This week, a tornado ripped through Nashville and the surrounding counties in central Tennessee. The natural disaster caused massive damage, leaving devastation and heartbreak in its wake. As support pours in from across the world, local community members, from church pastors to the Tennessee Titans, gather together to assess the next steps. Eventually, the conversation shifts from one of loss to one of recovery – from restoring historical landmarks to rebuilding churches and homes. Construction and restoration companies have already started mobilizing from around Tennessee and nearby states to help the tornado recovery effort.
Recovery after a natural disaster can be a difficult journey. As Tennessee begins the hard work of rebuilding, here are some things that property owners and construction companies alike should keep in mind for the road ahead.
Disaster Recovery Playbook
After any natural disaster – hurricanes, wildfires, tornados, or flooding – construction is always one of the first steps towards recovery. To help in post-disaster situations such as this, we wrote a guide to construction projects during disaster recovery. It contains information for property owners and contractors alike, giving everyone a better idea of what to expect when involved in rebuilding and recovery.
However, there are a few Tennessee specifics that should also be taken into consideration.
Recovery after Tennessee tornados
Working with insurance claims
Many homeowners’ insurance policies will cover wind-related damage caused by tornados. This can provide some comfort for Tennessee homeowners. But when insurance companies get involved, the process does become a bit more complicated.
Homeowners: What to know
For property owners, the first step is to contact your insurance provider as soon as possible. There may be certain time limits to make a claim, so the sooner the better. Review your policy to be sure you understand the claim process.
Also, it’s important to document as much as possible. Take pictures, write down the damages, and don’t throw away anything until your claim has been made. It’s also important that you don’t jump the gun on hiring a builder. Waiting can be hard – all you want to do is get to work. But many insurance policies requires that the insurance agency approves contractors beforehand.
Contractors: What to know
Keep in mind that insurance claims can take a long time, particularly when dealing with such a high volume of claims after a disaster. And when the insurance check ultimately arrives, it may not be enough to cover all the costs. Any additional repairs or change orders requested by the owner won’t be covered. Set reasonable expectations with the client from the outset, and be sure to get everything in writing.
Info for restoration contractors:
- What restoration companies need to know about getting paid
- A cash flow guide for restoration contractors
- Waiting for an insurance check? Protect your lien rights
Info for Tennessee roofing contractors:
If you are a roofing contractor being paid by an insurance company in Tennessee, you: (a) have the right to cancel within 3 days, and (b) must include specific consumer protection information. Learn more about the written statement that residential roofing service provider are required to make.
TN contractor licensing requirements
In Tennessee, practically all construction work requires some type of license, whether it be a contractor’s license, home improvement license, or any specialty trade license for the work being performed.
Homeowners: What to know
Unfortunately, in post-disaster situations like this, contractor fraud can be an issue. Before hiring any contractor, be sure to do some research. Read up on a contractor’s payment history and look for any red flags. You should also verify that they are indeed licensed and qualified to perform the repairs.
You can verify a Tennessee contractor license at www.verify.tn.gov.
Contractors: What to know
You need to be sure you have the correct license to do the work you’re performing, and also that you aren’t performing other work that may require a license, such as acting as a public adjuster. Furthermore, if performing work on a 1-4 family, owner-occupied, residential project, you must be licensed in Tennessee in order to file a mechanics lien in the state.
To find more information on the licensing requirements in Tennessee, you should head to the TN Department of Commerce & Insurance website.
All that being said, in circumstances such as this, the licensing requirements are typically relaxed. There is no reason to expect any different approach by Tennessee.
Tornado Recovery Tips: How contractors and owners to work together
Those suffering the effects of the tornado have a lot on their mind. And even so, you may not be familiar with the laws and regulations surrounding the construction process. As for contractors, working in another state can be challenging, as the protections and deadlines vary state to state. Here is are a few tips that can help everyone on the restoration project.
Send preliminary notice at the start of the project
Tennesse is a “notice state” when it comes to mechanics lien rights. A Notice to Owner is required from GC’s on residential projects before any work is actually performed. As for subcontractors and suppliers, they must send a Notice of Non-Payment within 90 days of the last day of the month labor or materials were furnished.
However, even if not required, or required well after the project begins, it’s a good idea to send one at the beginning of the project anyways. Preliminary notices promote visibility and transparency on the project. It’s good to know who’s working on the project, and what they are contributing. That way everyone can ensure they get paid.
Use conditional waivers with every invoice
Furthermore, it’s best practice to use conditional lien waivers. They are just as effective as unconditional waivers, but they don’t effectively waive any rights until payment is received. This helps expedite the process for owners and GCs, while ensuring the waiving party doesn’t give up any leverage until they’re paid.
Know the Tennessee mechanics lien laws
Tennessee mechanics lien laws offer protection to a broad array of construction project participants. So both owners and contractors should be aware of the existence and process of these rights. As mentioned above, notice is always required at some point. In addition to that, the deadlines to file a Tennessee mechanics liens can vary greatly, tend to get confusing, and can be altered by a Notice of Completion.
Familiarize yourself with the lien procedure beforehand, as they can be particularly tricky in the wake of a natural disaster.
Get everything in writing
This is important for all parties. In addition to documenting all of the damage, it’s important to get everything in writing, and keep a record of it. And I mean everything.
- the initial estimate,
- the contract itself, and
- any progress or daily reports throughout the project.
Proper documentation can keep everyone on the same page. This information can prove invaluable if a dispute arises.
Good news and other resources
Tennessee is truly a volunteer state
Many volunteer and fundraising efforts are already hard at work to help in the tornado recovery process and are still looking for more volunteers and donations. Here are a few places where you can help:
- Hands on Nashville
- Nashville Tornado Response Fund
- Community Foundation of Middle Tennessee Emergency Response Fund
- Samaritan’s Purse
Resources for displaced residents
For those residents who have been currently displaced from their homes, here are some shelters and short-term housing resources that may help:
Get legal help
If you have questions about how construction payments work during a recovery effort (or on any construction project), post it in our Expert Center. We have construction lawyers and other experts in Tennessee that are ready to help.
Wishing everyone affected by the Tennessee tornados a quick and safe recovery!