How To Avoid The Minefield of Home Repair & Renovation

by: Greg Nagel
Ask Nagel Realty

How To Avoid The Minefield of Home Repair & Renovation - A Guide to Navigating Disputes With Your Contractor

Whether you’re a homeowner doing maintenance or home renovation or a professional investor, odds are you’ve been burned by contractors and construction work that was either done sloppily, incompletely, outright incorrectly, and even dishonestly.

There are a lot of great contractors out there, but sadly the field is also littered with many that are either not good at what they do or actual scammers. That said, the work itself is often subject to factors beyond even the best contractors’ control.  With clients changing their minds, surprises that are found once walls are open, and a lack of specificity in the contract on the exact materials and scope of work, there are lots of opportunity for disputes between contractors and clients.

When problems arise, efforts to rectify the issues are often unsuccessful, particularly when the contractor has already been paid.

So what can you do?  Here are a few tips to avoid issues, and a few suggestions on how to address problems when they arise.

Hire the Right Person – Duh!

The best way to avoid problems is to hire a competent, honest contractor.  Of course, this somewhat obvious advice is sometimes tough to pull off in real life.  Given the potential problems that can come from hiring the wrong person, between structural problems, potential lawsuits, and sleepless nights, it’s worth it to take the extra time to do more than the usual due diligence up front.

So how do you go about this?  Here are some pro tips:

Try to get at least three to three to six quotes – time invested here saves a lot more time later.

  • Ask around – your network of contacts can be your best resource. Call friends, post on social media, Ask Nagel Realty, talk to your neighbors – warm referrals from people who have used (and liked) contractors on similar projects are invaluable.
  • Make sure to include at least one vendor who caters to the high end. While their pricing may be out of reach, you can benefit from their knowledge and judge their pricing against other contractors. Sometimes “high-end” pricing isn’t as high as you might suspect – you won’t know that if you don’t talk to them.
  • It’s ok to let contractors know you’re shopping around – in fact, it’s preferable. That said, let them tell you how they would approach the project first before asking them about advice received from other bidder.
  • Interview customers of the contractor and / or view a current job
  • When possible, consider starting the work with smaller scope and if it goes well to expand from there.

Ask if they are licensed and insured/bonded

  • While licensed, insured and bonded contractors may be more expensive, they also offer some protection. They have a lot more to lose if they screw up.
  • If you do hire a licensed, insured contractor, be sure to get a copy of their Certificate of Insurance. If things go south as they sometimes do, you may be able to file a claim with the contractor’s insurance directly. At the very least, even the threat of this can sometimes compel a reluctant contractor to fix shoddy work.

Do your due diligence and then do it again.

  • Check to see if they have reviews on or
  • Check to see if there are any complaints or reviews with the Better Business Bureau (& to file a complaint). They also have their own guide to hiring contractors
  • Check with the city of Chicago Department of Consumer Affairs to verify the contractor is licensed. You can also file a complaint here under general consumer complaints or consumer fraud complaint.
  • Call the Illinois Attorney General to see if there are complaints against a contractor ( & to file a complaint).
  • Ask how long they have been in business and double-check their information, even if it means driving by their physical address.
  • Ask for references for the last two jobs completed.

Get all the details and terms about the deal before making a selection.

  • Ask them if they will warranty their work in writing.Get all the details and terms about the deal before making a selection.
  • Ask them upfront how long the job will take, and when they would start. Depending on job size, consider including penalties.
  • Discuss any relevant work rules like start and end times, access to the space and anything else that would impact your quality of life if you’re living in the space through the renovation.

Ask about details on payment. Do they need money upfront? If so, how much?  Once all these factors are taken into consideration, you can make your choice based on the best overall person for the job. As with most things in life, price should be a consideration, but not the only consideration — the contractor with the lowest quote might not be the least expensive in the long run. Many less-reputable contractors will intentionally underbid to win the business, only to later come back and claim that some aspects of the job are “extra.”

The Golden Rule Of Hiring Contractors

If I had to give one piece of advice on hiring contractors, it’s “never let the money get ahead of the work.”  This may sound simple, but it’s a critical strategy to avoid getting ripped off. There are some contractors that will walk if they see their payment is well ahead of the work, so it’s really critical to avoid this common mistake.

