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Tennessee Construction Law Blog

The right language helps to prevent contract disputes

There is no one size fits all approach to construction, whether it’s a home, a retail center or an office building. Similarly, construction contracts need to vary depending on the conditions and environment. What works for one project may not fit the next, even when there are similarities in materials, purpose and location.

Construction is a business like any other, meaning that finances, investment and growth need to be central to your decision-making. While most contracts cover basics like cost, timeline and payment adequately, the language used in those sections can be a boon or a burden when issues arise. Universal, cookie-cutter contracts don’t offer much leverage or wiggle room when conditions change. Not many projects complete without a few adjustments along the way.

Options for resolving a construction dispute

Construction disputes can pop up for a number of reasons and it is always important for the parties to know how to respond and what to expect when they do. To help avoid future construction disputes, the parties can address potential concerns early on. It is important for the parties to thoroughly negotiate and understand their contract and make sure extensive planning is done beforehand; ensure pre-construction work is conducted; ensure schedules are realistic; and document changes or challenges associated with the construction project. In addition, there are other additional measures the parties can take as well to try to avoid problems down the road.

In general, construction disputes can arise because or a poor understanding of the contract; delays in violation of the contract; a failure to properly administer the contract; failure to perform the contract or complete the work or failure to complete the work in a timely fashion; if the work is not performed up to reasonable workmanlike standards; and in other circumstances as well.

What is the importance of zoning laws?

Zoning laws are important to be familiar with and to understand because they can have a dramatic impact on the use of property. You may have many questions about zoning laws and how they work. Zoning laws cover everything ranging from specific requirements as to the types of buildings allowed on a piece of property to size and height limits for the buildings; the number of rooms for the buildings on the piece of property; restrictions on additional buildings and building setbacks from streets and other boundaries; and the location of utility lines.

In its most basic sense, zoning laws regulate the use and development of real estate. Zoning laws are considered land-use regulations and, as such, have a significant impact on an owner's use and development of their property. Zoning laws generally divide property into categories to provide uniformity, with some exceptions such as mixed-use projects, in certain areas. The most basic categories include residential, commercial and industrial zones.

Options when construction work performed goes unpaid

When a materials supplier has performed all of their work, or provided materials and equipment for a job, it is important for them to be paid for that work. When they go unpaid, there are important legal resources available to them to enforce their payment rights for the job. Because there are many parties involved in the completion of a construction project, it is essential for materials suppliers and subcontractors to be familiar with their payment rights in nonpayment situations.

When project owners and general contractors have failed to pay a materials supplier or subcontractor, materials suppliers and subcontractors may have the right to file a lien on the property. A materialmens' lien can help those parties recover payment for the hard work they have performed. A dispute over payment can be a significant concern for the materials supplier or subcontractor and can have a significant impact on their business and livelihood if they go unpaid.

What different types of constructions defects are there?

Construction defects can be a serious financial concern and may cause other problems as well, which is why it is helpful to understand what the term refers to and what the available remedies for construction defects are. Construction defects refer to deficiencies related to: design; planning; supervision; inspection; construction; or management of construction of a building. When the structure is not constructed in a reasonably workmanlike manner, or fails to perform in a manner reasonably expected by the buyer, a claim for construction defects may exist.

Construction defects can be costly and can include problems such as: the structural integrity of the building; expansive soil problems; water intrusion which can result in mold; thermal and moisture protection issues; mechanical and electrical concerns; problems with the doors, windows or glass; or issues and concerns with finishes, among other possible concerns. In general, the courts recognize four categories of construction defects, including: design defects; material defects; construction defects; and subsurface defects.

Common new construction defects to watch out for

Given the cost of building or remodeling a structure, it is a reasonable expectation that the finished product will be made of quality materials and assembled correctly. But sadly, that is not always the case. Construction defects are one of the main causes of disputes and litigation in the construction industry. Defects can range from mild aesthetics to severe problems that threaten structural integrity.


How can you obtain a materialmen's lien in Tennessee?

In Tennessee, in order to obtain a materialmen's lien, often referred to as a mechanic's lien, specific actions must have taken, or are currently taking place. First, the party making the claim must have performed an action that contributed to the improvement of the property. This means that he or she must have done something that created a permanent change. The obvious ideas of this would be demolition, or construction of new rooms or buildings. However, it can also include changes to landscaping.

In addition, a person or business who not only performed the action but supplied the materials to perform the action can also claim a lien against the property to ensure payment for those materials.

Residential real estate title issue resolution

Real estate title issues can creep up at the most unexpected times. It is a home buyer's responsibility to take necessary steps in insuring that a home has a clean title. In the excitement of a new home purchase, these steps can be overlooked and end up causing major problems.

There are several types of common title problems. First, there can be recorded liens against a property filed by creditors of the current owners. If these are not taken care of prior to finalizing a sale, they become the problem of a new owner, and can be very costly.

Bankruptcy in commercial leases

For owners of commercial retail property it can be frustrating when tenants abruptly close up shop and file for bankruptcy. Many times these situations result in months of lost rental income for the property owner. If the tenant files a strait bankruptcy such as Chapter 7, a rental space cannot be leased to a new owner until a bankruptcy discharge is issued. This can take three to four months in a simple bankruptcy. If additional issues or objections arise, the waiting period can be even longer. When a tenant files a reorganization plan such as Chapter 11 bankruptcy, and chooses to assume a lease, it can still take months before plan payments begin disbursement and monthly rents begin flowing again.

As a commercial property owner, this is one of the reasons to ensure that you find and retain the best tenants possible. In addition, upon receiving notification that a tenant has filed bankruptcy, it is in the property owner's best interest to retain a knowledgeable attorney early in the process. He or she can assist and offer advice in the assumption or rejection of leases, filing a Motion to Terminate an Automatic Stay, or negotiating new contract terms.

How to avoid buying a “lemon” house

When you buy a car, there are “lemon laws” that protect customers from fraudulent sales. When you buy a house, Tennessee’s real estate laws also help you understand what you’re signing up to own. Purchasing a home is one of the biggest financial decisions you make in life.

Tennessee requires house sellers to notify you of known problems with a residential property disclosure form. This includes whether the home was built to code, existing plumbing or electrical issues and any infestations. However, the sellers might not know about every problem with the property. They could even illegally hide certain flaws in order to make a sale.

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