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Board for Licensing Contractors

HOME IMPROVEMENT LICENSING REQUIREMENTS

 

A Home Improvement license is required for residential remodeling projects from $3,000 to less than $25,000 (total cost or contract, including materials and labor), for the following counties: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby.

 

Note: The Home Improvement license application must be approved by the Board. See the "Public Meetings Calendar" for the dates. Please submit completed application by the 20th of the month prior to the Board meeting. The Board meets during the months of January, March, May, July, September and November.

 

NEW! See important law changes applying only to those roofers performing work to be covered by insurance - Public Chapter 821 (Effective July 1, 2012)

  • Roofing contractors being paid by insurance companies, must include specific consumer protection language in their contract: 1) Right to cancel within 3 days; 2) Ccontact information: Address, Telephone Number, License #, Email Address; and 3) Detailed Description of Repairs. See Public Chapter 821 for more information in the law.

NEW! Online Renewals

 

HOME IMPROVEMENT LICENSE REQUIREMENTS

 

A Home Improvement license is required for remodeling projects in several counties, when the cost is $3,000 to $24,999. Consumers prefer to hire licensed professionals, especially when it comes to home remodeling. If you want to be known as a state licensed, insured and bonded contractor, the Home Improvement license is a good start (always list license ID number in advertisements).

 

Counties who have adopted the Home Improvement law pursuant T.C.A. 62-6-516 (formerly 62-37-126), are currently: Bradley, Davidson, Haywood, Hamilton, Knox, Marion, Robertson, Rutherford, and Shelby; and required for projects over $3,000 to less than $25,000. Note: A license is required regardless of whether a permit is needed.

 

HOME IMPROVEMENT LICENSE APPLICATION - PACKAGE


OTHER LICENSING INFORMATION

Insurance Information [pdf]

HI Rules and Regulations [pdf]

HI Law [pdf]

Law, Rules and Regulations - Updates

>>NEW! Roofing Services Contracts and Insurance Payment Requirements (Effective July 1, 2012)

>>Theft/Felony Law - Failure to Refund Money

>>NEW! Fraud - Theft Law Amended

Secretary of State - Registraton of Corporations/LLC

Business Tax Licenses for Local Government

Forms and Downloads (Resource for all Application Forms)

Worker's Compensation Insuance - Industry Guidelines (Labor and Work Force Development)

Valuable Resources

 

(Note: Applications for licenses are approved by the Board at their regularly scheduled meetings. See "Public Meeting Calendar" for dates.)

 

SUMMARY - DEFINITION OF HOME IMPROVEMENT

The Home Improvement license is required by law to perform remodeling to existing residential homes, where the cost is more than $3,000 to less than $25,000 ($25,000 and up require a "Contractor's" license).  The total contract or cost includes materials and labor. It is required to repair, replace, remodel, alter, conversion, modernization, improvement, or addition to any land or building, such as,  driveways, swimming pools, porches, garages, landscaping, fences, fall-out shelters, roofing, painting and other improvements adjacent to the dwelling (see T.C.A. 62-6-501 for a complete definition in the law). Valuable information on *lead abatement below is provided below.

 

Home improvement does not cover electrical, plumbing or *HVAC.  You must check with the "Local Government" jurisdiction for their requirements, permits and inspections. This may include obtaining the State's LLE (Limited Licensed Electrician) or LLP (Limited Licensed Plumber) license; and there is not a state *HVAC license for small projects less than $25,000. The contractor's license is required for these classifications for projects $25,000 or more (includes materials, labor costs, and profit).

 

*HVAC contractors may be regulated at the local level and if not, the Home Improvement license will be required in order to perform HVAC. (See T.C.A. 62-6-503)

 

Note: A license is required regardless of whether a permit is needed!

