Source: https://www.zlien.com/mechanics-lien/tennessee-lien-law-faqs/
Timestamp: 2019-04-24 02:40:58+00:00

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It’s easy to file Tennessee mechanics liens with zlien, the web’s leading all-in-one mechanics lien compliance manager and security platform. Plus, the Levelset platform can help you prepare and file mechanics lien cancellations, preliminary notices, and more. To learn more about Tennessee’s mechanics lien law, read the information below.
Notice to Owner prior to commencing work.
A lien must be filed within 1 year of last furnishing labor and/or materials. The lien must be enforced during the same period. However, both periods may be shortened by actions of the property owner.
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Notice of Non-Payment must be provided to the owner within 90 days of last day of the month labor and materials provided. For example, if labor was provided on April 3, then notice is provided 90 days from April 30. Separate notices are required for each month unpaid services or materials are provided.
Generally, a lien must be filed within 90 days of the completion of the work or improvement, and enforced within 90 days of the lien's filing. Both periods may be shortened, however.
If supplying to the owner, the same notice requirements apply as for the prime contractor. Otherwise, the same notice requirements as for a subcontractor.
Eligibility to file a lien in Tennessee depends on the project type. On most projects (the exception being 1-4 unit residential owner-occupied buildings), pretty much everyone that participates in construction has lien rights. This includes contractors, subcontractors, suppliers, laborers, surveyors, architects, and engineers.
Where a residential owner-occupied building (1-4 units) is concerned, only the primary contractor, and/or other parties contracting directly with the owner, have lien rights. In the event that the owner is acting as the prime contractor on a single-family residence, the owner-prime’s suppliers, laborers, and 1st-tier subs have lien rights. For all residential projects, contractors are required to be licensed in order to file a lien.
Tennessee has interesting notice requirements.
General contractors are required to furnish a “Notice to Owner” prior to commencing work on the project. In the case of owner-occupied residential projects (of 1-4 units), the notice must actually be built into the contract between the general contractor and the owner.
Subcontractors, suppliers, and all other parties must deliver their notice within 90 days of the last day of each month in which labor and/or materials were provided but remain unpaid.
In all cases, notice is sent via certified mail return receipt requested to preserve rights. A lien is not valid without a timely notice.
The mechanics lien deadline rules in Tennessee are a bit convoluted, especially when you start to consider all of the possible circumstantial variations. Let’s start by looking at the basics.
Generally speaking, a general contractor has no technical requirement to record or file a mechanic’s lien statement in order to preserve his lien rights; he must merely file suit to enforce his lien within 1 year from the last date of furnishing labor and/or materials to the project. This is generally not a good idea, however, as the effectiveness of the lien can be cut-off by third parties. The customary way to avoid this is for a general contractor to record the mechanics lien statement as would any other potential lien claimant. To effectively secure lien rights the lien must be filed within 90 days from completion of the project. The same 90-day period (from completion or abandonment of the project) in which to file a mechanics lien applies to all others, as well.
– Residential (Notice of Completion Recorded and Served): Lien and response to Notice of Completion required within 10 days of date on which Notice of Completion filed.
– Residential (Notice of Completion NOT simultaneously recorded and served): Lien and response (if applicable) required within 90 days of actual completion of project.
– Commercial (Notice of Completion Recorded and Served): Lien and response to Notice of Completion required within 30 days of date on which Notice of Completion filed.
– Commercial (Notice of Completion NOT simultaneously recorded and served): Lien and response (if applicable) required within 90 days of actual completion of project.
– Residential: No mechanic’s liens allowed [unless the owner and general contractor are the same].
– Commercial (Notice of Completion Recorded and Served): Lien and response to Notice of Completion required within 30 days of the date on which Notice of Completion filed.
– Commercial (Notice of Completion NOT simultaneously recorded and served): Lien and response (if applicable) required within 90 days of actual completion of the project.
Don’t forget: all mechanics’ liens must be notarized in the state of Tennessee!
