Tennessee State Lien Law Summary

ON ALL JOBS OTHER THAN 1-4 FAMILY RESIDENTIAL, OWNER-OCCUPIED BUILDINGS:

(Does not include projects pertaining to the development of a lease pertaining to oil, gas or other minerals.) Con­trac­tor, laborers, and all sup­pliers of mate­rial, ser­vices, equipment or machinery to prime contractor or sub of any tier. Surveyors, architects and engineers who contract with the owner or owner’s agent also have lien rights, except that they do not have lien rights against owner-occupied 1- or 2-fam­ily detached unit homes. [66-11-101, 66-11-102, 66-11-115]

ON 1-4 FAMILY RESIDENTIAL OWNER-OCCUPIED BUILDINGS:

ONLY THE PRIME CONTRACTOR and those contracting directly with the owner can have a lien. If, however, the project is a sin­gle-family residence, and the prime is the same as (or is owned by) the own­er, then, prime’s la­bor­ers, sup­pliers, and first-tier subs may have liens (as they essentially are contracting directly with the owner). If it is a single-family dwelling that the owner does not intend to live in, and the owner is not the general contractor, then it appears that remote contractors do have lien rights. [66-11-146; Schor at §43.03[B]]

NOTE THAT only LICENSED contractors have lien rights on residential projects. Recent case law has interpreted the statutes to limit the rule that unlicensed contractors forfeit their lien rights to claimants on single-family residential projects, not all residential projects. Where a contractor or sub bids on projects that are over its monetary licensing limits, the proper punishment is sanctions rather than a loss of lien rights. [66-11-150, 62-6-128; Anchor Pipe Co., Inc. v. Sweeney-Bronze Development, LLC, Slip Copy, 2012 WL 3144638 (Tenn.Ct.App. 2012)]

NOTE THAT delivery is prima facie evidence of incorporation into the project. [66-11-101]

NOTE that owners must give contractors, and contractors must give subcontractors, notice of any defects and an opportunity to cure the defects before terminating a contract. [Lavy v. Carroll, Not Reported in S.W.3d, 2007 WL 4553016 (Tenn.Ct.App. 2007)]

ON PROJECTS PERTAINING TO THE DEVELOPMENT OF A LEASE PERTAINING TO OIL, GAS OR MINERALS:

Any person who performs labor or furnishes materials, supplies, fixtures, machinery or other things of value to a lessee holding or owning a leasehold, or any right conferred by a lease pertaining to the development of the oil, gas or mineral rights of the leasehold and who has a contract with or the written consent of the owner or the agent or representative of the owner of the leasehold, OR who is performing pursuant to a written request or by written consent of any contractor or subcontractor, or the agent of either. [66-11-147]

All furnishers of labor or materials, or rental of equipment or machinery, to the prime or an immediate or remote subcontractor, UNLESS the claim­ant receives by registered mail, re­turn receipt requested, a writ­ten no­tice of disclaimer from the con­tractor. In that case, anything the claimant supplies to the project after the claimant receives the notice will not be covered. Suppliers to suppliers are not covered. Additionally, land surveyors, architects and engineers have lien rights. (Note that on highway projects, only those furnishing to the general or first-tier subcontractor will be covered. [54-5-122]) [12-4-201, 12-4-203; Inryco, Inc. v. Eatherly Const. Co., 793 F.2d 767 (6^th Cir. 1986); Thompson & Green Mach. Co. v. M.P. Smith Constr. Co., 311 S.W.2d 614 (Tenn. Ct. App. 1958)]

-The building and land upon which structure is situa­ted. [66-11-102, 66-11-106]

-Insurance proceeds subject to lien where insured buil­ding is destroyed. [66-11-121]

-If, prior to any work, labor, supplies, etc. being provided to a project, the owner or the owner’s agent provides a payment bond to benefit remote contractors (which includes suppliers), in the amount of 100% of the prime contract, then remote contractors (which includes suppliers of materials, services, equipment or machinery, as well as subcontractors) must bring a claim against the bond, and must not file a lien. [66-11-124]

ON PROJECTS PERTAINING TO THE DEVELOPMENT OF A LEASE PERTAINING TO OIL, GAS OR MINERALS:

The leasehold or the entire interest of the lessee, including oil or gas wells, machinery and equipment. [66-11-147]

Contractor’s payment bond. (The rules are somewhat different for highway jobs.) [12-4-201]

ON ALL JOBS OTHER THAN 1-4 FAMILY RESIDENTIAL, OWNER-OCCUPIED BUILDINGS:

-Prime contractor [66-11-203]

-Sub, laborer or material­ supplier.

