Thursday, September 23, 2010

Illinois Supreme Court Weighs In on Home Repair and Remodeling Act

The Illinois Supreme Court issued an opinion today in K. Miller Construction Co. v. McGinnis, Case No. 109156, holding that a contractor who violated the Illinois Home Repair and Remodeling Act (HRRA), 815 ILCS 513/1 et. seq, by not working under a written contract and failing to give the homeowner the consumer rights brochure required by the HRRA, still had a right to be paid for its work under both legal and equitable theories.  The First District Appellate Court had held last year that the contract was void as against public policy, but that the contractor still had a right to be paid for its work under the equitable theory of quantum meruit (literally, "as much as he has deserved").

In July the HRRA was amended to clarify that a homeowner who suffers actual damages as a result of an HRRA violation has recourse under the Consumer Fraud and Deceptive Business Practices Act (CFDBPA), 815 ILCS 505/1 et. seq.  However, as previously discussed on this blog, exactly how courts would interpret the new HRRA language remained to be seen.  The Second District, for example, noted in Fleissner v. Fitzgerald, Case No. 2-09-0805, its view that the legislative intent in changing the HRRA was to confirm the First District's holding in McGinnis.  Today the Illinois Supreme Court has instead confirmed that the new HRRA confirms that the legislative intent was not to require oral contracts in violation of the HRRA to be void as against public policy.

This opinion will be viewed as a victory for contractors, and it should help to alleviate the risk of a homeowner using the HRRA as an excuse to not have to pay for a contractor's non-defective work, completed on time and pursuant to the parties' agreement, even if oral.  However, contractors would do well to take note of the caveats in that last sentence - if it's an oral agreement, it will be much more difficult to prove these issues.

HRRA ASIDE, IT IS IN BOTH PARTIES' BEST INTEREST TO MEMORIALIZE THE AGREEMENT IN WRITING!  Here's an excellent article from North Carolina construction law attorney Melissa Brumback, via Virginia construction law attorney Christopher G. Hill's blog "Construction Law Musings," on why it's important to get it in writing--two outstanding sources for construction law information and advice.

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