Mechanics liens of laborers have first priority in Tennessee as against competing mechanics liens. All other mechanic’s liens are of equal priority, and share pro rata in the proceeds of a sale of the property if the proceeds are insufficient to pay the liens in full.
Mechanics liens may have priority over a pre-existing mortgage, provided certain requirements are met. If the property is mortgaged, a mechanic’s lien may have priority if the contractor provides a written notice sent by certified or registered mail prior to beginning the project. The mortgagee must respond within 10 days (by certified or registered mail), otherwise, the mechanic’s lien has priority.
A mechanics lien in the state of Tennessee does not include interest, service charges, late fees, attorney fees, or any other amount that does not result in the actual improvement of a property. However, the cost of filing at the recorders office can be included in the lien amount.
Who Can File a Tennessee Mechanics Lien?
In Tennessee, the parties entitled to mechanics lien protection depend on the project type. For all projects except 1 to 4 unit residential owner-occupied buildings, the lien rights are expansive; contractors, subcontractors, laborers, equipment and material suppliers to any tier, surveyors, architects, and engineers all have lien rights.
On owner-occupied residential property of between 1 to 4 units, only the prime contractor (and/or those contracting directly with the owner) has lien rights. If the owner is acting as his own prime contractor on a project on a single-family residential property, laborers and suppliers contracting with the prime contractor and “1st tier subs” have lien rights.
When is the Deadline to File a Tennessee Mechanics Lien?
In Tennessee, a general contractor has no technical requirement to record or file a mechanics lien statement in order to preserve his lien rights; he must merely file suit to enforce his lien within 1 year from the last date of furnishing labor and/or materials to the project. However, this is generally not a good idea as the general contractor’s rights may be cut off by third parties prior to initiating the lawsuit if a lien statement (or the contract itself) is not recorded. The best and customary way for the general contractor to secure his lien rights is to record his Notice of Lien and Sworn Statement as would a remote contractor. This means the same 90-day rule applicable to remote contractors also applies to general contractors to protect lien rights against 3rd parties.
A party other than the general contractor who has lien rights must record their lien within 90 days after the completion or abandonment of the project in order to protect their rights as concerned to subsequent purchasers or encumbrances.
Note, however, that these deadlines may be shortened if a Notice of Completion has been filed and served.
Residential (Notice of Completion Recorded and Served): Lien and response to Notice of Completion required within 10 days of date on which Notice of Completion filed.
Residential (Notice of Completion NOT simultaneously recorded and served): Lien and response (if applicable) required within 90 days of actual completion of project.
Commercial (Notice of Completion Recorded and Served): Lien and response to Notice of Completion required within 30 days of date on which Notice of Completion filed.
Commercial (Notice of Completion NOT simultaneously recorded and served): Lien and response (if applicable) required within 90 days of actual completion of project.
Residential: No mechanics liens allowed.
Yes, notice is required in Tennessee. As well as recording the Notice of Lien and Sworn Statement with the Register of Deeds in the county in which the property is located, the lien must also be given to the property owner. This may be accomplished by registered or certified mail, return receipt requested.
Note that for remote contractors (those who do not have a contract with the owner), a copy of the lien must be served on the owner prior to the lien filing deadline.
Tennessee mechanics lien law states that “a lien arising under this chapter shall not include in the lien amount any interest, service charges, late fees, attorney fees, or other amounts to which the lienor may be entitled by contract or law that do not result in an improvement to the real property.” However, it is provided that “the recording party shall pay filing fees, and shall be provided a receipt for the filing fees, which amount shall be part of the lien amount.” So, the only extra amount provided for by the lien statutes in Tennessee is the cost of filing the lien at the recorder’s office.
When is the Deadline to Enforce a Tennessee Mechanics Lien, or, How Long is My Lien Effective?
