The Law Office of Timothy H. Nichols, PLLCNashville Construction Contract Disputes Attorney | Murfreesboro Real Estate Lawyer | Business Litigation Brentwood Franklin TN2026-08-10T09:32:15Zhttps://www.tnicholslaw.com/feed/atom/WordPressOn Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[How Tennessee’s prompt payment laws protect contractors]]>https://www.tnicholslaw.com/?p=481372026-08-10T09:32:15Z2026-08-10T09:32:15ZWhat Tennessee's Prompt Pay Act requires
The Prompt Pay Act sets specific deadlines for payment at every level of a construction project. On private projects, a property owner must pay you within 30 days of receiving a proper invoice. Once you receive payment as a general contractor, you must pay subcontractors within 10 days.
These deadlines apply regardless of whether the contract addresses payment timing and cannot simply be contracted away. Retainage is also capped at 5% of the total contract value, and pay-if-paid clauses require explicit and unambiguous language to be enforceable under Tennessee law.
Public projects operate under stricter timelines, with shorter windows for payment at each tier of the contracting chain.
What happens when payment is late
When a party misses the Prompt Pay Act's deadlines without a valid legal reason, mandatory interest begins to accrue on the unpaid balance. This is not discretionary. The law imposes the interest penalty automatically, giving you a concrete remedy when the other party wrongfully holds back payment.
For larger projects, the stakes are even higher. Parties who wrongfully fail to deposit retained funds into an interest-bearing escrow account face statutory civil damages of $300 per day and potential Class A misdemeanor criminal fines of $3,000 per day.
What to do when payment is wrongfully withheld
If you do not receive the payment on time, documenting your invoices, communications and the timeline of payment requests is an important first step. Prompt action matters because construction payment disputes often intersect with lien rights, which have their own strict deadlines.
A construction attorney in Tennessee can help you evaluate whether the Prompt Pay Act applies to your situation, calculate any interest penalties owed, and determine whether additional remedies such as a mechanic's lien or bond claim are available to you.
]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[A defect-related breach of contract can reduce a project’s value]]>https://www.tnicholslaw.com/?p=481352026-07-27T08:53:57Z2026-07-27T08:53:57ZA breach of contract claim is a serious allegation when it comes to construction projects. In some cases, such as when there are construction defects, it can have a dramatic impact on the value of the property, which could reduce the cost for the property owner.
For instance, imagine that a general contractor is hired to build a condominium for $200,000. They hire subcontractors to do some of the work. These subcontractors make mistakes, leading to significant defects in the property. This violates the contract because the finished product is not of the quality that the client expected.Because of these defects, the market value of the condominium drops by $50,000. As such, a customer may only have to pay the remaining $150,000. They can make a breach of contract claim so that they do not overpay for a property that immediately loses value.
When disputes arise
Naturally, a breach of contract claim can lead to many different disputes. In the aforementioned example, it could revolve around liability. Is the general contractor responsible, or is the subcontractor responsible?Disputes could also relate to the value of the property. Perhaps the contractor admits that there are defects, but also says that they only really reduced the value of that property by $10,000. They are willing to reduce the final price for the customer, but they simply think that taking $50,000 off of that price is too much for what they consider a minor error.These types of disputes can be very complex for parties on both sides. It can often help to work with an experienced construction attorney to find a resolution.
]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[Why you should not draft a contract on your own]]>https://www.tnicholslaw.com/?p=481312026-07-16T12:08:58Z2026-07-16T12:08:58ZConstruction projects in Tennessee run on contracts. These documents control your money, your timeline and your legal rights. Yet many contractors and property owners still write their own agreements or copy a generic template from the internet. As a result, this habit creates serious financial and legal risks for both contractors and property owners.
