Tennessee Contractor License Search

Who Is a Contractor in Tennessee?

A contractor is any person or business that offers services to an interested party based on oral or written agreements in exchange for compensation. Tennessee contractors are regulated by the state's Department of Commerce and Insurance (DCI) through its Board for Licensing Contractors. Per the requirements of this agency, a contractor license is needed to bid for or undertake any project worth $25,000 or more (cost of labor and materials inclusive). However, licensing may also be required for electrical, plumbing, and HVAC projects worth less than $25,000 in some municipalities and also for home improvement projects worth $3,000 - $24,999 in Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby counties.

The DCI currently offers several license classifications. Nevertheless, contractors across the state are into two main categories:

• Prime/General Contractors: Prime contractors bid or contract directly with project owners. These contractors typically manage residential, commercial, and industrial building and construction projects on behalf of the project owner. They are also authorized to perform actual construction and home improvement work within the scope of their DCI-issued license. Note that licensing is typically only needed for projects worth $25,000 or more. However, a separate DCI-issued home improvement license is required to perform residential remodeling or repair projects worth $3,000 - $24,999 in Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby counties.
• Subcontractors: subcontractors are professionals who contract with a prime contractor or another subcontractor, not the project owner. These subcontractors are typically hired by the prime contractor (or fellow subcontractor) to perform a specific task on the project in question. They are sometimes referred to as specialty contractors for this reason. Excluding electricians, plumbers, HVAC contractors, and roofers, subcontractors do not need a DCI-issued license to perform services worth less than $25,000 (this limit is raised to $100,000 for masons).

How to Search for a Contractor's License in Tennessee

Contractors in Tennessee must obtain a license from the state's Department of Commerce and Insurance (DCI) before offering services worth $25,000 or more. A DCI-issued license is also required for electrical, plumbing, and HVAC work, regardless of its overall cost, and home improvement work worth $3,000 - $24,000 in certain counties.

Before committing, you should always check your prospective contractor's license status and confirm they have complied with all relevant requirements. You can do this via the Uhire Professional License tool or the DCI's License Search and Verification portal. Both platforms provide search options such as the contractor's name, location, and license type, which assist in narrowing down the search results.

Penalty for Hiring a Contractor Without a License in Tennessee

Per state law, knowingly accepting a bid from an unlicensed or inappropriately licensed contractor in Tennessee is considered a Class A misdemeanor (this carries a statutory penalty of up to one year in jail and $2,500 in fines). Other consequences of hiring unlicensed or inappropriately licensed contractors include the following:

• Unlicensed contractors usually do not have insurance coverage. Hiring one exposes yourself to liability if accidents, property damage, or other issues occur during the project.
• The licensing process typically involves contractors demonstrating their knowledge, skills, and competence. By hiring an unlicensed contractor, you risk engaging an unqualified individual, inevitably resulting in poor service delivery.
• Unlicensed contractors cannot pull permits for your project and are likely to carry on without doing so, resulting in code violations, sanctions, and even a decrease in your property value.

Note that unlicensed contracting in Tennessee is also a Class A misdemeanor. In addition to the statutory penalties for this offense, violating contractors also face administrative fines of up to $5,000 per offense.

How Much Does a Contractor Charge in Tennessee?

Contractor rates in Tennessee are primarily determined by the type of contractor involved. For instance, subcontractors (and home improvement contractors) typically charge hourly rates of about $50 - $100 for their services, with overall costs influenced by factors like the scope of work and the contractor's level of experience.

The table below provides average hourly rates for several subcontractors across Tennessee. Note that actual rates may vary by contractor and location:

Electricians

$60 - $100

Plumbers

$60 - $100

HVACR Technicians

$55 - $100

Carpenters

$55 - $85

Painters

$50 - $70

Roofers

$55 - $100

Flooring Contractors

$50 - $80

Masons

$50 - $100

Landscapers

$45 - $80

Architects

$75 - $175

Interior Designers

$70 - $155

Excavation Contractors

$80 - $150

Concrete Contractors

$50 - $100

Handymen

$40 - $70

Appliance Repair Technicians

$45 - $85

Exterminators

$50 - $90

Cleaning Services

$45 - $80

Movers

$50 - $130

On the other hand, prime (general) contractors typically charge clients a percentage of the project's total cost. Some prime contractors may use an hourly fee rate, but this is rare. Percentage rates generally range from 5 – 25 percent of the total project cost, and actual fees are calculated using one of two methods:

• Fixed Bid/Lump Sum Pricing: here, the contractor offers a single price that covers the project's labor, material costs, and their fees. A markup is usually added to the materials and labor costs to cover unexpected situations.
• Time and Materials/Cost-Plus Pricing: here, the contractor estimates the overall cost of materials required for the project and sets an hourly rate for labor and subcontractors, which is charged as the work is complete. Cost-plus pricing is preferable for projects without a fixed completion date or timeline, as it allows flexibility.

