The next time Tennessee residential contractors renew their license, there will be a new requirement to look out for. Beginning January 1, 2020 residential contractors must complete eight hours of continuing education every two years following a recent legislative amendment.
Tennessee contractors license renewal: Residential contractors must continue education
Let’s start with the new rules from Nashville: Tennessee residential contractors must complete eight hours of continuing education via a board-approved provider “biennially” (every two years).
But, any residential contractors who got their residential contractors license before January 1, 2009 will be grandfathered in. They won’t need to get the eight hours prescribed by the new rules. But, those who got their contractor license after 2009 and those who submit a new application moving forward will have to keep this in mind.
This rule isn’t effective immediately, though. According to the statute, itself: “For administrative and rulemaking purposes, this act shall take effect upon becoming a law…For all other purposes, this act will take effect January 1, 2020.”
What constitutes continuing education?
To get continuing education hours, a contractor doing home improvements in the state of Tennessee might not have to do much at all…
1. Active membership in a professional trade association
First, active membership in a board-approved professional trade association will count for 4 hours per year. As you may recall from above, Tennessee residential contractors will only need to get eight hours for every two years. So, presumably, if a contractor actively participates in a professional trade association for two years – they’ll meet their eight-hour requirement.
That seems a bit backwards, doesn’t it? After all, if the purpose of this legislation is to make sure residential contractors are continuing their education, how does membership of a professional trade association further that cause? My guess is that trade associations lobbied hard on this one…
In any event – proof of membership must be filed with the board every two years to fulfill these requirements. Since that filing is only required once every two years, and since the statute explicitly states that membership constitutes 4 hours annually, this seems like further proof that active participation in a trade association is all that’s required. Not too steep of a price to keep your Tennessee business properly licensed…
2. Online and in-person training options will be available, too
It seems unlikely that a contractor would actually take continuing education coursework when being a member of a trade association would check off the box here. Still, under the new 62-6-112(g)(3), the Tennessee Board for Licensing Contractors will create rules for how continuing education training will be conducted. At a very minimum, the board is required to create some way to undertake online and in-person training.
The Tennessee contractors license renewal rules could impact payment rights
There are a few ways these new rules surrounding continuing education might impact payment.
Availability of lien rights
Under § 66-11-150 of Tennesse’s lien statute, if a Tennessee residential contractor fails to properly renew their contractors license, they’ll lose their right to file a mechanics lien. Specifically, as we mention in this resource, Tennessee residential contractors working on 1-4 family residential projects must be licensed if they want to utilize lien rights.
Proceeding without the ability to lien could be a problem considering mechanics liens are the most powerful tool for recovering construction payments. More on that here: How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid.
Take a deeper dive:
Other penalties come into play, too
Loss of lien rights isn’t the only thing on the table. In Tennessee, unlicensed contractors can be fined up to $5,000 per offense for performing work that requires licensure. On top of that, criminal penalties could come into play, too. Those who violate licensure requirements may end up with a Class A misdemeanor which could land additional penalties an even jail time.
These may be new license requirements, but they’re not all that scary. For long-time licensed Tennessee residential contractors, there’s probably no change at all. As mentioned above, the new continuing education requirements only apply to those who were licensed on or after January 1, 2009.
For those who do have to follow these requirements during a Tennessee contractors license renewal – they’re still not hard to abide by. Eight hours over two years is nothing, especially considering that being a member of an approved professional trade association should meet the mark by itself. As far as contractor licensing rules go, this is an easy one.
Still, while this requirement is a low bar – it’s still a requirement. Tennessee residential contractors should make sure that they’ve hit their continuing education requirements every two years. These requirements don’t fully kick in until January 1, 2020 though – so there’s plenty of time to prepare.