 

HOME IMPROVEMENT - APPLICATION REQUIREMENTS & PROCESS

 

*No Examination is Required*

  1. Application fee: $250.00 (two (2) year license; check made payable to "Home Improvement"

  2. Address - If listing a P.O. Box for mailing address, must also provide a physical address of the business
    • Law requires providing an alternate address ,other than for the business for the owners

  3. Name on License - Cannot get a license in the same or similar name of an existing licensee (check the "License Search" tool of the website at: http://verify.tn.gov/ Also check with the Secretary of State's office for registered names. Licenses cannot be issued for "Assumed Names". Must operate in exact name as licensed which is as listed on the bond.
    >>Secretary of State's - Provide proof of registration with Tennessee. T.C.A., Title 48 - Requires all contractors and subcontractors, that are domestic or foreign Corporations, Limited Liability Companies, Limited Partnerships, or Limited Liability Partnerships, to be in good standing with the Secretary of State. This includes being duly incorporated, authorized to transact business, and/or in compliance with other requirements as detailed by the Secretary of State. See also "Business Tax" for local government licenses.

  4. Bonding or proof of financial responsibility in the amount of $10,000 in ONE of the following forms (the license is issued in the exact name of the entity/ individual and mode of operation as on the bond):
    >>Surety Bond (with written Power of Attorney attached from Insurance Company); or
    >>Cash Bond; or
    >>Property Bond; or
    >>Irrevocable Letter of Credit (ILOC)

    Note: Bonds and ILOC's cannot be released for one (1) year. In addition, the Board may require additional financial information as outlined in the Rules and Regulations.

  5. Proof of Insurance
    >> General Liability - in the minimum amount of at least $100,000; and
    >> Workers' Compensation - required for each employee and they must be covered in Tennessee. Owner(s) as the employer, may be required to cover themselves, unless, they fall within the exemptions in the law or they may register for an exemption.

  6. Disclosure of all the following is required: unlicensed activity, judgements, complaints, licenses, businesses, addresses, revocations, experience, etc., as requested on the application. Failure to disclose may cause the license to be denied. Provide copy of photo ID (DL).

  7. Information of any and all addresses of entity and owners is required. Each business location may be required to be licensed, depending on the county where work is performed.

  8. Supply a copy of the written contract to be used when contracting with consumers. The law requires all contracts to be in writing with very specific language (see T.C.A. 62-6-508). Cannot require more than 1/3 down payment. Failing to complete work without refunding money may be considered a felony by theft (see T.C.A. § 39-14-105). See important new guidelines effective July 1, 2012, relative to contract requirements in order to be paid by insurance companies, including, providing a 3 day cancelation clause, as outlined in Public Chapter 821.

  9. An interview with the Board may be required if the application is submitted incomplete with discrepancies; does not list current experience; record of complaints, including those with other agencies; judgements; felony convictions; and for violating the law. A license may be denied or revoked for failing to disclose all information as required by law. Applicants will be notified of the time, date and location if the Board requests an appearance.

  10. Issuance of a license must be approved by the Board. Applications are due by the 20th of the month prior to the Board meeting date (see the Calendar for meeting dates) to ensure they are reviewed for completeness prior to the meeting. n order for a license to be issued prior to the meeting, the contractor would need to provide a written request for an emergency review and provide an explaination with their complete application, and a temporary license may be granted if approved by a designated Board member.

  11. Be sure to read the rules and law. These include important contract requirements, advertising and payment guidelines.

  12. You may check status of license issuance at:  http://verify.tn.gov/ (Do not contract, offer, bid, provide estimates, solicit business or perform work until first licensed.)

  13. The Board must be notified within 30 days when there is a change of ownership, address or other changes with the license entity.

Download the Home Improvement Application [pdf]

 

Felony Conviction/ Judgements / Disclosures

 

Conviction does not automatically preclude someone from licensing, however, it does require the full Board's approval. If you have been convicted of a felony in any jurisdiction (Tennessee or any state); or if you have had disciplinary action against another professional license; court judgements; or complaints, you must attach a statement explaining the details of the action (Conviction - priovide the charging document, the disposition and proof of any sentence or court order and release of probation, provide a criminal back-ground summary to show history since conviction. Other - Judgements/complaints - provide details in writing and any court ruling). In some cases, the Board may may request appearance before the Board which meets at least six (6) times annually. The Board is charged with protecting the safety and welfare of the public and they will judge each individual case on it's own merit. Typically, a person who is still on probation will not be granted a license.