In Tennessee, a contractor with a direct contract with the property owner must initiate a lawsuit within 1 year after the completion of the work. However, if the lien claimant is served with a written demand for enforcement of the lien by the property owner, the lien claimant must initiate the foreclosure action within 60 days of receipt of the written demand.
All lien claimants without a direct contract with the property owner must initiate an action to enforce their lien within 90 days of the lien’s filing. However, the period may be shortened to 60 days if the property owner serves the lien claimant a written demand for enforcement of the lien.
Will My Lien Tennessee Have Priority Over Pre-Existing Mortgages or Construction Loans?
It depends. In Tennessee, a mechanics lien may have priority over a mortgagee of the project if the lien claimant provided the mortgagee with written notice sent by certified or registered mail prior to the lien claimant’s first furnishing of labor and/or materials to the project, and the mortgagee either consents or does not object within 10 days after receipt of the notice. The mortgagee’s objection must be by certified or registered mail. If this notice is not sent, and/or the mortgagee properly objects, the mechanics lien will not have priority over the mortgage.
As to competing mechanics liens, all mechanics liens, with the exception of liens of laborers, are of equal priority and would share pro-rata in the proceeds of a sale of the property if the proceeds are not enough to pay all liens in full. The liens of laborers have priority over other mechanics liens.
Must the Tennessee Lien Include a Legal Property Description?
Must the Tennessee Lien be Notarized?
Yes. A mechanics lien in Tennessee must be notarized in order to be valid.
Can I File a Tennessee Lien if I'm Unlicensed?
It depends. For projects involving a 1 to 4 family owner-occupied residential building, home improvement contractors are required to be licensed, and may not file a valid mechanics lien unless they are so licensed. For all other projects, there is no specific licensing requirement. However, it is never advisable to perform work that requires a license if unlicensed.
Can I File a Tennessee Lien on a Condominium Project?
Yes. A mechanics lien may be filed against a condominium project in Tennessee, to the extent you are a party otherwise allowed to file a mechanics lien.
Who Cancels the Tennessee Lien if/when I get Paid?
Tennessee lien law provides that when a mechanics lien is forfeited, expired, or satisfied, the lien claimant must file a Release of Lien document with the Register of Deeds in the county in which the property is located. Failure to do so within 30 days after receipt of a written demand of such release will result in the lien claimant being held liable for the damages and costs arising therefrom, including reasonable attorney’s fees.
Tennessee does not have statutory lien waiver forms; therefore, you can use any lien waiver form. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers.
Also, Tennessee state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in contract.
To learn more about lien waivers, see our Tennessee Lien Waiver FAQs and Resources.
Generally, yes. Prime contractors, subcontractors, laborers, and suppliers are all required to give preliminary notice. On a project consisting of 1 to 4 family residential owner-occupied buildings, “notice” must also be contained within the contract itself between the home improvement general contractor and the owner-occupier.
Prime Contractor: Must deliver preliminary notice to the property owner, via certified or registered mail, prior to commencement of work or entering into the contract.
All Other Parties: Preliminary notice must be received by the property owner within 90 days of the last day of each month in which labor and/or materials were furnished.
General Contractor: The general contractor’s notice to owner is required to preserve the general contractor’s lien rights. Failure to deliver the notice is fatal the mechanics lien claim.
All Other Parties: While failure to send preliminary notice timely may not extinguish all lien rights, a mechanics lien would only be valid for the amounts timely noticed. This is important as a potential lien claimant may be required to send several notices if amounts have been unpaid in multiple months.
Preliminary notice by all potential lien claimants may be served by certified mail, return receipt requested.
On a project consisting of 1 to 4 family residential owner-occupied buildings, additional required “notice” must be contained within the contract itself between the home improvement general contractor and the owner-occupier.
Do I Have to Send the Tennessee Preliminary Notice to Someone Other than the Owner?
The general contractor’s preliminary notice must only be served on the property owner.
All other lien claimants must provide preliminary notice to both the property owner and the general contractor.
Note also that notice may be provided to the construction lender prior to work to attempt to get the mechanics lien priority over the construction mortgage.