Tennessee construction law has specific rules
Tennessee imposes unique requirements on construction contracts. For instance, the state's prompt payment act sets strict deadlines for payment and retainage. In addition, Tennessee's mechanic's lien law demands precise notice language and filing timelines. If you miss these deadlines and notice rules, or break the contract rules for home improvement jobs, you could lose your right to payment or face legal penalties. Therefore, a contract that skips these details can strip you of your right to file a lien or collect payment on time. If you miss these deadlines and notice rules, or break the contract rules for home improvement jobs, you could lose your right to payment or face legal penalties.
Vague terms cause expensive disputes
Homemade contracts frequently use loose language about scope, change orders and completion dates. When a dispute erupts, courts interpret ambiguous terms against the party who drafted them. Therefore, if you wrote the contract, that rule works against you, not for you. On the other hand, clear, specific language protects both sides and prevents costly litigation.
Missing clauses leave you exposed
A well-drafted construction contract includes indemnification clauses, insurance requirements, dispute resolution procedures and force majeure provisions. However, many self-drafted contracts leave these sections out completely. Without them, you carry liability you never intended to accept. You also lose the chance to resolve disputes through arbitration or mediation instead of expensive court battles.
Licensing and permit issues create legal traps
Tennessee requires contractors to hold proper licenses for projects above certain dollar thresholds. If a contract ignores licensing status, it can become unenforceable. In fact, courts have denied payment claims to unlicensed contractors, even when the work itself met every standard. For this reason, a knowledgeable drafter checks these details before you sign anything.
An attorney protects your interests
A construction attorney understands Tennessee's statutes, case law and industry standards. Because of this expertise, they tailor contracts to your specific project instead of relying on boilerplate language. Ultimately, this investment costs far less than the legal fees and lost payments that follow a poorly written contract.Don't gamble your project on a document you found online. Instead, talk to a Tennessee construction attorney before you sign.]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[Can you fight an eminent domain order?]]>https://www.tnicholslaw.com/?p=481342026-07-15T07:28:54Z2026-07-15T07:28:54Zeminent domain exists to allow projects that are truly in the public interest to go ahead. For example, roads, hospitals or a development the area needs. However, some individuals and companies try to use it for projects that are more in their personal interest than the public's. Highlighting the lack of need for the project can sometimes lead to it being canceled altogether.
Challenging the need for your land
In many cases, the project itself is valid, but the choice of land to be taken is challengeable. Companies may propose a route that saves them money over one that reduces the impact on landowners. Rerouting or narrowing the scope of land demanded to only that which is really needed is an avenue that property owners sometimes pursue with success.
Challenging the price offered
Maybe opposing the project or the need for your piece of real estate is not likely to work. Or maybe you are not against selling up for the right price. In these cases, you may challenge the price you are being offered on the grounds that it is not fair compensation.
Eminent domains often affect more than one party, and joining with others can help strengthen your case. Whether you are one person or a multitude, experienced legal guidance can help you assess your options and decide what steps to take next.]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[Does your new property have an easement?]]>https://www.tnicholslaw.com/?p=481292026-07-02T12:53:47Z2026-07-02T12:53:46ZWhen you purchase real estate, it is important to know if there is already an existing easement. With an easement in gross, you may be able to cancel that easement or negotiate with the other property owner about whether or not it will be upheld. With an easement appurtenant, however, you often have an obligation to uphold it because it is part of the property that you purchased.
Easements can sometimes lead to real estate disputes. They should be disclosed prior to a sale, for instance, and a dispute could occur if a buyer claims they were not told that the easement existed in the first place. They can also cause issues after the sale, such as when a new owner tries to eliminate an easement and the other party claims they do not have the right to do so.
What rights go along with an easement?