 

The law requires disclosure of felonies, as well as any court litigation, pending law suits, complaints with other agencies, or judgements relative to home improvement. A license is not automatically denied due to judgements and convictions, however, failure to disclose is a violation of law. A civil penalty may be assessed for not providing true and correct information, as well as the license being denied or the renewal revoked.

 

License Issuance

 

Upon approval of your completed application, a permanent license will be mailed. Applications must be submitted correctly and complete. The license is issued to the entity named on the financial responsibility, such as the bond. Therefore, all documents must be in this exact name and mode of operation. Any discrepancies on the application may hold up the review and approval process. Our staff will review before presenting to the Board for approval to ensure everything is in order, however, if incomplete or descrepancies are found during the Board review, an interview may be required at the Board's next regularly scheduled meeting before the license can be considered. Once the license is issued, please display in a noticeable place at your business location and list your license I.D. number in advertisements. Never require the consumer to pay for the project prior to completion. The law allows 1/3 down payment to begin the project and contracts must be in writing with strict language requirements. A contractor who accepts money and fails to perform the work within 90 days, may be prosecuted for a felony, unless they refund the money. See Public Chapter 1055.

 

Effective July 1, 2009, licenses are issued biennially (two year renewal cycle); cannot be renewed if expired in excess of 90 days and would need to reapply by supplying a new bond, insurance and application.. License is considered invalid upon bond cancellation. This license is for projects where the total cost or contract is more than $3,000 to less than $25,000 (larger projects require a "Contractor's" license) and a home improvement license does not cover electrical, gas, mechanical, *HVAC or plumbing, where separate trade licenses are required. If you are a corporation, LLC or Limited Partnership, always ensure you are actively registered with the Tennessee Secretary of State. You should receive a license renewal within 90 days of expiration. However, you must notify the Board of any address change, as state mail is not forwarded. The Board must be notified of any changes, including ownership of the entity. The license is not transferable to the new owner(s). If you do not receive a renewal in the mail, you may download a renewal from the website at the Forms Download section. Fees cannot be submitted online, at this time. Be sure to be knowledgeable of all laws, rules and regulations.

 

*HVAC contractors may be regulated at the local level and if not, the Home Improvement license may be required in order to perform HVAC. (See T.C.A. 62-6-503)

 

 

BONDS / IRREVOCABLE LETTER OF CREDITS (ILOC)

 

A home improvement contractor's bond or ILOC filed with our Board for obtaining and renewing a license cannot be released to the contractor for 12 months after their initial request to replace, withdraw, or until after the license has been expired for one (1) year. This is to ensure all prior projects are covered. Therefore, if providing a cash or property bond, please keep this in mind since it cannot be released.

 

The bond is public information and consumers may request to file against the bond. If anytime the bond is terminated, the license is considered invalid. (See T.C.A. 62-6-506) Consumers may request a copy of the bond and insurance, and it is a matter of public record.

 

 

NEW CONTRACT REQUIREMENTS

 

Home Improvement licensed contractors must ensure their contracts are as follows:

  1. Contracts must be in legible writing and contain the complete agreement between the owner and the home improvement contractor;
  2. State the full names and addresses of all parties, the license number of the home improvement contractor, the date when executed by the parties and contain a description of the work to be done and the goods to be used;
  3. Be completed in full without any blank spaces to be filled in after the contract is signed by the owner and clearly describe any other documents which are to be incorporated, and shall contain the following notice directly above the space provided for the signature of the owner: "NOTICE TO OWNER: Do not sign this contract if blank. You are entitled to a copy of the contract at the time you sign";
  4. Contain the approximate dates when the work will begin and be substantially completed;
  5. Contain the agreed upon consideration for the work;
  6. Contain a notice that all home improvement contractors must be licensed by the board and that any inquiries about a contractor should be transmitted to the board's office;
  7. Contain all other matters upon which the parties lawfully agree; and
  8. Not contain any power of attorney to confess judgment.  No sales person, agent or employee of the home improvement contractor shall be authorized to make any changes in the agreement on behalf of the owner.
  9. NEW! Roofing Services Contracts for Insurance Payment Requirements (Effective July 1, 2012)
    • This law applies only to roofing contractors being paid by insurance companies, to include specific consumer protection language in their contract: 1) Right to cancel within 3 days; 2) Contact information: Address, Telephone #, Fax #, License #, Email Address; 3) Detailed Description of Repairs; and 4) Must refund any monies paid prior to cancelation of the contract, within 10 days. See Public Chapter 821 for more information in the law.

