I spent a good amount of time one week working with a client to cancel his construction contract after learning that the contractor was not properly licensed to build his new house. What started out as an exciting time in this client’s life turned out to be a big mess. I was eventually able to work out a solution with the unlicensed contractor, but not before he had hired legal counsel of his own.
In Tennessee, residential and commercial construction contractors are regulated by the Tennessee Board for Licensing Contractors. Per the Board,
A contractor’s license is required prior to contracting (bidding or negotiating a price) whenever the total cost of the project is $25,000 or more.
For residential construction, licensed contractors may contract to build houses so long as the total cost of the project does not exceed the monetary limit established by the Board. A contractor may apply to have his limit increased after submitting documents showing financial stability.
Frequently however, home builders enter into contracts with customers for projects that exceed their monetary limits. Many problems can come into play when this happens. Contractors jeopardize their licenses and expose themselves to fines from the Board. Contractors open themselves up to not being able to collect under the terms of the construction contract, even if everything goes well. Customers run the risk of the project being shut down and having to incur additional expenses. Customers may even have to hire a replacement contractor.
Before Your Enter Into a Construction Contract. . .
Check to see if your contractor is properly licensed! Construction litigation can be lengthy, complex, and expensive. Many problems can be avoided if customers do a little quick research to confirm that the contractor they want to use is fully and properly licensed. You can do that by clicking here.
If you need a construction or contract lawyer, call me at (901) 372-5003 or email me here.
By: Chris Patterson
8001 Centerview Parkway, Suite 103
Memphis, Tennessee 38018
(901) 372-5003 Office