Understanding Construction Disputes in Chicago

How Long Do I Have to File a Construction Dispute Claim in Illinois?

The answer depends on the type of claim. For construction defect claims under 735 ILCS 5/13-214, you have four years from the date you knew or should have known about the defect. There is also a 10-year statute of repose, which means no claim can be filed more than 10 years after substantial completion of the project, regardless of when the defect was discovered. If the defect was fraudulently concealed, you may have five years from the date of discovery instead of four.

For breach of a written construction contract, the statute of limitations is 10 years. For oral contracts, it is five years. Mechanics lien claims have their own, much shorter deadlines under the Illinois Mechanics Lien Act, with contractors generally required to file within four months of their last date of work for the lien to be effective against subsequent purchasers.

These deadlines run whether or not you take action, so identifying the applicable timeline early is critical to preserving your claim.

Can I Withhold Payment if the Contractor's Work Is Defective or Incomplete?

Generally, yes, but only for the reasonable value of the defective or incomplete portion. You cannot refuse to pay for the entire project because part of the work is unsatisfactory. Under the Illinois Contractor Prompt Payment Act (815 ILCS 603), an owner who receives a payment application must either approve it or provide a written statement identifying the amount withheld and the reason within 25 days. Failure to respond within that window means the payment application is deemed approved.

If you believe the work is defective, document the issues thoroughly, put your objections in writing, and pay the undisputed portion to avoid unnecessary exposure.

What Should I Do if My Contractor Abandons the Project?

Start by documenting everything: photograph the current state of the work, gather all contracts, invoices, payment records, and communications. Then send a written notice (email followed by certified mail) giving the contractor a specific, reasonable deadline to return and complete the work. Be direct about the consequences if they do not respond.

If the contractor does not return, get detailed estimates from at least one or two replacement contractors. The cost to complete the project through a replacement contractor, minus whatever you still owe on the original contract, forms the basis of your breach of contract damages. If you have already overpaid relative to the work completed, you have a claim for that difference as well.

Do not destroy or discard the contractor's unfinished work without documenting it first. That evidence is important if the dispute ends up in court or arbitration.

Can a Contractor Recover Payment for Extra Work Without a Signed Change Order?

Sometimes, yes. Most construction contracts require written, signed change orders before extra work is performed. But Illinois courts have recognized that property owners can waive that requirement through their conduct, such as verbally directing extra work and accepting the results without objection.

To recover for extras in Illinois, the contractor must prove five things by clear and convincing evidence: the work was outside the original contract scope, the owner or upstream party requested it, the owner agreed to pay for it (by words or conduct), the contractor did not volunteer to do the work, and the extras were not caused by the contractor's own default.

That said, relying on verbal authorization is risky. Courts examine each situation individually, and the burden of proof is high. Contractors should always push for written change orders, even when the project is moving fast and the relationship is good.

What Is the Illinois Home Repair and Remodeling Act?

The Illinois Home Repair and Remodeling Act (815 ILCS 513) governs residential construction contracts over $1,000 on single-family homes and multi-family buildings with six or fewer units. The HRRA requires contractors to provide a written contract before work begins, deliver a "Home Repair: Know Your Consumer Rights" brochure published by the Attorney General's office, maintain minimum levels of liability and property damage insurance, and disclose any arbitration or jury waiver clauses before the contract is signed.

Do I Need to Send a Demand Letter Before Filing a Construction Lawsuit?

Illinois does not generally require a demand letter before filing a construction lawsuit. A well-drafted demand letter can be strategically valuable by putting the dispute in writing, establishing a timeline, and showing the other side you are serious about enforcement. It also gives them a clear opportunity to resolve the matter before the cost and disruption of litigation.

For contractors pursuing payment, referencing your mechanics lien rights in a demand letter can significantly increase the pressure to pay. For property owners dealing with defective work, a demand letter that documents the deficiencies and sets a deadline for corrective action creates a paper trail that strengthens your position if the case goes to court.

What Is the Difference Between Extra Work and Additional Work?

This distinction matters more than most people realize. Under Illinois law, "extra work" is work that falls outside the original scope of the contract. If the owner requests it and agrees to pay for it, the contractor is entitled to additional compensation. "Additional work," on the other hand, is work that falls within the original contract scope but turns out to be more difficult, time-consuming, or costly than anticipated.

The practical difference is significant. Extra work supports a claim for more money. Additional work generally does not, though it may justify an extension of time to complete the project. A contractor is not typically entitled to additional compensation simply because a task turned out to be harder than expected due to weather, site conditions, or other complications, unless the difficulty was caused by a defect in the owner's plans or specifications.

Change order disputes frequently turn on whether the work in question was truly outside the contract or simply more involved than originally estimated. The contract language, project communications, and the parties' conduct all factor into how a court resolves that question.

Can a Subcontractor File a Lien on My Property if I Already Paid the General Contractor?

Yes. Under the Illinois Mechanics Lien Act, subcontractors and material suppliers have lien rights that are independent of the general contractor's payment status. Even if an owner has paid the general contractor in full, unpaid subcontractors or suppliers may still assert a lien against the property to recover amounts owed to them.

Owners can reduce this risk by using sworn statements and lien waivers as part of the payment process. Before issuing progress payments, an owner may require the general contractor to provide a sworn statement identifying all subcontractors and suppliers on the project and the amounts due to each. Partial lien waivers should be collected with each payment, and final lien waivers should be obtained at project completion.

While these measures do not eliminate lien exposure entirely, they significantly reduce the risk of double payment. Because mechanics lien rights are governed by strict deadlines, any notice of a subcontractor lien claim should be addressed promptly and with legal guidance.

Can I Recover Attorney's Fees in a Construction Dispute?

Illinois follows the "American Rule," meaning each party generally pays its own attorney's fees unless a contract or statute provides otherwise. In construction disputes, fee recovery most often arises under specific laws, including the Illinois Mechanics Lien Act, the Home Repair and Remodeling Act, and the Illinois Consumer Fraud and Deceptive Business Practices Act, as well as through attorney's fees provisions in construction contracts.

Because fee-shifting can apply to either side depending on how a dispute is resolved, these provisions should be evaluated carefully before being included in a contract or relied upon in litigation.

What Happens if There Is No Written Construction Contract?

Work can still proceed, and claims can still be brought. Oral construction contracts are enforceable in Illinois, though the statute of limitations for an oral contract is five years, compared to ten years for a written agreement. Without a written contract, disputes over scope, price, timeline, and responsibility become much harder to prove. The terms will depend on what each side can demonstrate through emails, text messages, invoices, photos, and the parties' conduct.

Contractors can also pursue claims under a theory of quantum meruit, which allows recovery for the reasonable value of work performed even without a formal contract, as long as the property owner accepted the benefit of the work.