Avoid paying more than 25% of the job for the materials upfront. Instead, split the materials deposit so that half of the 25% is due at contract signing and the other half of the 25% is due when they show up with the materials on the first day. If the contractor does not have the financial capacity to do this, then you probably don’t want to hire this person anyway.

Try To Work Out The Issue By Playing The Good Cop

So what happens if you’ve done your best in picking a contractor, but things still don’t work out? I recommend trying to work out the situation on your own, before getting lawyers involved. Explain to the contractor how you see the situation, and that you want to work this out so everyone is happy – a win/win for all involved. If they step up, the problem is solved, but if not, you can also use the power of the internet to your advantage. You can explain that while you may not want to, you will escalate the issue if necessary, through reviews on Yelp and Angie’s List, and complaints filed with the Better Business Bureau, Chicago’s Business Affairs & Consumer Protection Department, and the Illinois Attorney General’s office. As a last resort, you can also mention filing a claim with the contractor’s insurance agency directly and even possible legal action. Hopefully, this will convince any reputable contractor that fixing the work is their best option.

Legal Remedies

If none of these things get results, legal action may be your last resort. If you decide to sue (or at least threaten to sue), two common approaches are:

  • Illinois Implied Warrant Workmanship
    • Note that this does not typically apply to new construction, as this Implied Warranty is almost always waived when the developer gives you their warranty with the new construction developer contract.
  • Illinois Consumer Fraud & Deceptive Business Practices Act

Illinois Implied Warrant Workmanship

Here in Illinois, construction work is covered by an Implied Warranty of Workmanship. This one-year warranty applies whether or not there is a specific warranty written into the contract. Here is a good overview of it:

This warranty allows you to sue for work that you can prove was done poorly. You cannot, however, recover attorney fees, which can be substantial. On the plus side, there is also a lower threshold of proof.  You do not need to prove that the contractor was misleading or fraudulent, just that the work was not done in a workmanlike fashion.

Illinois Consumer Fraud & Deceptive Business Practices Act

Threatening to sue under the Illinois Consumer Fraud & Deceptive Business Practices Act can be a more effective coercive threat to the contractor since you can also recover attorney fees. This can make a world of difference because even a cheap lawsuit might cost $15,000 in attorney fees, which could be more than the physical damage to the property. As an example, I recently represented a buyer in Ukrainian Village who had requested that the seller fix some plumbing issues uncovered during the inspection. The seller agreed, but after the purchase, the pipe burst, causing about $3,000 in damages. Although a plumber confirmed that the soldering work had been defective, the cost of a lawsuit would have exceeded the damage to the property.

Under the Act, if a contractor did the work in a way which would not really repair the problem but instead merely was a temporary fix or concealed the degree of the problem that could create liability. Misrepresentation of the work, whether intentional or unintentional, as well as merely staying silent instead of informing the client of important issues, could also be actionable.

If you get to the point of legal action, I would strongly suggest contacting a lawyer to explore your options. While I can provide a framework and some ideas as to your legal options, every situation is different and a good lawyer will be able to discuss your options given your circumstances.

An Ounce of Prevention...

Home repair and remodeling can be a treacherous minefield, filled with unexpected surprises, cost overruns and potential for fraud.  That said, it’s also a necessary part of home ownership. Again, the more work you do up-front to vet the people you hire, the better off you’ll be. And again, while price should be a consideration, I’ve seen many examples of the “cheapest” contractor turning out to cost the homeowner far more than the highest bid received.

If you do run into problems, however, you do have recourse. Among the key suggestions:

  • Direct communication with the contractor
  • Reviews (or even just threats of reviews) on Yelp and Angie’s List
  • Filing complaints with the Better Business Bureau, Illinois Attorney General and City of Chicago Business Affairs and Consumer Protection department
  • Contacting the contractor’s insurance company directly to file a claim.

If you’ve tried all of these avenues unsuccessfully, a good lawyer should be able to explain your options. While no one wants to sue, the courts exist for a reason and if you’re confident in your case, you may be able to get your legal fees covered by the contractor.  Whatever happens, being a homeowner can be rewarding, but it’s also hard work. If you have questions about the remodeling process or even just want to vent, be sure to Ask Nagel!

Greg Nagel

Greg Nagel is the Managing Broker/Owner of Ask Nagel Realty and a Top 1% producer of all Chicago brokers. He has been featured on two episodes of HGTV’s number one show, House Hunters. Check out the 200+ five-star reviews of Greg’s work from his clients on Zillow.