covered by the Act must give the homeowner a copy of “Home Repair: Know Your Consumer Rights” before the contract is signed. The pamphlet’s text is written into the statute itself and covers warning signs of fraud, contract advice, payment guidance, and what to do when things go wrong.¹ It has to be a standalone document printed in at least 12-point type with legible ink.

For contracts over $1,000, the homeowner signs and dates a Consumer Rights Acknowledgment Form confirming receipt. The contractor or a representative signs and dates it too, and the form must show the business name and address. The acknowledgment is a duplicate built into the pamphlet: the contractor keeps the original and the homeowner keeps the copy.³ Below $1,000, the pamphlet still has to be handed over, but no signed acknowledgment is required.

Insurance the Contractor Must Carry

A home repair and remodeling business must carry liability insurance for as long as it operates, with these minimums:

Bodily injury: $100,000 per person and $300,000 per occurrence.
Property damage: $50,000 per occurrence.
Code noncompliance: $10,000 per occurrence for work that does not meet applicable state, county, or municipal building codes.¹

One exception exists. A contractor with a net worth of at least $1,000,000, verified by a financial statement prepared within the past 13 months, is exempt and can effectively self-insure. Most small firms carry the coverage rather than document a seven-figure net worth. Before work begins, ask for a current certificate of insurance.

The Three-Day Right to Cancel

When a contractor or salesperson comes to a homeowner’s residence and gets a contract signed on the spot for $25 or more, the homeowner has three full business days to cancel. The contract must include a Notice of Cancellation in bold 10-point type explaining the right, and the contractor must also mention it verbally.⁴

The right does not apply to every home visit. If the homeowner initiated the contact and specifically asked the contractor to come out for a repair, that requested work is not subject to the three-day window. Anything the contractor upsells on top of the requested repair is subject to cancellation.⁵ Transactions handled entirely by mail or phone, with no face-to-face contact, are also outside the rule.

Homeowners aged 65 or older who signed a contract with an uninvited solicitor in their home get up to 15 business days to cancel.⁴ In a true emergency, the cancellation right can be waived, but only through a personal, handwritten statement from the homeowner describing the emergency and expressly waiving the right.

State Penalties for Violations

Violating the Home Repair and Remodeling Act is a violation of the Consumer Fraud and Deceptive Business Practices Act, which gives the Illinois Attorney General and any county State’s Attorney the full range of Consumer Fraud Act remedies, including court orders that can shut down a contractor’s operations.¹

Civil penalties run up to $50,000 for an unlawful practice. Where the court finds the contractor acted with intent to defraud, the $50,000 cap applies per violation, so penalties stack when multiple homeowners were defrauded. When the victim is 65 or older, the court can add another $10,000 per violation on top.⁵

Homeowner Lawsuits and Attorney Fees

Section 30 of the Home Repair Act lets a homeowner who suffers actual damages from a violation sue the contractor under Section 10a of the Consumer Fraud Act.¹ A court can award actual economic damages, injunctive relief, and reasonable attorney fees and costs to the prevailing party.⁵

Two practical points. You have to prove actual damages tied to the violation; a missing pamphlet is a technical breach, but if it did not cost you money, a court has little to award. And the statute of limitations is three years from when the cause of action accrued. Wait longer and the claim is barred no matter how clear the violation.

The attorney-fee provision is what makes these cases feasible. Legal fees would otherwise swallow the recovery in most remodeling disputes; with fees available to the prevailing party, attorneys will take the cases and contractors have a real incentive to follow the rules from day one.

Effect on Mechanic’s Liens

Noncompliance can also cost a contractor the right to enforce a mechanic’s lien. Illinois appellate districts have split on the question. Some have held that a contract made without complying with the Act is void, barring the contractor from collecting anything, including under equitable theories like unjust enrichment. Others have held that noncompliance does not automatically invalidate the contract, and that the homeowner’s remedy is a Consumer Fraud Act claim rather than voiding the deal.

For a homeowner facing a lien from a contractor who skipped the written contract or the pamphlet, the Act’s requirements are a serious argument for challenging enforcement. For a contractor, the message is simpler: a few pieces of paper can decide whether months of work get paid for.

1
Justia. Illinois Code 815 ILCS 513 – Home Repair and Remodeling Act
2
Illinois General Assembly. Illinois Code 815 ILCS 513/15 – Written Contract; Costs Enumerated Requirements; Contents
3
Illinois General Assembly. Public Act 097-0235
4
Illinois Attorney General. Three Day Right to Cancel Home Repair
5
Justia. Illinois Code 815 ILCS 505 – Consumer Fraud and Deceptive Business Practices Act