A typical building and construction project in Tennessee will cost you an average of $100 – $135 per square foot; however, the total cost of your project will be determined by factors like:

• Your location,
• The nature and scope of the project,
• Site conditions and accessibility,
• The reputation and experience of the contractors involved,
• Contractor fees,
• Materials and labor costs,
• Permit fees.

Tips for Hiring a Contractor in Tennessee

New construction, commercial or residential remodeling, and home repair projects can be costly ventures, and hiring unsuitable contractors for these projects can result in significant financial losses. As such, ensuring their qualifications and suitability for the job is crucial when selecting contractors to handle your project. We have provided a few tips to help you do this:

• Get a clear understanding of the project's scope and the kinds of contractors needed to execute it. You can contact the DCI at 1-800-544-7693 or your local building department to find out the regulatory requirements for the project.
• Get and compare bids for your project from at least three contractors
• Request references and check them
• Always verify your preferred contractors' license status before hiring. Confirm their insurance and bond coverage as well.
• Find out whether subcontractors will be involved and ensure they are adequately experienced, insured, bonded, and licensed, where necessary.
• Get a well-detailed contract before any work starts or payments are made.
• Never pay the full cost of the project upfront. Tennessee contractors can not request more than one-third of the project's total cost upfront for home improvement projects; however, it is advisable to follow this approach for all projects.
• Avoid cash payments.
• Do not sign a completion certificate until the project has been properly completed.

Is Your Contractor Insured and Bonded as Required by Tennessee Statutes?

Tennessee contractors must comply with the following insurance and bond requirements before being licensed by the Department of Commerce and Industry (the state's regulatory authority for contractors):

• Provide proof of general liability insurance with a minimum coverage of between $100,000 and $1,000,000 (the actual figure is dependent on the contractor's license monetary limit)
• Provide proof of workers' compensation insurance or an exemption where applicable
• Provide a $10,000 surety bond or irrevocable letter of credit (this is only required for contractors who wish to obtain a Home Improvement License)

Confirming that your contractors have complied with these requirements and are sufficiently insured and bonded ensures that you won't be held liable for any unanticipated incidents that may occur during your project, like injuries, property damage, or contractor omissions and errors. Note that insurance and bond coverage serve different purposes - insurance covers the cost of project-related incidents like bodily injuries and property damage. In contrast, bonds cover the cost of losses caused by the contractor's failure to complete the project as promised.

Therefore, before you enter into any agreements with contractors in Tennessee, request copies of their insurance and bond certificates and validate these documents with the relevant issuers. You should also confirm that the contractor's coverage limits will be adequate for the scope of your project.

Contact the DCI's Board for Licensing Contractors at (615) 741-8307 or (800) 544-7693 for additional information on Tennessee contractors' bond and insurance requirements.

Top Home Improvement Scams in Tennessee.

Home improvement and repair scams have been the number one complaint category in Tennessee for several years, accounting for over 10 percent of the total complaints filed with the state's Division of Consumer Affairs in 2022 alone. Fraudulent contractors target unsuspecting Tennesseans planning home remodeling or repair projects and try to deceptively obtain money from them through several ruses, such as:

• Going door-to-door, offering free home inspections and discounted repair services
• Using high-pressure sales tactics to get homeowners to pay for their services
• Downplaying the need for written and signed contracts
• Lying about their license status and insurance coverage
• Tricking clients into signing contracts with hidden fees, harmful clauses, or blank spaces that can be filled in later
• Accepting payment but leaving projects unfinished or not performing any work at all
• Deliberately failing to pull required permits
• Failing to pay subcontractors, laborers, and materials suppliers despite receiving payment for this from the homeowner

You can avoid these fraudulent contractors when searching for contractors to handle your home improvement or repair projects by taking the following precautions:

• Be cautious of door-to-door contractors
• Compare bids from several contractors
• Request and check references before making a commitment
• Always confirm your prospective contractor's license status. You can also call (615) 532-3996 and (800) 544-7693 to check for any complaints or disciplinary actions against the contractor.
• Ensure that the contractor has sufficient insurance coverage
• Insist on a written contract before any work starts and review this contract carefully before signing
• Never pay for the project in full before work starts. Advance payments should also not exceed one-third of the project's total cost and ensure that subsequent payments match the project's progress
• Get lien waivers from the contractor and any subcontractors involved