Understanding Tennessee’s Contractors Right to Cure Statute

Construction projects can be complex, and disputes between property owners and contractors are not uncommon. Tennessee has enacted laws to streamline the resolution process in these instances while protecting the interests of both parties.

One of these laws is Tennessee’s “Right to Cure” statute, outlined under Tennessee Code Annotated § 66-36-101 et seq. This statute provides a framework for resolving disputes involving alleged construction defects without immediately resorting to litigation.

Below, we’ll break down the key elements of this law, including the types of projects it covers, notification requirements, and consequences for failing to comply.

What is Tennessee’s Right to Cure Statute?

The Right to Cure statute is designed to encourage resolution of construction disputes before they escalate to costly and time-consuming litigation. Specifically, it applies to claims involving alleged defects in construction, repair, or remodeling of residential property. By allowing contractors the opportunity to address complaints upfront, the law aims to save both parties time and expense.

The statute mandates specific steps that property owners and contractors must follow when pursuing or defending against claims of defective construction. If either party fails to adhere to these requirements, there can be legal repercussions.

Types of Projects Covered by the Statute

Tennessee’s Right to Cure law applies primarily to residential construction projects. This includes the construction of new homes, home renovations, and significant repairs. The statute does not typically apply to commercial or industrial construction projects, nor does it cover projects that fall outside the scope of residential property improvements.

Notice Requirements for Property Owners

Before filing a lawsuit against a contractor for alleged construction defects, the property owner is legally required to provide the contractor with written notice. This notice must:

1. Be given at least 90 days before filing a lawsuit.
2. Detail each specific defect or complaint the property owner is claiming.
3. Include any potentially related damages the owner has identified.

The purpose of the written notice is to give the contractor a fair opportunity to address and resolve the issue without litigation.

Does the Contractor Have the Right to Inspect?

Yes, under the statute, contractors are allowed to inspect the property after receiving a notice of alleged defects. This right ensures that the contractor can independently assess the issues and determine whether they are responsible for the claimed defects. Contractors can also bring in professionals or subcontractors to assist in the inspection if necessary.

Timeframe for the Contractor to Respond

After receiving the owner’s notice, the contractor has 30 days to respond. During this window, the contractor has the following options:

1. Offer to fix the defect at no cost to the owner.
2. Offer a monetary settlement to resolve the issue.
3. Propose a combination of repairs and financial compensation.
4. Deny responsibility for the alleged defect and provide reasons for this denial.

The contractor’s response must be in writing and sent to the property owner within the 30-day period. If the contractor fails to respond within the allotted time, the owner may proceed with filing a lawsuit.

Consequences for Not Providing Notice Before Filing a Lawsuit

If a property owner fails to provide the required notice to the contractor before filing a lawsuit, they may face significant consequences in court. Tennessee courts may dismiss the lawsuit entirely, forcing the owner to restart the dispute resolution process by issuing the appropriate notice. This can result in delays and additional legal costs for the owner.

The courts may also disallow the recovery of certain damages or limit the owner’s ability to claim attorney’s fees. Essentially, skipping the pre-lawsuit notice step can severely hinder the owner’s ability to recover compensation in the event of a legitimate defect claim.

Penalties for Owners Who Reject a Contractor’s Offer

If a contractor offers a reasonable solution during the response process, and the property owner rejects it without valid justification, this decision could have consequences in litigation. Specifically:

• The court may limit the property owner’s damages if it determines that the contractor’s offer was sufficient to address the defect.
• The statute allows Tennessee courts to consider whether either party acted unreasonably in its findings. If the owner unreasonably rejects a fair offer, this could negatively impact their case.
• The court may also deny attorney’s fees or other costs that the owner might otherwise be entitled to recover.

This aspect of the Right to Cure statute is intended to prevent property owners from pursuing unnecessary lawsuits and to encourage reasonable negotiation between the parties.

Final Thoughts

Tennessee’s Contractors Right to Cure statute is an essential piece of legislation for both contractors and property owners in the residential construction market. By requiring specific steps before litigation, the law promotes transparency and cooperative problem-solving.

For contractors, the right to inspect and respond allows them to address legitimate issues proactively. For property owners, the notice requirements ensure that their complaints are taken seriously while discouraging baseless litigation.

For those involved in residential construction disputes, it’s crucial to understand the rules under Tennessee Code Annotated § 66-36-101 et seq. Ignoring the statute’s requirements can lead to costly delays, dismissed lawsuits, or restricted damage awards. By following the process, both parties have a better chance of reaching a fair and efficient resolution.