Tennessee Contractor License Bond

In Tennessee, aspiring contractors must acquire a Tennessee contractor license bond as part of the state-wide contractor licensing process. Contractors must get contractor license bonds based on their subspecialty and the city/county in which they operate. The bond ensures that contractors fulfill their construction work responsibilities, adhere to state laws, and compensate the public for financial harm if they don't comply with licensing regulations.

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How Much is a Tennessee Contractor License Bond?

There are two types of contractor license bonds in Tennessee. Please see table below for bond amount and pricing.

       Bond Type             Bond Amount + Pricing                       Tennessee Board for Licensing Contractors Home Improvement            Contractor Bond                     $10,000, starting at $90                       Tennessee Board for Licensing Commercial Contractors Contractor's            License Bond                     $500,000, starting at $113                       Tennessee Board for Licensing Small Commercial Contractors            Contractor's License Bond                     $1,000,000, starting at $90                       City of Chattanooga Out of State Contractor Bond                     $1,000, starting at $90                       City of Franklin Contractor Bond                     $1,000, starting at $90                       City of Gallatin Contractor Bond                          Electrical, Plumbing, Gas, Mechanical and Excavation            Contractor                     $10,000, starting at $90                       City of Gallatin Contractor Bond                General Contractor             $50,000, starting at $250                       City of Goodlettsville Electrical, Plumbing, Gas, or Excavation            Contractor Bond                     $40,000, starting at $180                       City of Hendersonville Contractor Bond                          Electrical, plumbing, or gas/mechanical contractor                     $10,000, starting at $90                       City of Johnson City Building License Bond                     $10,000, starting at $90                       City of Johnson City Plumbing License Bond                     $10,000, starting at $90                       City of Kingsport Gas and Mechanical Contractor Bond                     $10,000, starting at $90                       City of Kingsport Electrical Contractor Bond                     $10,000, starting at $90                       City of Kingsport Plumbing Contractor Bond                     $10,000, starting at $90                       City of Knoxville Electrical Contractor Bond                     $10,000, starting at $90                       City of Knoxville Mechanical Contractor Bond                     $10,000, starting at $90                       City of Knoxville Plumbing Contractor Bond                     $10,000, starting at $90                       City of Morristown Electrical Contractor Bond                     $2,000, starting at $90                       City of Morristown Plumbing Contractor Bond                     $5,000, starting at $90                       Hamilton County Contractor License Bond                     $10,000, starting at $90                       City of Nashville/Davidson County Contractor Permit Bond                     $10,000, starting $90                       Memphis and Shelby County Contractor Bond                     $25,000, starting at $125      

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Tennessee Contractor Bond FAQs

What Type of Contractors are Required to be Licensed in Tennessee?

Obtaining a contractor license in Tennessee is mandatory if your occupation falls within any of the six specified contractor classifications and the project costs $25,000 or more:

• Building Combined 
• Residential 
• Limited Residential
• Commercial
• Small Commercial
• Industrial

Additionally, several counties require a Home Improvement license for remodeling projects costing $3,000 to $25,000. These counties in Tennessee currently are Bradley, Davidson, Haywood, Hamilton, Knox, Marion, Robertson, Rutherford, and Shelby.

How do Contractors in Tennessee Differ from Each Other?

Here's an overview of the six different contractor classifications in the state of Tennessee:

• Building Combined: This license is the most comprehensive, as it applies to many projects, including residential, commercial, and industrial ones.‍
• Residential: This license encompasses the construction, repairs, renovations, and enhancements of residential properties. However, it's important to note that in Tennessee, a structure is classified as residential only if it has three stories or fewer.
• ‍Limited Residential: The contractor can undertake residential projects with a Limited Residential license. Yet, this license restricts the contractor to single-family homes, and the project budget must be at most $125,000.
• ‍Commercial: Contractors have the authority to enter into contracts for the construction, modification, repair, or demolition of any building or structure intended for use by the general public. This includes residential construction with more than four units or exceeding three stories in height.
• ‍Small Commercial: Similar to commercial with the exception that the project cannot exceed $1,500,000
• ‍Industrial: A contractor in this category has the permission to enter into contracts for the construction, modification, repair, and removal of buildings or structures utilized in industrial production and services, such as manufacturing plants.

