Warning Signs to Recognize Before You Hire a Contractor or Sign a Contract
Illinois Home Repair Contractor Red Flags
Most home repair disputes start with a warning sign the homeowner noticed and ignored. Recognizing these red flags, and knowing the Illinois law behind them, protects your home and your money.
Last updated: October 2026
The Illinois Attorney General receives more than 20,000 consumer complaints each year, and approximately 20 percent of them involve disputes between homeowners and home repair contractors. Most of those disputes follow a familiar pattern. A contractor pressures the homeowner to sign quickly, collects a large payment up front, skips the permit, and either performs poor work or never returns. In nearly every case, at least one of the warning signs on this page was visible before the contract was signed.
Illinois law gives homeowners real protection. The Home Repair and Remodeling Act, 815 ILCS 513, requires written contracts, a consumer rights pamphlet, and minimum insurance. The Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505, provides cancellation rights and a civil remedy for deceptive conduct. The Home Repair Fraud Act, 815 ILCS 515, makes the worst conduct a crime. Those protections work best before the money changes hands, which is why the red flags matter.
Emalfarb Law LLC represents homeowners and contractors in residential construction disputes throughout Illinois. This guide sets out the four red flags we see most often, the additional warning signs the Attorney General identifies, the paperwork problems that signal trouble, and the steps to take when you spot one. To confirm whether a contractor holds the license its trade requires, see our companion guide to Illinois contractor licensing.
What Are the Biggest Red Flags When Hiring a Contractor?
1. High-Pressure Sales Tactics
A contractor who insists that you sign today, offers a price that expires when the salesperson leaves, or talks quickly through the contract terms is trying to keep you from comparing bids and reading the document. The Attorney General warns homeowners to be cautious when a contractor comes to the door uninvited, claims that repairs are needed immediately for safety reasons, or pressures them to sign papers on the spot. Fear is a sales tool. A furnace that is supposedly about to leak carbon monoxide, a roof that will supposedly collapse in the next storm, or a code violation that supposedly must be fixed this week should be confirmed by an independent professional before anyone is paid.
Illinois law blunts these tactics. When a home repair sale is made and signed at the homeowner's residence, the homeowner may cancel within three business days under the Consumer Fraud Act, 815 ILCS 505/2B, and the Federal Trade Commission's Cooling-Off Rule, 16 C.F.R. Part 429. The Attorney General's guidance advises that homeowners age 65 or older have up to 15 business days to cancel a contract signed with an uninvited solicitor in the home. The contractor cannot take these rights away by starting work, ordering materials, or selling the contract to a lender. A salesperson who discourages you from reading the contract, or who will not leave a copy, is telling you how the rest of the job will go.
2. Cash Deposits and Large Payments Up Front
A demand for cash, a request to pay the entire job before work begins, or an offer to drive you to the bank to withdraw funds are among the clearest warning signs the Attorney General identifies. Cash leaves no bank record and no card dispute right. A large deposit shifts all of the risk of nonperformance to you, and a contractor who has already been paid in full has little reason to return to finish punch list items or correct defects. The Home Repair and Remodeling Act does not cap deposits, so protection comes from the payment terms you negotiate.
Keep the down payment as small as you can negotiate and tie each later payment to a completed stage of the work. The Attorney General suggests that homeowners and contractors may deposit contract funds with an independent escrow agent, such as a bank or title company, so that payments are released only as the work progresses. Pay by check or card and obtain a receipt for every payment.
Payment schedules also matter because of mechanic liens. A subcontractor or supplier who is not paid by your contractor may record a lien against your home even if you paid the contractor in full. Before each payment, request the contractor's sworn statement of subcontractors and suppliers under 770 ILCS 60/5 and collect lien waivers for the work being paid. Subcontractors on owner-occupied homes must also serve the 60-day residential notice, which tells you who else is owed money on your project.
3. No Insurance, or No Proof of Insurance
Section 25 of the Home Repair and Remodeling Act requires every person engaged in the business of home repair and remodeling to carry liability insurance of at least $100,000 per person and $300,000 per occurrence for bodily injury, $50,000 per occurrence for property damage, and $10,000 per occurrence for work that does not conform to state, county, or municipal codes. 815 ILCS 513/25. Only a contractor with a documented net worth of at least $1,000,000 is exempt. Roofing contractors must also carry property damage insurance and workers' compensation coverage to hold a state license. 225 ILCS 335/3.
