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Board for Licensing Contractors

Consumer Resources

 

WARNING! Beware of contractors making door-to-door or telephone solicitations offering to make repairs to roofs and other storm damage to your home. Never sign over the insurance check; do not pay with cash,;and do not pay the total charges before the work is complete. See Consumer Tips or contact the Board's complaint section to check on or to report a contractor at: 1-800-544-7693 or by email: Contractors.Home-Improvement@TN.Gov


DisasteR RESOURCE

*Never pay up front for the total work to be completed; and do not turn over an insurance check to the contractor; do not pay with cash* (Home Improvement law limits down payments to 1/3 of the total contract)

 

GENERAL INFORMATION


CHECK OUT BEFORE HIRING!

 

Before hiring anyone to perform construction or remodeling, be sure to check them out before hiring. This includes checking to see if they are licensed and insured; knowing anyone else who has used their services; making sure they obtain a permit for inspections; and find out if they have a complaint history. These are just a few tips so please review all the resources to help in making your decision, as in our our Brochure.

 

Tips to Hiring a Contractor (Summary)

  • Hire only licensed contractors - check at: http://verify.tn.gov/
    • See "Search Tips" on looking up licensees to ensure they have not forged the certificate
    • Check with local government for codes and business licenses
  • Check references and complaint/discipline history (Reg Boards, BBB, etc.)
  • Get a written contract (Contract Information)
  • Make sure the contractor obtains a permit for code inspections (Code Information)
  • Ask for proof of insurance; workers' comp is required if they have one (1) employee (WC Verification)
  • Never pay cash; and do not pay the total amount before the work is complete or turn over your insurance check! (consider paying with credit cards with special protection)
  • If a contractor takes your money without performing the work, this may be considered a felony (theft) violation, and see the steps in the law to prosecute through local district attorney's office.
  • It is unlawful for an unlicensed contractor to file a lien

Note - If your home was built before 1978, please check on important Lead Based Paint procedures.

 

For those who have experienced problems or want to report unlicensed activity, you may skip this section and go directly to the "Complaint Filing Process" for resources to report a complaint and review the steps to the complaint process. Unfortunately, the complaint process does not take the place of civil action and you may need to hire an attorney on cases where monetary judgements or consumer protection law damages are an issue. The Board's jurisdiction is limited to licensing law violations, however, we encourage consumers who have been wronged or received a judgment, to report this to us, as well as the Better Business Bureau (BBB). This offers protection to the public from unscrupulous activity. You are welcome to contact our Complaint Section Coordinator at 1-800-544-7693 or send an email (see "Staff Contacts").

Complaint and disciplinary action history

 

Before hiring anyone, it is important to check their complaint history. The Board only has jurisdiction to discipline for proven license law violations under T.C.A. 62-6-118. Therefore, you may contact the Board office to check the history of a contractor. "OPEN" compliant cases (those still under investigation) are not listed on the website, as well as those with dismissed complaints.. Only the "CLOSED" cases with disciplinary action are listed on the public website and you would need to contact our office for those cases reported by consumers, which may have not been within the Board's jurisdiction (or not enough evidence to proceed for a formal hearing). However, disciplinary action is listed both by the month the action was reported, and includes all Divisions of the Regulatory Boards; and also in the "Archives". In addition, the Board will post an updated list of formal action within 30 days after the hearing and it includes revoked, suspended and unlicensed civil penalties against contractors who were found guilty. The Division of Consumer Affairs also has a buyer beware list of "Problem Contractors". The following are links to check disciplinary action:

 

Check Disciplinary Action History

The Department compiles a list of complaints with disciplinary action for all the the Regulatory Boards in their monthy and archived activity reports. In addition, the Board has provided a list showing actions from formal hearings (overseen by an Administrative Law Judge) with revoked and license supensions. Therefore, various lists have been compiled below for your convenience, as follows:

 

Revoked/Suspended Licenses (pdf)

This is a ist of "formal" action taken by the Board after the case has been closed. Decisions by the Board on open complaint cases cannot be listed until after the Board conducts a formal hearing pursuant the Uniform Administrative Procedures. This information is also included on the "Disciplinary Actions" on the website.

