Prohibited Acts

  1. Law
  2. Tennessee Code
  3. Professions, Businesses and Trades
  4. Contractors and Contracting
  5. Home Improvement Contractors
  6. Prohibited Acts

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The following acts are prohibited:

  1. Abandonment or willful failure to perform, without justification, any home improvement contract or project engaged in or undertaken by a contractor or willful deviation from or disregard of plans or specifications in any material respect without the consent of the owners;
  2. Making any substantial misrepresentation in the procurement of a home improvement contract or making any false promise of character likely to influence, persuade or induce;
  3. Any fraud in the execution of, or in the material alteration of, any contract, mortgage, promissory note or other document incident to a home improvement transaction;
  4. Preparing or accepting any mortgage, promissory note or other evidence of indebtedness upon the obligations of a home improvement transaction with knowledge that it recites a greater monetary obligation than the agreed consideration for the home improvement work;
  5. Willful or deliberate disregard and violation of the building, sanitary and health laws of this state or of any political subdivision of this state or of the safety, labor, or workers' compensation insurance laws of this state;
  6. Misrepresentation of a material fact by an applicant in obtaining or attempting to obtain a license;
  7. Failure to notify the board of any change of control in ownership, management or business name or location;
  8. Conducting a home improvement business in any name other than the one in which the contractor is licensed;
  9. Advertising in any manner that a licensee is licensed pursuant to this part, unless the advertisement includes an accurate reference to the appropriate current license number consisting of and limited to a form as prescribed by the board;
  10. Failure to comply with any order, demand or requirement lawfully made by the board pursuant to and within the authority of this part;
  11. The demand for or the receipt of any payments prior to the signing of a home improvement contract;
  12. Receipt at or before the time of execution of a contract of a deposit of more than one third (1/3) of the contract price, unless:
    1. The home improvement contract allows for the home improvement contractor to furnish a performance and payment bond, lien and completion bond or bond equivalent covering full performance and completion of the home improvement contract and the bond is furnished by the home improvement contractor; provided, that the amount of the bond or bond equivalent is not less than one percent (1%) of the net sales of the home improvement contractor's home improvement business with respect to the home improvement labor to be determined on an annual basis at January 1 of each year; or
    2. After being fully advised by the contractor in writing of the right to withhold final payment up to one hundred percent (100%) of payment before completion of the project, the owner elects to make final payment to the home improvement contractor for the project before completion for the owner's convenience or the parties agree on a schedule of payments to be made before, during and after completion of the project;
  13. Failure to obtain the necessary permits as required by any local jurisdiction;
  14. Making false or deceptive representations in any advertisement or solicitation for services or products that the services or products have sponsorship, approval, affiliation or connection with a bank, savings and loan association, savings bank or subsidiary or affiliate of a bank, savings and loan association or savings bank;
  15. Using the name or logo of any bank, savings and loan association, savings bank or subsidiary or affiliate of a bank, savings and loan association or savings bank, without the express written consent of the person whose name is used; and
      1. Having a controlling ownership interest in the lender providing a mortgage loan for home improvement for the work being performed by the home improvement contractor;
      2. Accepting anything of value for the referral of a borrower to the lender; or
      3. Being a cosigner or acting as a guarantor for a mortgage loan for home improvement;
    2. As used in subdivision (16)(A), “mortgage loan for home improvement” shall have the same meaning as defined in § 45-13-403(c).


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