Hiring a contractor

Comparing offers is one of the simplest ways to protect yourself. The Illinois Attorney General advises getting more than one estimate and getting them in writing. The Consumer Financial Protection Bureau suggests written estimates from at least two to three contractors to compare offers. The FTC says a written estimate should include a description of the work to be done, materials, completion date, and the price. If there is a big difference among the estimates, ask for an explanation. A gap between prices often has a reason, and hearing it helps you compare.

Chicago's home repair license comes with its own rules about estimates. A licensed home repair business must prepare a written statement of repairs before doing any work, including the total cost of parts, labor, incidental services and any charge for preparing the estimate. It must tell you and get your approval before doing work that would cost more than the written estimate, and it is illegal to make you pay more than the estimate if you did not approve the extra costs before the work was done. When the job is finished, the city requires a written invoice that gives the business's name and address, describes all the work and parts in detail, and states the exact charge for each. Keep that invoice with your other papers.

Source: Illinois Attorney General · Consumer Financial Protection Bureau · Federal Trade Commission · City of Chicago

A contractor's paperwork tells you who you are dealing with. The FTC advises considering only contractors who are licensed and insured, checking with your state or county government to confirm a license, and asking the contractor for proof of insurance. In Chicago, a contractor in the city or doing business in the city needs a Home Repair license or a General Contractor license. The city suggests asking for the license number and checking whether any complaints have been filed against the contractor with the City of Chicago. A home repair licensee must print or show its name and license number on the front page of contracts or estimates, in advertisements and on its vehicles. The FTC also suggests checking with the local Home Builders Association and consumer protection officials for complaints. The Chicago permits and licenses page explains which city licenses cover which work.

Insurance matters if something goes wrong in your home. Illinois's Home Repair and Remodeling Act requires anyone in the business of home repair and remodeling to carry public liability and property damage insurance of $100,000 per person and $300,000 per occurrence of bodily injury and $50,000 per occurrence for property damage, unless the person has a net worth of not less than $1,000,000. The Attorney General suggests verifying that the contractor has this insurance. The City of Chicago notes that contractors should always be insured, but taking somebody's word for it can be risky. The Attorney General lists a contractor who refuses to provide proof of insurance and references when asked as a warning sign. The CFPB also suggests doing your own research and looking for online reviews.

Work on air conditioners and heat pumps adds one more credential. Section 608 of the Clean Air Act prohibits knowingly releasing refrigerant during the maintenance, service, repair or disposal of air-conditioning and refrigeration equipment. Certification is required for anybody whose maintenance, service or repair could reasonably be expected to break into the refrigerant circuit and release refrigerant. Technicians must pass an EPA-approved test to earn Section 608 certification, the tests are specific to the type of equipment, and the credentials do not expire. The EPA does not give the tests or issue the cards. It is fair to ask a technician who handles refrigerant about their certification.

Source: Federal Trade Commission · City of Chicago · Illinois General Assembly · Illinois Attorney General · Consumer Financial Protection Bureau · U.S. EPA

Illinois has a law written for this kind of work, the Home Repair and Remodeling Act. Its definition of home repair and remodeling includes central air conditioning, central heating, boilers and furnaces, among many other kinds of work. The definition leaves out maintenance, service or repairs under $500. The Act covers single-family homes and buildings with 6 or fewer units, and it does not apply to repairs in buildings with more than 6 apartments or family units.

For bigger jobs the law asks for paperwork before work starts. Before starting home repair or remodeling work over $1,000, the contractor must give you a written contract or work order to sign that states the total cost, including parts and materials and any charge for an estimate. For any contract over $1,000, the contractor must also give you a copy of the pamphlet "Home Repair: Know Your Consumer Rights" before you sign. The Attorney General says this document describes the necessary elements that should be in a contract for work. Read it before you sign anything.

Look closely at the fine print. If a contract has a binding arbitration clause or a jury trial waiver, you must be given the option of accepting or rejecting each one before you accept and sign the contract. If the contractor does not tell you about such a clause, or does not get your signed acceptance or rejection, the law makes that clause void. The contractor may reject the contract if you reject those terms. Chicago advises never signing a contract that has blank or unfilled spaces. Any changes to the contract should be put in writing and signed by both of you.

Source: Illinois General Assembly · Illinois Attorney General · City of Chicago

If you sign a contract at home, the law gives you time to change your mind. The consumer rights pamphlet says you have 3 business days from signing to cancel any contract if the sale is made at your home, and the contractor cannot take this right away by starting work, selling your contract to a lender or any other tactic. A person age 65 or older who buys home repair services from an uninvited solicitor may cancel within 15 full business days after the day the contract was signed, if the agreement was made at home. The law requires notice of the three day right to cancel to be given both out loud and in the written contract. The Attorney General says not to sign a contract that does not fully describe that right, fails to state the date of sale, or contains blank spaces.

There are exceptions to know about. If you started the contact and need the goods or services to meet an emergency, the three day right to cancel does not apply. It also does not apply if you negotiated the terms during an earlier visit to the business where the goods are displayed or the services are offered. When you are unsure, ask the contractor to show you the cancellation notice in the contract.

Source: Illinois General Assembly · Illinois Attorney General

How you pay is one of your best protections. The FTC warns that scammers ask you to pay for everything up front or only accept cash. It advises not paying the full amount for the project up front. Never make the final payment until the work is done and you're satisfied with it. The Attorney General also warns against high pressure sales tactics and prices that seem "too good to be true." The paying page covers payment schedules, rebates and the papers to keep.

Keep everything in writing. If a salesperson makes a spoken promise, the FTC says to get the promise in writing. The CFPB suggests recording who will pay for materials, the quantity and quality of materials, who will get any permits or licenses, the start and completion dates, the total price and payment schedule, and all verbal promises. Keep notes and copies of letters and documents for your files.

Source: Federal Trade Commission · Illinois Attorney General · Consumer Financial Protection Bureau

Most problems are best raised with the contractor first. The FTC says many disputes can be resolved at that level. Follow any phone conversation with a letter sent by certified mail, and request a return receipt so you can prove the company got it. If the contractor fails to begin or complete work within the contracted time, the Attorney General says you may cancel and may be entitled to a refund of payments made, on written demand by certified mail.

If talking does not fix it, there are official places to turn. The City of Chicago says consumers should file complaints online or by calling 311. If you believe you have been the victim of a fraud or a scam, the Attorney General asks you to submit a complaint to its office. Under the Home Repair and Remodeling Act, anyone who suffers actual damage from a violation may bring an action under the Consumer Fraud and Deceptive Business Practices Act. Your notes, letters and contract are what make any complaint clear.

Source: Federal Trade Commission · Illinois Attorney General · City of Chicago · Illinois General Assembly