- Home
- /
- Construction
- /
- Contracting in Tennessee – 5 Simple Tips
February 20, 2017
Contracting in Tennessee – 5 Simple Tips
It never ceases to amaze how contractors, particularly those based out of state, run afoul of Tennessee laws. As 2017 progresses, here are few laws that should be kept in mind.
- Are You Licensed? – A Contractor’s license is required prior to contracting. In Tennessee, “contracting” includes bidding, offering to engage, or negotiating a price for projects of $25,000 or more (includes all labor, materials, and equipment). Electrical, Mechanical, Plumbing, HVAC, and Roofing subcontractors must be licensed when contracting directly with any contractor (not to the owner) to perform projects when the total cost of that portion on the project is $25,000 or more. Masonry contractors must be licensed when that portion of the project is $100,000 or more. Beware that an unlicensed contractor is only entitled to recover “actual documented expenses that can be shown by clear and convincing proof.” T.C.A. § 62-6-103(b).
- Consumer Protection Act Claims – The hvac companies Chicago says that the violation of the Act is also deemed an unfair or deceptive act under the Tennessee Consumer Protection Act, thus subjecting the unlicensed contractor to potential civil remedies available under the TCPA, including claims for attorneys’ fees and treble damages.
- Retainage Capped at 5% – Tennessee law caps retainage on both public and private projects at 5% of the amount of the contract. T.C.A. § 66-34-103. The cap on the allowable amount of retainage cannot be waived by contract. On projects of over $500,000, retainage must be deposited in an interest bearing account with a third-party.
- No Foreign Venue of Disputes Involving Tennessee Projects – A provision in any contract, subcontract or purchase order for the improvement of real property located in Tennessee is void and against public policy if it makes the contract, subcontract or purchase order subject to the substantive laws of another state or mandates that the exclusive forum for any litigation, arbitration or other dispute resolution process is located in another state. T.C.A. § 66-11-208.
- No Suit for Defects Without Prior Written Notice – Tennessee has enacted a “Notice and Right to Cure” statute in relation to commercial projects (anything other than a single family home). T.C.A. § 66-34-103. Under the law, no contractor, subcontractor, supplier or designer can be sued for alleged construction defects unless they are first served a written notice of the claim. The statute imposes a time line for the giving of notice, an opportunity to inspect the alleged defects, and time line for conducting repairs or disputing the claim.
Photo: Sean MacEntee
This entry was posted in Construction, Contractors, Legal Issues, Subcontractors, Tennessee Construction and tagged Contractor License, General Contractors, retainage, Subcontractors. Bookmark the permalink.Subscribe to Blog via Email
Recent Posts
Blog Contributors
David Draper
(7)
Jason Pannu
(12)
Paul Whitt
(14)
Stephen Barton
(1)
Wally Irvin
(23)
Topics
Archives
- June 2020
- April 2020
- March 2019
- July 2018
- June 2018
- May 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- September 2017
- August 2017
- July 2017
- April 2017
- March 2017
- February 2017
- January 2017
- September 2016
- June 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
© Lewis, Thomason, King, Krieg & Waldrop, P.C. 2017
Recent Comments