 

Problem Contractor's List (CHAMP Listing)

List of contractors (similar to "Buyer Beware" list) who have failed to respond in good faith to consumer complaints during the mediation process. The CHAMP program with the Consumer Affairs Divison may also forward to the Board to take disciplinary action for contractors failing to make repairs.

 

Disciplinary Actions

Disciplinary action taken at the regularly scheduled board meetings is listed within 30 days after the case is closed. Note: Disciplinary action is not published until the case has been closed. Refer to "Disciplinary Reports" for all actions of closed cases.

Note: Consumers may also check with our office to check a contractor for complaints with the "Complaint Section"; we will not have specific details of "open" cases while the investigation is in process, however, you may check their complaint history on open and dismissed cases with no disciple or letters of warnings.

 

Open Complaints or No Discipline

Not all cases result in disciplinary action. Depending on the complaint, many may receive a letter of warning or dismissed due to lack of jurisdiction. Cases that are still open have limited public information available. You may contact our Complaint Section Coordinator at 1-800-544-7693; or the direct line is (615) 532-3996; or by email at: Complaint Section to check the complaint history.

 

Better Business Bureau (BBB)

The Better Business Bureau (BBB) serves as a resource to check and also report a complaint. We encourage consumers to report to them, as well as to our Board. The BBB issues many public notifications to warn others of scams. (See alerts below.)

 

Licensed, Insured and Bonded - Information

While many contractors may be licensed, typically more than one license is required to perform work. Due to printing technology, always check to ensure the license certificate has not been forged with a different expiration date or name. Look for licenses by both the state and local governments (state contractor's license; county and city business license for taxes; county and city codes license for permit, etc.) As part of the licensing process, insurance required may not be helpful to the consumer. For example, depending on the type of coverage, general liability may only cover third party injuries. You may want to contact your insurance agent for supplemental coverage unless the contractor have provided proof of their coverage. In addition, the contractor working on your project may not have covered themselves with workers' compensation insurance, especially if they can obtain an exemption. Therefore, you may need to obtain coverage for them with your insurance company. Lastly, unless a bond is issued for your project at the local level (as part of the permit), a bond may not have been obtained or even required. The Home Improvement licensees require a $10,000 proof of financial responsibility and this may be in the form of a surety bond or they may obtain an Irrevocable Letter of Credit; property bond; or even a cash bond.

 

 

BEWARE

Beware of unscrupulus contractors making door-to-door solicitations offering to make repairs to roofs and other storm damage to your home, especially after a storm disaster. If you receive telephone offers and on the "Do Not Call" registry, you should report them to the "Tennessee Regulatory Authority. Never sign over the insurance check; do not pay with cash,;and do not pay the total charges before the work is complete. See Consumer Tips or contact the Board's complaint section to check on or to report a contractor at: 1-800-544-7693 or by email: Contractors.Home-Improvement@TN.Gov

 

 

SUMMARY

 

The Board for Licensing Contractors regulates licensing at various levels and before hiring anyone to perform work, check to see if they need or have all the proper licenses. Be sure to review the consumer tips below before hiring a contractor to have work performed. If you experience problems with your contractor, you may report a complaint to our Board.

 

Note: No one may use the license of another contractor (including relatives) and all contracts must be in the exact name as licensed.

 

When is a License Required?