Typically, an easement just gives another person the legal ability to access the land, often to use it for a specific purpose. But they are not allowed to permanently occupy that land, alter the land in a significant way or prevent the property owner themselves from using the easement.For example, if one property does not have a driveway that connects to the main road, that property owner may have an easement on an adjacent property, allowing them to cross it to reach their own land. But they are not allowed to put up gates that prevent others from accessing the land, and they could not build permanent structures, like a garage. All they can do is use the shared driveway responsibly to gain the access that they need.In some cases, disputes over easements revolve around improper use, and these types of real estate conflicts can grow very complicated. Those involved need to know what legal options they have and how the law applies in their unique case.]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[What is scope creep?]]>https://www.tnicholslaw.com/?p=481252026-06-18T11:35:55Z2026-06-18T11:35:55ZIn the construction industry, scope creep is an issue where the project continues to grow and become more complicated. It often relates to budgets and deadlines. A construction company may start missing key deadlines, or the budget may grow out of control due to changes in the project.In some cases, this happens because there is no detailed plan to begin with or because there are unexpected changes once the project begins. Say that a construction company is hired to renovate a property, and it seems like a fairly straightforward job. But once they begin the demolition process, they discover that there are structural issues and old water damage. Suddenly, significant structural repairs become necessary, and the budget for the project spirals out of control.
Miscommunication can lead to legal issues
Communication problems can also lead to scope creep. Sometimes it is miscommunication, where the client and the construction company owner are never on the same page about what either one expects. They both feel like they are working on fundamentally different projects.In some cases, clients also do not understand how their requests are changing the project. Maybe the property owner is very hands-on and keeps requesting revisions or alterations. But then, when they get the bill, they are shocked by how much the project costs and how it appears to have gone over budget. Or all of the changes add a significant amount of additional work, so the project is not done by the deadline.In cases like these, disputes can sometimes occur, potentially leading to litigation between construction companies, subcontractors, clients and other entities involved in the project. For those who find themselves in this position, it is important to know what legal steps to take.]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[What you need to know about enforcing a construction lien]]>https://www.tnicholslaw.com/?p=481242026-06-08T10:45:04Z2026-06-08T10:45:04ZGetting paid on a construction project is not always as straightforward as completing the work and sending an invoice. Payment disputes can escalate quickly, especially when funds are withheld without clear justification or when project owners and contractors disagree on the scope or quality of work performed.
In such situations, filing a construction lien can become one of the most powerful tools available to protect your right to payment. However, enforcement isn’t automatic. A lien that sits without action expires, alongside your right to payment.
How enforcement works
Once filed, a lien places a legal cloud on the property title, but that alone does not automatically result in payment. To recover what you are owed, you must take additional legal action by filing a lawsuit to enforce the lien, usually in the county where the property is located. In essence, you are asking the court to recognize your claim and, if necessary, authorize the sale of the property to satisfy the unpaid debt. The process is governed by strict deadlines and legal procedures that you must adhere to. Otherwise, you risk losing the ability to enforce your lien rights.
Don’t let a valid claim die on a technicality
Construction lien law rewards those who act quickly and precisely. The contractors who lose enforceable claims don't usually lose them because their work was defective; they lose them because a deadline slipped or a procedural step was missed. It’s also worth noting that many lien disputes are resolved before reaching full enforcement. However, it is important to be prepared for escalation if necessary. If you've filed a lien and the payment dispute isn't resolving, reach out for urgent legal guidance to understand your options and take informed action to protect your interests.
]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[Are triple-net leases worth considering in Tennessee?]]>https://www.tnicholslaw.com/?p=481212026-05-27T12:39:32Z2026-05-27T12:39:32ZStructure of a triple-net lease
A triple-net lease is a commercial lease agreement in which the tenant pays base rent plus three additional categories of property expenses: property taxes, building insurance and maintenance costs. Terms tend to span 10 to 15 years or more, which makes it important to understand the full scope of what you are agreeing to upfront.
Potential upsides for tenants
While an NNN lease comes with significant responsibilities, it has the following advantages:
Lower base rent: Because you cover taxes, insurance and maintenance separately, the base rent is often lower than a gross lease would require.
Greater operational control: You have more direct say in how the property is maintained, which lets you shape the space around your business needs.
Possible tax deductions: The taxes, insurance and maintenance costs you pay may qualify as deductible business expenses, though a tax professional can advise on your specific situation.