 

 

HOME IMPROVEMENT ADVERTISEMENT REQUIREMENTS

The law requires home improvement licensed contractors to include their license ID number and type of license held, anytime they advertise as "licensed". (For example, anyone advertising as "Licensed, Bonded and Insured" would need to also include "Home Improvement License ID# 0123"). Residential and Commercial licensed contractors are exempt.

 

 

PROHIBITED ACTS

See T.C.A. 62-6-510 relative to prohibited acts from a home improvement licensed contractor. The following is a summary:

Abandonment or Willful Failure to Perform;

Misrepresentation or False Promise of Character to Influence;

Fraud or Material Alteration of the Contract;

Preparing or Accepting any Mortgage or Promissory Note with Greater Monetary Obligation;

Violation of Other Laws (Local Government's, Workers Compensation Insurance, Labor, etc.);

Misrepresentation of Facts by Applicant in Obtaining a License;

Failure to Notify the Board of any Change of Control in Ownership, Business Name or Location;

Operating in a Name Other than as Licensed;

Advertising as Licensed without Referencing Appropriate License Number

Failure to Comply with any Order, Demand or Requirement Lawfully made by the Board

The Demand for any Payments Prior to the Signing of a Home Improvement Contract;

Requiring more than 1/3 of the Contract Price for a Deposit, unless:

  • The contract allows for the contractor to furnish a performance and payment bond, lien and completion bond, or bond equivalent covering full performance; or
  • Advised in writing of the right to withhold final payment up to 100% before completion and the owner agrees of a schedule.

Making false or Deceptive Representations in any Advertisement or Solicitation of Sponsorship with a bnk, Savings and Loan;

Using the Name or Logo of any Bank without Written Consent;

Having Controlling Ownership in the Lender Providing Loan;

  • Accepting anything of value for the referral of a borrower to the lender; or
  • Being a Cosigner or Guarantor for a loan; or
  • Acts prohibited from the Consumer Protection Act defined in T.C.A. Title 47, Chapter 18, Part 1.

NOTICE: Failing to perform the work within 90 days after payment, may be considered theft unless money is refunded. See new felony statute.

 

NEW! Roofing Services Contracts and Insurance Payment Requirements (Effective July 1, 2012)

 

Note: For projects $25,000 or more, a contractor's license is required (licensed residential and commercial contractors are exempt from home improvement law requirements). A home improvement license is not required for new residences or commercial projects, less than $25,000.   Home improvement license does not cover electrical, *hvac or plumbing.  As always, please check with you local codes office. If you have a contractor's license to perform residential, you do not have to obtain a separate home improvement license. See "Local Government" for contact information.

 

*HVAC contractors may be regulated at the local level and if not, the Home Improvement license will be required in order to perform HVAC. (See T.C.A. 62-6-503)

 

 

LEAD ABATEMENT

 

Lead abatement remodelers are required to be certified through the Department of Environment and Conservation and may be contacted at 1-888-871-5323 or their web site at:

http://www.tn.gov/environment/swm/leadpaint/

 

Quick facts on EPA’s Renovation Repair and Painting (RRP)

Fully effective on April 22, 2010  - Firms must be certified, workers must be trained, and follow specific lead-safe work practices for work performed in pre-1978 homes and child-occupied facilities, if lead paint is disturbed, impacts general contractors, carpenters, painters, electricians, plumbers, “handymen”, window and door replacement crews, etc.

 

Time Line for Lead Abatement Requirements

Now – Contractors that disturb paint in buildings built prior to 1978 must distribute EPA’s new"Renovate Right" brochure, (Renovate Right is available at: http://www.epa.gov/lead/pubs/renovaterightbrochure.pdf

Summer 2009 – Appropriate staff can take training course to become certified, once trainers are accredited. October 2009 – Firms can apply for EPA or state certification.