Above are the six main classifications that contractors in Tennessee can fall into, but each of these categories has its classifications. For instance, the building combined category has 34 different classifications. Knowing and understanding which contractor type you are classified as in Tennessee is crucial.

What is considered Home Improvement in Tennessee?

According to Tennessee Home Improvement Law code 62-6-501, home improvement encompasses a wide range of activities to enhance, renovate, or upgrade any property or its components intended for residential use, such as a house or a dwelling with up to four separate units.

Examples relating to home improvement can be:

• Driveways
• Pools
• Porches
• Garages
• Gardens
• Fences
• Shelters

Furthermore, "home improvement" encompasses installing central heating or air conditioning systems, storm windows, or awnings. 

Home improvement in Tennessee is not:

• Building a new home or contractor work with a completion guarantee for a new building project.
• Any home improvement project costing $3,000 or less.
• Replacing, installing, or connecting appliances to existing plumbing lines that require altering those lines.
• Replacing, installing, and connecting dishwashers, disposals, and refrigerators with ice makers to existing household plumbing.
• Replacing, installing, and connecting dryers.

Who Regulates Licensing for Contractors in Tennessee?

In Tennessee, contractors are regulated by the Tennessee Board for Licensing Contractors (TN BLC).

Email: Contractors.Home-Improvement@tn.gov 

Phone: 615-741-8307 or 800-544-7693

Mailing address:

500 James Robertson Pkwy

Nashville, TN 37243

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How can I Obtain a Contractor License in Tennessee?

To become a licensed contractor in Tennessee, the applicant must complete the "Business & Law" examination, which costs $55. Depending on their specific classification, some contractors may also need to pass a "Trade" examination.

Once you've successfully passed the exam, the next step is to proceed with your Tennessee Contractor's License Application. You must set up an account through CORE (Comprehensive Online Regulatory & Enforcement System) to do this online.

You can also find the application packet online. Filling out the application itself is straightforward, but please be aware that there are associated fees, and additional supporting documentation may be needed. The application fee amounts to $250, and it is non-refundable.

In addition to the application form, you'll be required to provide the following:

1. A financial statement
2. A reference letter from a previous client or employer.
3. General liability and workers' compensation insurance proof.
4. A copy of your examination scores.

The application takes about 4 to 6 weeks for it to be processed by the Tennessee Board of Licensing Contractors, and once it has been processed, the license will be valid for two years.

Does Tennessee have Licensing Reciprocity?

As a reminder, licensing reciprocity occurs when states recognize a license obtained in another state, saving the contractor from completing the entire process of getting a new license. This is like how your driver's license works across different states. You don't need to demonstrate your driving skills each time you travel to a new state because they trust the validity of your license from your home state.

Tennessee has reciprocity agreements for contractor licenses with the following states:

• Alabama (General, Electrical, Residential, and HVAC) 
• Arkansas (Commercial/Residential Building only) 
• Georgia (Commercial Building and Electrical) 
• Louisiana (Residential, Commercial, Electrical, and Mechanical)
• Mississippi (Residential, Commercial, Electrical, Mechanical 
• North Carolina (Residential/Commercial Building, Electrical) 
• Ohio (Electrical, Plumbing, and HVAC) 
• South Carolina (Commercial Contractors Licensing Board) 
• West Virginia (Residential, Commercial, Industrial Building, Electrical, Mechanical, Masonry) 

There are two exceptions to qualify for licensing reciprocity in Tennessee:

• The reciprocating state must be the applicant's state of residence.
• Applicants with a history of disciplinary actions, ongoing complaints, or felony convictions will not receive an exemption from the Tennessee trade examination.

You can access the Trade Exam Waiver Agreement (Reciprocity) by downloading it from the Tennessee Department of Commerce and Insurance's site.

What if I don’t get the required contractor license in Tennessee?

Yes, engaging in contractor work without a license in Tennessee carries consequences. Here are some examples:

• The Tennessee Board for Licensing Contractors can impose fines of up to $5,000 per violation on unlicensed contractors and has the authority to suspend or revoke any existing Tennessee contractor licenses. 
• Unlicensed contractors in Tennessee may also face criminal repercussions, as violating licensing requirements is classified as a Class A misdemeanor, carrying potential penalties of up to one year in jail and fines of up to $2,500. 
• Injured parties can pursue claims under the Tennessee Consumer Act, where a contractor found in violation may be held personally liable for damages and attorney's fees rather than just the company.