A contractor who cannot produce a certificate of insurance, offers a photocopy with expired dates, or says that insurance is unnecessary for a small job should not be working on your home. If a worker falls from your roof or the crew damages your house or a neighbor's, an uninsured contractor has no carrier to pay the claim, and the injured party will look for another source of recovery. Ask for a current certificate before work begins, confirm that the policy period covers your project, and if anything looks irregular, call the issuing agent directly to confirm that the policy is in force.
4. "A Permit Is Not Required"
Illinois does not issue residential building permits at the state level. Each municipality, and the county for unincorporated property, decides which work requires a permit and inspection. Roofing, electrical, plumbing, structural, and mechanical work generally does, and many towns also require contractor registration before a permit will issue. A contractor who tells you that a permit is not required, or who asks you to pull the permit in your own name, may be avoiding inspection, avoiding the cost of meeting code, or working in a town where it is not registered. When the homeowner pulls the permit, the homeowner becomes the responsible party for code compliance.
The consequences of unpermitted work rarely appear right away. An insurer may question a claim involving unpermitted work, a municipality may require that finished walls be opened for inspection, and the issue will surface when you sell. In our residential real estate closing practice, buyers' inspectors and attorneys routinely ask whether visible improvements were permitted, and an unpermitted addition or basement can delay a closing or reduce the price.
Call your building department before work begins. Ask whether the project requires a permit, whether the contractor is registered with the municipality, and who must sign the permit application. Then make permit issuance a condition of the first payment in your contract.
Other Warning Signs the Illinois Attorney General Identifies
The Attorney General's guide, Home Repair and Construction: What You Should Know, draws on the complaints the office receives and lists the techniques dishonest contractors use to gain a homeowner's confidence. Beware of a contractor who:
Contacts you or comes to your home uninvited, often right after a storm
Claims to have extra materials left over from a job in your neighborhood and offers a discount
Tells you that repairs must be made immediately or your safety is at risk
Quotes a price far out of line with other written estimates
Offers to drive you to your bank to withdraw funds
Can be reached only by leaving messages with an answering service
Drives an unmarked vehicle or has out-of-state license plates
Claims to represent your insurance company
Operates out of a post office box or private mailbox instead of a local business address
Will not put oral promises in the written contract
Severe weather brings a predictable wave of these contractors. After a hail or wind storm, crews from out of state canvass neighborhoods offering free roof inspections and promising that the homeowner's insurance will cover the full cost. Some ask the homeowner to sign a document that turns out to be a contract or an assignment of insurance benefits. Every roofing contractor working in Illinois must hold a license from the Illinois Department of Financial and Professional Regulation, and the license number must appear on its contracts and bids. A storm crew that cannot show you an Illinois roofing license should not be on your roof.
Insurance-funded work carries its own cancellation right. If your insurer notifies you that all or part of the claim is not a covered loss, the Attorney General's guidance advises that you may cancel the contract by written notice within the time the law allows, and the contractor must return payments, less the reasonable value of any emergency work you acknowledged in writing was necessary to prevent further damage. Do not let a contractor negotiate directly with your insurer on your behalf until you understand what you have signed.
Paperwork Red Flags: What Is Missing From the Contract?
The contract itself often reveals whether a contractor knows and follows Illinois law. Each of the following is a warning sign on its own. Two or more together should end the conversation.
No written contract on a job over $1,000
Section 15 of the Home Repair and Remodeling Act requires a signed written contract or work order before work begins on any job over $1,000, stating the total cost, the parts and materials, any estimate charge, and the contractor's business name and address. 815 ILCS 513/15.
No consumer rights pamphlet
Every covered contractor must give you the Attorney General's Home Repair: Know Your Consumer Rights pamphlet. On contracts over $1,000, both parties sign an acknowledgment form before the contract is signed. 815 ILCS 513/20.
Arbitration clause with no accept or reject line
An arbitration clause or jury waiver is void unless you were told about it and signed accept or reject beside it. 815 ILCS 513/15.1. A contractor that buries one in fine print is either unaware of the law or hoping you are.
Blank spaces, missing dates, or a lump-sum price
The Attorney General advises homeowners never to sign a contract with blank spaces. A single lump-sum line with no materials, no start or completion date, and no payment schedule gives you nothing to enforce.
No sworn statement or lien waivers
The Mechanics Lien Act entitles you to a sworn statement listing every subcontractor and supplier and the amount due to each before you make a payment. 770 ILCS 60/5. A contractor that will not provide one, or will not deliver lien waivers with each draw, leaves you exposed to paying twice.