April 2010 – Businesses engaged in renovation, repair or painting activities in buildings built prior to 1978 must be certified, use trained workers, and follow specific lead-safe work practices to prevent lead contamination.

 

For more information, the Environmental Protection Agency's website is at: www.epa.gov/lead

 

 

RENEWAL OF HOME IMPROVEMENT LICENSE

The Home Improvement license renewal is mailed to contractors 90 days prior to the expiration date. If you have moved, state mail is not forwarded. You may download the renewal from the "Forms and Downloads". The renewal is required to be submitted 30 days prior to the expiration date to prevent working with an expired license, as there is NOT a grace period. (After a license has been expired for 3 months, must submit a new license application; less than 3 months, may renew with late fees.)

 

 

NAME CHANGE / MODE OF OPERATION / OWNERSHIP CHANGES

Be sure to contact the Board office to apply for a change (name, mode of operation) and obtain a new license before contracting. You will be required to replace the financial responsibilty (surety bond, etc.) and insurance to be in the new name.

 

The license is not transferable to new owners. If there is a change in ownership with the remaining owners of the existing partnership or corporation licensed, you must notify the Board office in writing and supply the financial responsibility (surety bond) for the existing owners within 30 days, and may be required to supply a new license application if it is a change of 25% or more. (See T.C.A. 62-6-507 and Rule 0680-07-.05)

 

 

EXEMPTIONS

A homeowner is exempt from obtaining a home improvement license to perform work on their own property.

 

 

COUNTY INFORMATION

ADOPTING THE HOME IMPROVEMENT LAW

Counties may adopt the Home Improvement license requirement with a 2/3 vote from their commission. Adopting this requirement may be done without additional expense to the county, and it would be their option to charge for permits or perform inspections. Home Improvement licensing provides protection to consumers since they must be bonded and insured, and requires contracts to be in writing. The State also offers a mediation program with licensed contractor complaints. In addition, laws are in place to prevent unlicensed contractors who violate the licensing law, from filing a lien. They may also be prosecuted for theft should they take money without performing the work. Lastly, unlicensed contractors are not entitled to the total contract cost of the project and may only recover documented expenses in court (TCA 62-6-103). Many federal programs, such as the "Weatherization Assistance Program" require contractors to be licensed.

 

Presently, the following *nine (9) counties require a home improvement license for projects in excess of $3,000 to less than $25,000: Bradley, Davidson, Haywood, Hamilton, Knox, *Marion, Robertson, Rutherford, and Shelby.  Any remodeler may apply for the home improvement license, as consumers prefer to only hire state licensed contractors who are licensed, bonded and insured! 

 

*Marion County recently adopted in May, 2010.

**Effective 8/23/08, Johnson County no longer requires a home improvement license.

 

 

Resources

Application - Home Improvement [pdf]

App Renewal - Home Improvement Renewal Form [pdf]

Asbestos

Bond Format (Surety)

Code Adoptions

Code - State Residential Building Program

Complaint Process

Construction Services Provider (WC Insurance Exemption)

Consumer Resources

Contractor License Requirements (Projects $25,000 or more)

Corporation and LLC Registration (Secretary of State)

Disciplinary Actions

Electrician (LLE) (less than $25,000)

Employment Security - Insurance

Employment Rules (Hiring Ilegal Immigrants)

FEIN Number

FAQs - Frequently Asked Questions

Forms and Downloads

Insurance - General Information (General Liability and Workers' Comp)

Irrevocable Letter of Credit

Law, Rules and Regulations

Lead Based Paint Abatement Certification (TDEC)

NASCLA - National Association

Name or Mode of Operation Change Request

OneStop Business Resource

Plumber (LLP) (less than $25,000)

Radon - Construction Tips

Reciprocation - There is NOT a reciprocation agreement with other states for Home Improvement.

Reports and Data

Renewal of Home Improvement License

Security and Alarm Systems

Septic Tanks

Tax ID Numbers/Business Licenses (Department of Revenue)

Tree Trimming

Unemployment Insurance

Valuable Resources

Weatherization Program

Well Drilling

Workers' Compensation Resource (Tennessee Labor & Work Force Development)

 

Weatherization Contractors

Become a Qualified Tennessee Weatherization Contractor - WAP!

 

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