The value of these advantages often depends on the terms you negotiated at the start. Clear provisions and renewal options can help you benefit from an NNN structure while limiting your exposure if costs rise.
Possible risks in the arrangement
Triple-net leases also carry risks such as:
Rising costs: Taxes can increase, insurance can climb and major repairs can arise without warning.
Long commitment: NNN leases typically lock you in for a decade or more, which limits your options if your needs or market conditions shift.
Significant maintenance burden: You are responsible for general upkeep and mechanical repairs, though the landlord typically remains responsible for major structural components.
To protect your bottom line, consider negotiating expense caps or strictly defining what qualifies as a standard "repair" versus a structural "capital improvement" before signing.
Tennessee-specific considerations in your agreement
The state does not have a dedicated commercial landlord-tenant statute that governs NNN leases the way residential tenancy law covers residential leases. The contract itself largely shapes commercial lease terms.
This contract-driven framework places a premium on precise drafting. If your lease does not cap property tax pass-throughs, clearly define maintenance duties or address what happens after a casualty, you may face costs you did not expect when you signed.]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[Latent construction defects can complicate cases]]>https://www.tnicholslaw.com/?p=481222026-05-21T13:14:53Z2026-05-21T13:14:53ZPatent construction defects are fairly obvious from the very beginning, which can make for a straightforward case if there is a dispute. A homeowner may enter their new property and realize that the construction company put in the wrong type of flooring material, for example. They instantly know there is a problem with how the job was done and they understand who is responsible.
But latent construction defects often take time to discover because they are hidden, or at least less obvious than patent defects. This can often complicate the case in a number of ways, making it more difficult to determine who was responsible.
When did the defect begin?
For one thing, there may be questions over when the defect was actually created. Say that a homeowner discovers that pipes in their basement have been leaking, causing serious water damage and the development of rot or mold. But it is a slow leak, so it may have taken years for them to even find the issue.Were the pipes installed correctly and then damaged after the fact? Has the homeowner done any personal renovations? Have they hired other contractors, such as a local plumbing company, that could have caused the damage? Or was there an inherent defect from the time that the house was initially built?It is easy to see from the water damage that there is clearly an issue with the property that has had an impact on its value. It will also be expensive to fix. But determining exactly who is responsible for that damage can be much more complicated in these cases, which often begin years after the initial construction work has been completed.Because of these complexities and the questions involved, it is very important for all parties to understand exactly what legal steps to take.
]]>On Behalf of The Law Office of Timothy H. Nichols, PLLC<![CDATA[Change orders in construction projects]]>https://www.tnicholslaw.com/?p=481172026-05-08T06:09:32Z2026-05-08T06:09:05ZChange orders are extremely common. A significant percentage of construction projects diverge from the original scope. Work can be added, reduced or substituted.For example, unforeseen site conditions can call for additional excavation. Or a project owner can remove components of the project, such as the construction of a parking garage, or want materials/equipment to be replaced, such as expensive tiles with cost-effective ones orcurtain wall glazing with precast panels to speed up installation.A change order usually results in increased cost, additional time and a lower contract price. Thus, it should be implemented appropriately, since it alters an existing legally binding contract. Here is how to do this:
Have a written and signed change order
It’s best practice for a change order to be written and signed by the involved parties. This formal amendment should include:
Information of the contract being altered (date, project title and contract number) to link the two documents
Detailed descriptions of the change
Added costs
Changes to the completion date
The updated contract value
A contractor or subcontractor agreeing to make changes without a legally binding agreement can be risky.
Avoid disputes as much as possible
A change order can lead to disputes if it’s not handled carefully. Involved parties should try as much as possible to avoid them. Many disputes stem from poor documentation, differences over valuation of the extra work, verbal authorization of extra work and slow approval processes that cause even more delay.Having numerous change orders in a single project can also increase the likelihood of disputes, especially when the aforementioned factors are at play. Change orders are generally considered inevitable in construction projects. However, they need to be approached from the right angle to be effective. Get more information to take the right steps when implementing a change order. ]]>