Is the Home Repair & Remodeling Act giving you a headache?
You’re not alone. Recently, the Third District Appellate Court issued an opinion in direct conflict with what we thought we knew about the Home Repair & Remodeling Act (the “Home Repair Act”).
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Here’s what we thought we knew. When a contract does not comply with the Home Repair Act, it is invalid and cannot form the basis of a breach of contract action or an action to foreclose a mechanic's lien. See K. Miller Constr. Co. v. McGinnis, 394 Ill. App. 3d 248, 913 N.E.2d 1147 (1st Dist. 2009); Smith v. Bogard, 377 Ill. App. 3d 842, 879 N.E.2d 543 (4th Dist. 2007); Central Illinois Electrical Services, LLC v. Slepian, 358 Ill.App.3d 545, 831 N.E.2d 1169 (3rd Dist. 2005).
Then, the Second District issued its opinion in Artisan Design Build, Inc. v. Bilstrom (2nd Dist. September 22, 2009), which stated that a violation of the Home Repair Act did not automatically preclude a contractor from recovering at law (foreclosure of mechanic’s lien) or equity (quantum meruit).
More recently, the Third District Court sided with the McGinnis line of cases in issuing its opinion in Roberts v. Adkins on January 7, 2010. Our discussion on the Artisan Design Build and Roberts cases are posted here.
However, just one week latter, it appears as though the Third District has changed its mind. In Fandel v. Allen, the Third District Court stated that the Illinois Legislature did not intend for the Home Repair Act to give a private right of action to consumers or to create an affirmative defense to mechanic’s liens.
The Fandel case involved a roofing contractor who had submitted a bid to replace the roof on the defendant’s home. The contractor provided the defendant with a written, itemized work order for the roofing work, which totaled over $9,000. The work order was not signed by the defendant, and the contractor failed to provide the defendant with the consumer rights brochure as required by the Home Repair Act. After the work was completed, the defendant issued a check for payment in full but later stopped payment on the check. The contractor filed a mechanic’s lien and then brought an action to foreclose on the lien. The trial court granted summary judgment for the defendant based on the contractor’s failure to comply with the Home Repair Act in obtaining a signed contract and providing the consumer rights brochure.
However, the Third District Appellate Court reversed in stating that the Home Repair Act contains no explicit or implicit language indicating that the Legislature intended to provide homeowners with a private right of action to enforce the Home Repair Act or that the Home Repair Act provide an affirmative defense to mechanic’s liens. The Third District Court further noted that the defendant did not claim that she was not aware of her rights; rather, she simply maintained that the roofing contractor’s procedural errors in failing to comply with the Home Repair Act invalidated the mechanic’s lien as there was no valid contact. In its decision, the Court cited the Mechanic’s Lien Act (“MLA”) in stating that the MLA does not distinguish between oral and written contracts. Additionally, the Court stated that violations of the Home Repair Act do not automatically invalidate a contract. Instead, the Court explained that the roofing contractor’s violations of the Home Repair Act were simply due to oversights “grounded in ignorance of the statute” and that the consumer protection interests were not injured as the defendant received the benefit of the bargain. Moreover, all of the elements of a valid contract were present (offer, acceptance, and consideration).
Accordingly, the Fandrel Court held that a valid and enforceable oral contract existed and that the contractor’s performance created a right to a mechanic’s lien. The Third District Court also added that a homeowner’s rights under the Home Repair Act may be asserted in a private cause of action under the Illinois Consumer Fraud Act where the homeowner sustains actual damages resulting from a violation of the Home Repair Act.
So, what do we now know? Given the different treatment of the Home Repair Act between the different courts, the Illinois Supreme Court may accept an appeal on this issue. Also, we will keep you updated on SB 2540, which would partially clarify parties’ remedies under the Home Repair Act. Until then, contractors must educate themselves on the Home Repair Act to ensure compliance as “ignorance of the statute” will, at best, subject you to lengthy and costly litigation.
Good post on an important and confusing issue. One distinction between Roberts and Fandel that may be important is that the contractor in Fandel at least had a written, reasonably particular work order, while the Roberts contractor had nothing in writing. That said, Justice Lytton's dissent in Fandel, as the author of the majority opinion in Roberts, is telling. It would be nice if the court had at least included some passing reference to the other case in one of the two opinions though. Instead we are left trying to explain a rather large elephant in the room.
I represent the defendant homeowner in Roberts v. Adkins. Roberts and Fandel were not decided the same because they substantially differ on the facts. In Roberts, not only did the plaintiff contractor give the defendants nothing in writing (until the payment demand letter), there was no agreement by the parties on the performance of any "extras" or the cost of any extras (contrary to their practice on a prior project), the contractor never completed the work, the work that he had done was done deficiently (by contractor's own admission), and the final bill was nearly five times the amount of the oral estimate given to the homeowner.
I am a homeowner located in the state of Florida who is questioning whether or not code enforcement has the right to our property and when. On a weekday we had 2 tile workers laying tile with the door open. A FL code enforcement officer came by, walked into our house without my husband or myself around(we were at work) and started taking pictures of our kitchen and living room, which is connected. Does this individual have a right to do so without owners present?
Thank you!
Interesting read. No matter where you are located, it is always wise to be as informed with the most accurate and up to date information as possible. And to the commenter above, Kate Johnson, I would suggest that you contact a local attorney familiar with your laws and/or your local code enforecement.
Knowledge certainly is power. And being armed with the most current up to date information is always best.
Very interesting read. This definitely goes to show that both parties need to be informed about the process of remodeling & home repair in order to avoid situations like these.