Is the Tennessee Preliminary Notice Requirement met when sent or delivered?
In Tennessee, preliminary notice is considered delivered when sent by certified mail, return receipt requested.
The provisions of the Tennessee mechanics lien statute that permit the filing of mechanics liens and materialman’s liens on construction projects can be found in Tennessee’s Mechanics’ Lien Law, T.C.A. § 66-11-101 et. seq. The full text of the Tennessee Construction Lien Law is provided below, and has been updated as of 2016.
Use of the proceeds as enumerated in §§ 66-11-137–66-11-139 for any purpose other than either payment pursuant to written agreement between the parties or in accordance with the allocation of costs and profits under generally accepted accounting principles for construction projects shall be prima facie evidence of intent to defraud. Use of a single business bank account for multiple projects shall not be evidence of intent to defraud.
(b)(1) When a prime contractor or remote contractor has provided a valid payment bond for the benefit of potential lien claimants, a copy of that bond may be recorded, in lieu of the recording of another bond, to discharge a lien asserted by the lien claimants. A copy of the bond may be recorded with the register of deeds in lieu of the bond provided in subsection (a) to discharge such a lien. Upon recording with the register of deeds, the contractor or owner shall notify the surety executing the bond, and the lien on the property shall be discharged. The person asserting the lien may make the obligors on the bond parties to any action to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond.
As used in this part, unless the context or subject matter indicates another meaning, the words and phrases defined in § 66-11-101, as amended and as may from time to time be amended, have the same meaning as set out in that section and such § 66-11-101 as amended and as may from time to time be amended is incorporated in this part by reference.
Delivered this ____________________ day of _____, 20_____, by ___________________, Contractor.
(3) Except as modified by § 66-11-146, these liens can be enforced even though the contractor has been paid in full if the contractor has not paid the persons who furnished the labor or materials for the improvement.
§ 66-11-204. Rejection of Contracts.
An owner may reject a contract by notifying the contractor by written notice by registered mail within three (3) days after receipt of the notice required in § 66-11-203; otherwise the contract is affirmed.
§ 66-11-205. Contractor's Notice to Owner That All Liens Have Been Paid -- Guarantee -- Form.
§ 66-11-206. Noncompliance by contractor -- Misdemeanor -- Penalties -- Owner remedies.
(a) In the event that any materialmen’s liens or mechanics’ liens are perfected, filed or enforced under the provisions of part 1 of this chapter against any real estate for transactions covered under §§ 66-11-203 and 66-11-205 and the contractor has not complied with §§ 66-11-203 and 66-11-205 or if having technically complied with the provisions of this part has willfully, knowingly and unlawfully falsified any statements or fraudulently obtained any permission, the contractor commits a Class B misdemeanor.
(b) Nothing contained in this part shall abrogate the right of any person who is materially or personally damaged or injured by any contract covered by this part to seek such person’s remedies against the responsible person in the courts.
(c) Noncompliance with §§ 66-11-203 and 66-11-205 shall in no way affect the lien rights of a contractor, actually performing the work and having a contract directly with an owner, or the contractor’s agent, to enforce a lien as provided in § 66-11-102.
§ 66-11-207. Effect on other laws.
This part shall not operate to repeal or affect any of the laws of the state relating to mechanics’ and materialmen’s liens, specifically part 1 of this chapter, but shall be held and construed as ancillary and supplemental thereto..
(a) Except as provided in subsection (b), a provision in any contract, subcontract or purchase order for the improvement of real property in this state is void and against public policy if it makes the contract, subcontract or purchase order subject to the substantive laws of another state or mandates that the exclusive forum for any litigation, arbitration or other dispute resolution process is located in another state.
(b) The prohibition of subsection (a) shall not apply to any contract, subcontract or purchase order for the improvement of real property which is located partially in Tennessee and partially in another state or states. Venue in a dispute over such contract may be in any state in which part of the property is located.

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