Not­e: Preliminary notice/­notice of nonpayment is not required where the only amount outstanding is re­tained per­centage. [66-4-145]

NOTE that where the contract is written and acknowledged or sworn to, and it describes prop­erty being improved and states the contract price, if the claimant records an authenti­cated copy of the contract, subsequent purchasers of the property for value will be deemed to have notice of the claimant’s lien. [66-11-111]

ON 1-4 FAMILY RESIDENTIAL OWNER-OCCUPIED BUILDINGS:

No one. Note, however, that home improvement contractors are required to be licensed. There are also several requirements for a home improvement contract, which are set out in the preliminary notice sections, below. [62-6-508]

No one on state jobs, but it is best in all cases to obtain a copy of the bond itself, to assure that there are no notice requirements on that specific project, especially if it is for a county, city, or other public agency.

ON ALL JOBS OTHER THAN 1-4 FAMILY RESIDENTIAL, OWNER-OCCUPIED BUILDINGS:

Prime contractor:

To owner. [66-11-203]

Subs, Laborers, Suppliers or Equipment or Machinery Providers:

To owner and “prime contractor in contractual privity” with the claimant. This means the prime contractor in the claimant’s chain of contracts back to the owner, not that the claimant must have a direct contract with the prime contractor. If there is more than one prime contractor, the claimant would give notice to the prime contractor under whose contract the sub is ultimately working. [66-11-145; Diaz Construction v. Industrial Development Board of the Metropolitan Government of Nashville and Davidson County, Slip Copy, 2015 WL 1059065 (Ct.App.Nashville 2015)]

ON 1-4 FAMILY RESIDENTIAL OWNER-OCCUPIED BUILDINGS:

In this case, the “notice” is the contract between the owner and the general contractor. [62-6-508]

A preliminary notice is not required.

ON ALL JOBS OTHER THAN 1-4 FAMILY RESIDENTIAL, OWNER-OCCUPIED BUILDINGS:

Prime contractor:

Notice must be delivered prior to commen­cing improvements or entering into the contract. [66-11-203]

Sub, Laborers, Suppliers or Equipment or Machinery Providers:

Notice must be received within 90 days of last day of each month within which work/services/-materials/machinery/equipment were furnished, if the items are unpaid and the claimant “intends” to claim a lien for the unpaid amounts. [66-11-145; CMT, Inc. v. West End Church of Christ, Not Reported in S.W.3d, 1996 WL 64003 (Tenn.Ct.App. 1996)] NOTE ALSO that, while this notice is REQUIRED to protect claimant’s lien rights, the time frame for filing a lien is very similar, and must be given AFTER the preliminary notice, so DON’T WAIT UNTIL THE LAST MINUTE TO SEND THIS NOTICE.

ON 1-4 FAMILY RESIDENTIAL OWNER-OCCUPIED BUILDINGS:

At the time of entering into the general contract. [62-6-508]

Not applicable.

ON ALL JOBS OTHER THAN 1-4 FAMILY RESIDENTIAL, OWNER-OCCUPIED BUILDINGS:

Prime contractor:

Please contact Levy von Beck and Associates for form information. Note: the owner may cancel contract within 3 days of receiving prelimin­ary notice. [66-11-204]

Subs, Laborers, Suppliers or Equipment or Machinery Providers:

-Claimant’s name and the address to which one may send communications

-Prime description of work, labor, materials, services, equipment, or machinery provided

-The amount owed as of the date of the notice;
-The last date the claimant performed work and/or provided labor or materials, services, equipment, or machinery in connection with the improvements

-Description of property sufficient for identifica­tion

-Notice of nonpayment. Please contact Levy von Beck and Associates for form information. [66-11-145]

ON 1-4 FAMILY RESIDENTIAL OWNER-OCCUPIED BUILDINGS:

The general contract must (1) Be written and must contain the complete agreement between the owner and the home improvement contractor;
(2) State the full names and addresses of all parties, the license number of the home improvement contractor, the date when the contract was executed by the parties and must contain a description of the work to be done and the goods to be used;
(3) Be completed in full without any blank spaces to be filled in after the contract is signed by the owner and must clearly describe any other documents which are to be incorporated, and shall contain the following notice directly above the space provided for the signature of the owner:
“NOTICE TO OWNER: Do not sign this contract if blank. You are entitled to a copy of the contract at the time you sign”;
(4) Contain the approximate dates when the work will begin and be substantially completed; (5) Contain the agreed upon consideration for the work; (6) Contain a notice that all home improvement contractors must be licensed by the board and that any inquiries about a contractor should be transmitted to the board’s office; (7) Contain all other matters upon which the parties lawfully agree; and
(8) Not contain any power of attorney to confess judgment. [62-6-508]

Not applicable.

