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Archive                           September 2011


LEGAL ISSUES

Change in law for residential contractors and roofers


By Randall Green
CIB Contributor
Published: Sep. 2011

All contractors involved in roofing, home repair or home remodeling should be aware of recent changes to the Illinois Roofing Industry Licensing Act ("Roofing Act") and the Home Repair and Remodeling Act ("Home Repair and Remodeling Act"). Public Act 97-0235, which becomes effective on Jan. 1, 2012, makes a few notable changes to the Roofing Act and Home Repair and Remodeling Act. It is important for contractors to be aware of these changes because failure to comply with the respective acts can result in felony convictions, license revocation and hefty fines.

Roofing:

Any person or company that holds itself out as a roofing contractor in Illinois or does work for others involving construction, reconstruction, alteration, maintenance, repair or waterproofing of roofs in Illinois, is required to be licensed under the Roofing Act or face a fine up to $5,000 per offense for unlicensed practice. In addition to setting insurance, examination and surety bond requirements, the Roofing Act requires that the contractor's name and license number (as they appear on the license) be affixed on all contracts, bids, building permits, commercial vehicles and advertisements.

Failure to display the roofing contractor's name and license number on all contracts, bids, permits and advertisements can result in a Class A misdemeanor and a fine of $1,000 per day of the offense. Other violations of the Roofing Act can carry fines up to $10,000 per violation under the most egregious circumstances.

However, it may come as somewhat of a relief to roofing contractors that, as of Jan. 1, 2012, the requirement that the name and license number appear on all commercial vehicles will carry a lesser fine of $250, which will be dismissed if the violation is corrected before a scheduled hearing.

Home repair and remodeling:

The Home Repair and Remodeling Act currently requires a contractor offering repair or remodeling services in excess of $500 to provide the customer with a copy of the "Home Repair: Know Your Consumer Rights" brochure, which can be found at the Illinois Attorney General website, www.illinoisattorneygeneral.gov. For any goods or services over $1,000, a written contract is required and the acknowledgment portion of the pamphlet must be signed by the contractor and the consumer, with the original to be retained by the contractor and a copy given to the consumer.

Under the Home Repair and Remodeling Act, if a sale for services is made at the consumer's home, the consumer has three days from the date of signing the contract to cancel the contract, which right cannot be deprived by the contractor initiating work.

Most of the revisions to the Home Repair and Remodeling Act involve conduct associated with insurance-related repairs. Under the revised Act, a contractor cannot offer to pay or rebate any portion of an insurance deductible. The revised Act also gives the consumer of services to be paid from insurance proceeds the right to cancel the contract within (i) five business days of receiving notice from the insurer that all or any part of the claim or contract is not a covered loss under the consumer's insurance policy, or (ii) thirteen business days after the insurer has received a proof of loss from the consumer. Along with the initial contract, the contractor must also provide the insured a form of Notice of Cancellation that complies with the new law.

If the consumer terminates the contract within the dates permitted, the contractor must return any payments, partial payments, promissory notes or deposits, except that a contractor is entitled to retain payment for the reasonable value of goods and services necessary to prevent further damage.

Further, under the revised Act, the contractor may not represent the insured on any claim, file a claim for the consumer, or call the insurance carrier on the consumer's behalf. The revisions do not, however, prevent the contractor from providing an estimate of repairs to the insurer, conferring with an insurance company representative about the damage to the insured's property, or discussing repair or replacement options with the insurance company.

Conclusion:

Contractors need to be familiar with the Roofing Act and the Home Repair and Remodeling Act, as well as the upcoming changes effective Jan. 1, 2012. The primary purpose of these laws is to protect consumers, but contractors must also be familiar with the law to protect themselves from possible license revocation, criminal charges and fines. Contractors need to provide the necessary disclosures and make sure their contracts incorporate certain provisions required by the respective acts, so as not to find themselves in a position of having furnished work only to have the underlying contract voided, leaving the contractor with little chance of getting paid.

Randy Green is an attorney at Meyer Capel in Champaign. He can be reached at 217-352-1800 or rgreen@meyercapel.com.

This article does not constitute legal advice, nor does it create an attorney-client relationship.

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