For most homeowners, the hardest part of renovating a home is finding a reliable general contractor to carry out the project. With the lack of transparency in the industry it is hard for homeowners to know which contractors are qualified or what they need to verify before moving forward.
This guide will help you understand licensing requirements for both general contractors and trade professionals in Illinois and what questions you should ask contractors before signing a contract.
What are Illinois’ licensing requirements for general contractors?
Unlike many other states, Illinois does not require general contractors to be licensed. However, many municipalities and cities within Illinois have their own requirements for licensing and insurance.
In Chicago, all general contractors are required by law to be licensed based on the cost of the project (refer below).
There are five classes of license, depending on the cost of work performed:
- Class A = Unlimited contract amount
- Class B = $10,000,000
- Class C = $5,000,000
- Class D = $2,000,000
- Class E = $500,000
For a general contractor to be licensed, they need to provide proof of financial stability, business insurance for general liability, and information about their business and its structure.
How to verify the general contractor’s license
If you live outside of Chicago, check official municipal websites to verify if the general contractor is licensed in your specific municipality. You can verify any professional license in Illinois through The Illinois Department of Financial and Professional Regulation. Many cities also provide a list of licensed companies and the type of licensing per municipality, similar to this site from the City of Chicago.
Other municipalities in Illinois that require general contractor licenses include:
EvanstonWheatonMount ProspectSkokieWaukeganJolietOak LawnTinley ParkElginOak ParkSchaumburgBolingbrookPark RidgePalatineAuroraDes PlainesOrland ParkArlington HeightsBerwynNapervilleMorton Grove
General contractor vs. specialized contractor
Depending on the type of work your renovation project requires, you may need a specialized contractor such as a roofer, electrician, carpenter, or masonry contractor.
In Illinois, roofing and plumbing licenses are regulated by the Illinois Department of Financial and Professional Regulations and the Illinois Department of Public Health, respectively. Other specialized contractors, such as electricians, mechanics, builders, landscapers, etc., are issued licenses at the municipal level.
How can I vet a general contractor when they don’t have/require a license?
In absence of a license or specific designation, there are still proven ways you can find a competent and reliable general contractor before working with them:
- Check that they run a legally registered business. You can search for any registered US business by the company’s legal operating name on the National Corporation Directory website.
- Check that they have a valid commercial general liability insurance certificate with the minimum coverage the municipality requires. Ensure that the policy is active and hasn't expired.
- Request to visit one of their active projects. General contractors are proud of their work and often invite potential clients to active project sites. A site visit is a fantastic opportunity to see their work firsthand and ask questions.
- Review their past project work and ask for references. Many contractors have active social media profiles on Facebook and Instagram with project photos. You can also ask the contractor for references from past clients.
- Ensure you receive a detailed quote with a clear scope of work. Contractors will require a site visit to give you an accurate estimate with a breakdown of different scope categories (i.e., demolition, electrical, plumbing, structural wood, windows, doors, etc.).
- Sign a contract before starting any construction work. Every contract should include a final price breakdown, a construction schedule, a payment schedule, and general terms and conditions.
What are common red flags when hiring a general contractor?
Watch out for the following behaviors, which should raise flags while you vet general contractors:
- Refuses to share basic information about their business (e.g., physical address, business registration, insurance certificate)
- Provides a cost estimate without visiting your property
- Provides only a final figure as a cost estimate without any further detail or breakdown
- Provides a cost estimate that is too good to be true or significantly lower than other estimates you received
- Recommends that you start construction without a building permit when a permit is required.
- Requests to start construction without a proper contract in place
- Requires that you pay a large deposit (more than 20 percent) before commencing work. In most cases, professional contractors request a 10-20 percent deposit upon signing a contract to help cover the cost of materials.
- Places you under undue pressure to start the project. Professional contractors are always busy and would never pressure clients to start before they are ready.
What are my rights as a homeowner in Chicago?
Illinois’s Home Repair and Remodeling Act (HRRA) protects homeowners when they embark on home repairs and renovations. The act applies to a wide range of renovation projects, including kitchen remodels, minor repairs, plumbing, and large-scale projects.
The HRRA requires contractors to provide a written contract for all residential repair work over $1,000 and to provide a “Home Repair: Know Your Consumer Rights” pamphlet prior to the execution of any home repair and remodeling work.
The contract should include the following information:
- A description of the work they will perform
- The total cost of the project
- How and when the contractor should be paid
- Start and completion dates for the work
- A clause that allows the customer to terminate the contract within three business days of signing
- The contractor’s business name and address (This should be a physical address. If the business uses a P.O. Box, the contractor should also provide their home address)
Contractors also need to maintain public damage and general liability insurance for the duration of the project.