The Board oversees five (5) of the license programs of the Regulatory Boards Division which is part of the Department of Commerce and Insurance. License requirements depends on the dollar amount of the project, as well as the county it is located. The following is a summary of when a license is required:

 

  1. Contractor - A "Contractor's" license is required if the total project is $25,000 or more
    • A contractor's license differs from other licenses; it has a classification and monetary limit assigned.
    • This law also defines "prime" (general) and "subcontractors".
    • A license as a contractor is needed prior to them bidding, contracting, or making an offer, when:
    • Project is $25,000 or more (contracting directly with the owner is considered a prime contractor); or acting as a construction manager by overseeing the project.
    • Construction Manager's are required to be licensed as a contractor .
  2. Subcontractors - A "Contractor's" license is required if their portion is $25,000 or more for:
    • Electrical, Mechanical, Plumbing and HVAC projects.
    • A subcontractor is one who contracts directly with the "prime" licensed contractor, and not the owner.
    • Masonry subcontractors are required to be licensed for projects $100,000 or more. I
    • Geothermal HVAC Well Drillers must have a license from Tennessee Department of Environment and Conservation
  3. Remodeling - A "Home Improvement" license is required for projects $3,000 to $24,999 in nine (9) counties (Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby), to perform remodeling, such as room additions construction, roofing, painting, paving driveways, fences, landscaping, swimming pools, etc., (see T.C.A. 62-6-501).
  4. Electrical - Check with your local government for projects less than $25,000 for their license, permit and inspection requirements. A state "Limited Licensed Electrician" may be required in some counties.
  5. Plumbing - Check with your local government for projects less than $25,000 for their license, permit and inspection requirements. A state "Limited Licensed Plumber" may be required in some counties.

For example, before hiring a Contractor to build your house, make sure:

 

1. Contractor has a current unexpired "Contractor's" license (may check at "License Search").

(Note: Always check the license pocket card to see what "type" of license and the "name" listed, to ensure a contractor does not attempt to use someone else's license. Most licenses look the same for a security guard, auctioneer, barber, fire sprinkler, etc., however, it will identify whether it is a "Contractor". In addition to a state contractor's license, they must obtain local government licenses, such as a business tax license and a building permit for inspections.

2. Contractor has the acceptable license limit and classification:

Classification: BC-A or BC or BC-B allows "Residential" building;

Monetary Limit: The amount approved for their license is based upon their financial statement and experience. The monetary limit must cover the total contract or bid price.

3. Proof of Valid Insurance - A licensed contractor must provide proof of General Liabilty insurance at the time of renewal as a condition of license; Workers' Compensation (WC) insurance is only required if they state disclose having a employee (the owner of the license may be exempt). Therefore, you must ensure their insurance coverage is active and not canceled. You may check with the Department of Labor's website at: WC Insurance Verification Search

 

4. Permits for Inspections - Always require the contractor to obtain permits for inspections and make sure it is posted at the job site. Some counties/municipalities require a performance bond as part of the permit, which offers further protection to the consumer. You may check at the Local Government Contacts for this information. Effective October 1, 2010, the Residential Building Code Program may be in place for your area!

 

5. Bond - A "contractor" is not required to obtain a bond at the state level in order to obtain a license (one is required for "Home Improvement" licensees). Bond requirements are typically required at the local level, in each municipality, to cover each individual project. The Board requires the contractor to supply a financial statement to ensure they have enough working capital and net worth to perform a project based on the size of their monetary limit assigned to the license. They may be required to supplement with a personal financial statement and a "Guaranty Agreement", should their business financial statement fail to meet the requirements. (Note: Financial statements are confidential by law, however, the "Guaranty Agreement" is considered public information).

 

6.Written Contract - Require the contractor to provide a written contract to avoid any miscommunications with the start or completion date, payment terms, change orders and warranty to provide documentation should problems arise. Another concern, ensure the contract covers installation costs allowances.

 

For example, before hiring a Home Improvement Contractor to build your house, make sure:

 

1. They have a current state license as a Home Improvement or Contractor (may check at "License Search"); local business license is required for tax purposes; local codes license is required for permits and inspections.

2. A home improvement contractor may perform work less than $25,000; a contractor with a BC-A or BC classification may perform remodeling and assigned a specific contract limit.

3. Unlike the Contractor's law, the Home Improvement law outlines many requirements for the contract format. Details of the contract law is under the Home Improvement statute, T.C.A. Title 62, Chapter 6 and Part 5:

  • Must be in writing; cannot demand full payment prior to completion; no more than 1/3 deposit; cannot act as a lender or cosign for a loan/mortgage; and must contract in the exact name as licensed.

