Tuesday, August 23, 2011

New Illinois Home Repair and Remodeling Act Requirements Added for Catastrophic Loss Repairs

Earlier this month Governor Quinn signed into law Public Act 97-235.  The Act takes effect on January 1, 2012, and is aimed at protecting consumers faced with a catastrophic loss from contractor abuses at a time when they are most vulnerable.  Here's a summary of the changes:

1.  The Illinois Roofing Industry Licensing Act, 225 ILCS 335/5, et. seq, is amended by new Section 5.1 to require roofing contractors to post their license number and licensee's name on all commercial vehicles (see previous Section 5(b), a violation for which carries a $250 civil penalty.  The section also authorizes local government "code enforcement officials" to enforce this provision.

The Home Repair and Remodeling Act, 815 ILCS 513/1, et. seq, (the "HRRA") is amended as follows:

2.  Added new Section 18, "Repairs following damaging weather," providing requirements for contractors offering home repair and remodeling services to consumers who have suffered a "catastrophe" (definition in statute consists of various sudden, "Act of God" occurrences, but interestingly includes "drought", and also requires that the catastrophe "damages or destroys more than one residence").  Here are the requirements contractors need to know from new Section 18:
         
     a.  Don't advertise or promise to pay or rebate all or any portion of an insurance deductible as an inducement to get the work.  This provision is written broadly and includes "granting any allowance or offering any discount against the fees to be charged or paying the insured directly or indirectly associated with the property any form of compensation."

     b.  Don't take a payment from another contractor from out of the area to let them use your business name or license.

     c.  Roofing contractors are required to post their license name and number on all contracts, bids, and advertisements involving roofing work.

     d.  A homeowner signing a contract for repairs after a catastrophic loss can cancel the contract before midnight of the 5th business day after receiving notice that their insurer will not cover all or a portion of the claim, or the 30th business day after the insurer receives a properly executed "proof of loss" from the insured.  The contractor is required to give the homeowner notice of this right in the contract itself; the statute contains the required language.  

     e.  When signing the contract (for repairs following a catastrophic loss), the contractor must give the homeowner a "NOTICE OF CANCELLATION" form in duplicate, which the homeowner wishing to cancel the contract per the previous provision, would fill out, sign, and send to the contractor to effectuate the cancellation.

     f.  Within 10 days of receipt of the homeowner's notice to cancel the contract, the contractor is required to refund the homeowner any money advanced for work not yet performed.  If work has already been performed, the contractor is entitled to retain payment of the reasonable value of such goods and services related to the catastrophe.

     g.  A contractor in this situation shall not represent, or offer or advertise to represent, a homeowner as a "Public Adjuster," in violation of the Public Adjusters Law, 215 ILCS 5/512.51, et. seq (See our previous post on this blog on this issue).  Thus the contractor is not permitted to call in or file a claim to the insurer on the homeowner's behalf, for example.  The paragraph also provides that the contractor shall not "climb on a roof or inspect for exterior damage without the insured's express permission."

3.  In addition to the changes in new Section 18, Section 20 has been revised to add language to the consumer rights brochure regarding the above.  I have not yet seen a revised brochure from the Illinois Attorney General's Office, but one will likely be produced and posted to their website by January.
               

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