A contract that satisfies the statute is only the minimum. A good residential contract also defines the scope of work with specifications, states start and completion dates, sets a payment schedule tied to progress, explains how change orders will be priced and approved, and includes written warranties. The Attorney General advises homeowners to make sure every oral promise appears in the written contract. If a company will not put its promises in writing, hire one that will.
Is Home Repair Fraud a Crime in Illinois?
Yes. The Home Repair Fraud Act, 815 ILCS 515, makes it a criminal offense to commit fraud in connection with home repair, including knowingly misrepresenting the need for repairs and entering into a home repair agreement and accepting payment with no intention of performing the work. Section 5 of that Act establishes the separate offense of aggravated home repair fraud when the victim is 60 years of age or older or a person with a disability, with enhanced penalties. 815 ILCS 515/5. If a contractor has taken your money and you believe it never intended to do the work, report it to your local police department.
Criminal prosecution punishes the contractor but does not always return your money. The civil remedy is the Consumer Fraud and Deceptive Business Practices Act. A homeowner who suffers actual damage from a deceptive act or practice may sue under Section 10a for actual damages, and the court may award attorney fees and costs. 815 ILCS 505/10a. Section 2Z of that Act also makes a knowing violation of the Home Repair and Remodeling Act an unlawful practice. 815 ILCS 505/2Z. Consumer Fraud Act claims must generally be filed within three years after the cause of action accrues. 815 ILCS 505/10a(e).
Not every bad experience is fraud. A contractor who performs defective work, falls behind schedule, or disputes the price of a change order has likely breached the contract, and the remedy is a contract claim rather than a criminal complaint. Our guide to the Home Repair and Remodeling Act explains what Illinois courts have held about technical violations, including why a missing pamphlet alone rarely excuses payment for completed, satisfactory work.
What to Do When You Spot a Red Flag
The right response depends on how far the project has gone. Before you sign, walking away costs nothing. After you sign or pay, the order of your next steps matters.
- 1
Stop before you sign or pay. A legitimate contractor will still be available tomorrow.
- 2
If you already signed at home, send a written cancellation by certified mail within three business days.
- 3
Verify the contractor's license for licensed trades and its registration with your municipality.
- 4
Request a certificate of insurance and confirm the policy is current with the issuing agent.
- 5
Call your building department to learn whether the work requires a permit and who must pull it.
- 6
Check complaint records with the Illinois Attorney General and the Better Business Bureau.
- 7
Keep every document, text message, receipt, and photograph in one place.
- 8
Talk to an attorney before you withhold payment, sign a release, or pay a second contractor.
If the project is already in trouble, try first to resolve it with the contractor, and follow every phone call with a letter summarizing the conversation, sent by certified mail with a return receipt. The Attorney General's office accepts consumer complaints and offers cooperative mediation at any stage. If mediation fails, an attorney can evaluate whether you have a contract claim, a Consumer Fraud Act claim, or both, and whether any subcontractor has recorded or can still record a lien against your home.
Do not stop paying for completed, acceptable work solely because the contractor made a paperwork mistake. In K. Miller Construction Co. v. McGinnis, 238 Ill. 2d 284 (2010), the Illinois Supreme Court held that a remodeler who failed to obtain a written contract could still recover for its work. A homeowner who withholds payment without a sound basis may face a mechanic lien and a lawsuit the contractor is likely to win.
For Contractors: Do Not Look Like a Red Flag
Legitimate remodelers lose jobs to these warning signs too. A homeowner who has read the Attorney General's guidance will hesitate when a contractor asks for a large deposit, cannot produce an insurance certificate on request, or suggests skipping the permit. The same practices that reassure homeowners also protect a contractor's right to be paid.
Use a written contract that complies with Sections 15, 15.1, and 20 of the Home Repair and Remodeling Act on every job over $1,000.
Deliver the consumer rights pamphlet and keep the signed acknowledgment form in the project file.
Keep a current certificate of insurance ready to send with every proposal.
Pull permits in your own company name and register with each municipality where you work.
Set a reasonable deposit and a payment schedule tied to completed stages.
Provide sworn statements and lien waivers with each payment request.
A contractor who follows these steps rarely faces an Act-based defense when a homeowner stops paying, and keeps its Illinois mechanic lien rights and collection remedies intact. We draft compliant residential contract forms and represent contractors in contractor collections when a homeowner will not pay.