4. A home improvement contractor must provide a $10,000 surety bond (or other financial responsibility) to the Board to be utilized by the consumer for problems encountered. In addition, proof of insurance (General Liability; and Workers' Compensation (WC) is required if they have one or more employees). Therefore, not all have WC insurance. You may check with the Department of Labor's website at: WC Insurance Verification Search

5. If the remodeling work requires plumbing or electrical work, they must be licensed locally, and/or have a state Limited Licensed Electrician (LLE) or state Limited Licensed Plumber (LLP), in order to obtain permits for inspections. HVAC requirements depend on the local government's requirement.

6. Always require the contractor to obtain permits for inspections and make sure it is posted on the job site.

7. A home improvement contractor may also be required to obtain a performance or permit bond, which are typically required at the local level in each municipality to cover individual projects.

8. Make sure you have their contact information. Most advertisements list only the telephone number (which may be their cell) and best to have their mailing address; if a post office box, you'll need their physical address.

 

 

Complaint Reporting

See the "Complaint Resources" for information on filing a complaint with the Board and an explaination of the process. This includes reporting the contractor to our Board for license violations, and also reporting the complaint to the Divison of Consumer Affairs to have their office attemp mediation.

 

Guidance

 

Asbestos Information (TDEC)

Attorney General's Office

Better Business Bureau (BBB)

Complaint Filing and Process

>>Mediation Offered by Consumer Affairs

>>Complaint - Board Process for Discipline to Contractors Reported

Consumer Affairs Division (TDCI)

Consumer Brochure - Guide to Selecting a Contractor [pdf]

Contract Tips Brochure (NASCLA) [pdf]

Codes Adoption (TDCI - Division of Fire Prevention)

Disciplinary Action Listing

FAQs - Frequently Asked Questions

Federal Government Assistance (FEMA) for Storm Victims

Federal Trade Commission

FindHelpTN

NEW! Fraud - Contractors Accepting Payment Without Performing Work

Homebuyer Education (THDA) - Mortgages, Foreclosures, & Tax - Information on Programs

HomeWORKS (Education Tools for Home Ownership - Habitat for Humanity)

Insurance and Bonds - Requirements for Licensing [pdf]

Insurance Division's Consumer Resources (TDCI)

License Search Tips [pdf]

Laws, Rules and Regulations

Law References for Consumers [pdf]

Legal Aid Programs (TALA)

NEW! Lead Based Paint Removal (TDEC)

NEW! Lien Prohibited

Mold - Clean-Up Resource (Department of Health)

One-Year Implied Warranty (T.C.A. § 47-2-314 / Other: T.C.A.§ 28-3-202)

Radon Testing for Homes

Residential Construction Performance Guidelines (NAHB - Adopted by the Contractors Board)

Tennessee "Do Not Call" Registry

Tennessee Emergency Management (TEMA)

Valuable Resources

Workers Compensation Insurance Verification (Labor & Workforce Development)

>>NEW! Workers' Comp Exemption Registration (Not all licensees have workers' comp!)

 

Consumer Related Legislation

>>Lien Protection from Unlicensed Contractors (see also TCA 62-6-128)

>>Theft and Fraud Prosecution (Public Chapter 1055)

>>State Residential Building Code Program (Eff. 10/1)

>>Lead Based Paint Removal - Important Requirements to Ensure Safety of Health!

 

 

Notice: Contractors taking money without performing work may be prosecuted by law enforcement as theft pursuant T.C.A. 39-14-105. Unlicensed contractors are prohibited by law from filing a lien aganist a residence, pursuant T.C.A. 66-11-150. Unlicensed contractors may only be paid for documented expenses and not the contract price, in the court pursuant T.C.A. 62-6-103.

 

FYI - Tennessee lawyers mobilize to provide free legal assistance to storm victims. Asking for attorneys to sign up and volunteer their services at: http://www.tba.org/volunteer

 

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