Legal Question in Real Estate Law in California

Unless the contract provides the contractor with promotional rights in the work, yes, that is illegal.

I'd start out by saying that it may depend on what you have in mind when you ask if it's legal. Arson and selling alcohol to minors and parking at an expired meter are illegal because there is a statute on the books declaring each to be illegal. The three crimes mentioned illustrate varying degrees of illegality--a felony, a misdemeanor and an infraction. It is "illegal" in a different sense to pay your rent a week late, because you are breaching a contract, although in a relatively minor way, and perhaps it is illegal not to shovel your sidewalk after a snowfall, because someone might trip and fall, and the rules of negligence liability will say you failed to perform a duty and must pay damages.

With respect to contractors taking pictures of their completed work to keep a portfolio for their own use, I'd say first of all that this is a widespread practice. Furthermore, I do not believe it is "illegal" in any of the senses suggested above. I'd like to hear Mr. McCormick's theory of supposed illegality.

I'm almost certain it is perfectly legal in all senses to take pictures of the outside of other people's homes. Also, I'm pretty sure that if someone took pictures of a homeowner's newly-redecorated interior and sold them to Better Homes and Gardens for a lot of money, the homeowner would have a solid suit against the photographer and the publisher for recovery of some or all of the profits, and perhaps for additional money damages for invasion of privacy.

In you case, however, I don't think your contractor has done anything that befits the term "illegal" in any sense, nor do I think you have a viable cause of action for damages unless you have suffered harm that you can spell out in dollar terms to a judge or jury.