ON ALL JOBS OTHER THAN 1-4 FAMILY RESIDENTIAL, OWNER-OCCUPIED BUILDINGS:

By Prime contractor:

“Deliver by reg­istered mail or otherwise.” It appears that receipt is essential. [66-11-203]

By Subs, etc.:

Registered or cer­tified mail, return receipt requested; hand delivery with sworn statement, properly notarized, confirming delivery of written notice; or any other commercial delivery service that provides written confirmation of delivery of the notice. There is a rebuttable presumption that service is complete upon hand delivery, within 3 business days of mailing or within 1 business day after commercial overnight delivery, depending on which method used for service. NOTE that personal service by the claimant themselves is NOT effective; it must be given as described above. [66-11-145, 66-11-149; Vulcan Materials Co. v. Gamble Const. Co., Inc., 56 S.W.3d 571 (2001), appeal denied.]

ON 1-4 FAMILY RESIDENTIAL OWNER-OCCUPIED BUILDINGS:

No specific provision, as these requirements are all part of the contract. [62-6-508]

Not applicable.

An interim notice is not required.

An interim notice is not required.

ALL PROJECTS OTHER THAN OIL, GAS AND MINERAL LEASES:

-All claimants not contrac­ting directly with owner [66-11-115]

-Must give notice for each building or unit.

NOTE that a claimant may seek payment under the Prompt Payment Act as well, if payment is not timely made. [66-34-101 et seq.]

NOTE that where the contract is written and acknowledged or sworn to, and it describes prop­erty being improved and states the contract price, if the claimant records an authenti­cated copy of the contract, subsequent purchasers of the property for value will be deemed to have notice of the claimant’s lien. [66-11-111]

OIL, GAS AND MINERAL LEASES:

-All claimants who perform labor or furnish materials, supplies, fixtures, machinery or other things of value to one with a lease or lease rights relating to oil, gas or other minerals, in the development or improvement of those rights, where the claimant has a contract with or the written consent of the owner or the agent or representative of the owner of the leasehold. [66-11-147]

Furnisher of labor or mater­ials (includes machinery or equipment). [12-4-205]

ALL PROJECTS OTHER THAN OIL, GAS AND MINERAL LEASES:

-Owner. [66-11-115(b)] Where the project involves 2 or more lots, parcels, etc. improved under one contract and the improvements are not to be operated as a single improvement, the claimant must apportion the contract price between the various lots, units or improvements, and serve and file a separate notice of lien for the amount claimed against each lot, unit, parcel, etc. Where more than one building or improvement is made to a single lot or contiguous lots (such as townhomes), claimant must apportion the contract price between the separate buildings, units or improvements, and file a separate lien for each UNIT, if appropriate. [66-11-118, Williamson County Ready Mix, Inc. v. Pulte Homes Tennessee Ltd. Partnership, Not Reported in S.W.3d, 2008 WL 5234730 (Tenn.Ct.App.)] NOTE that if more than one agent is listed on the building permit, service on a listed agent shall be deemed to be service on all of the agent’s principals, including those who have not separately listed an agent. If more than one owner is listed on the building permit, service on the listed owner or owners is deemed to be service on all owners, including those not listed.
-Person or firm designated in notice of completion for receiving notice of claims. [66-11-143, 66-11-149]

-County Register of Deeds. [66-11-112]

PROMPT PAYMENT CLAIM:

To the party failing to make the outstanding payment. [66-34-602]

OIL, GAS AND MINERAL LEASES:

-Register’s office in the county in which the leasehold is located

-Owner of the property

-Holder of the leasehold or oil, gas or mineral rights. [66-11-147]

Either to contractor who executed the bond or to pub­lic official in charge of let­ting or award­ing con­tr­act (if claimant doesn’t know which public official awarded the contract, then for city job, mayor is fine; for county job, county execu­tive is fine; and for state job, gov­ernor is fine); recom­mended to notify both. [12-4-205]

ALL PROJECTS OTHER THAN OIL, GAS AND MINERAL LEASES:

Filed and received within 90 days after completion or abandonment of the entire project. (Note that the “abandonment” is deemed to have occurred as of the last day of work.) [66-11-112; East Tennessee Grading, Inc. v. Bank of America, N.A., 338 S.W.3d 506 (Tenn.Ct. App.,2010)] IF, HOWEVER, notice of comple­tion is filed with Register of Deeds, then lien must be filed within 10 days of that fi­ling for 1-4 family resi­den­tial units, or with­in 30 days of that filing for all other projects. NOTE, however, that if the Owner files a notice of completion but does not give a copy to the prime contractor, the prime contractor’s lien rights are not affected by the recording of the notice. If a notice of completion is recorded, if claimant hasn’t filed a copy of the contract or other notice, must send owner (or whoever is so designated in notice of completion) by registered or cer­tified mail notice stating the amount of the claim and certifying that the claim does not include any amount owed to the cla­imant on any other job or under other con­tract. This notice must be sent so that owner receives it within ten days of filing of no­tice of completion on 1-4 family residential units, and within 30 days on all other projects. IF, however, claimant filed notice of nonpayment, and then re­ceives copy of noti­ce of comple­tion, claimant must file his or her lien within 30 days after the date of recording of the notice of completion. If the claimant is not served with a copy of the notice of completion, then the 30-day deadline does not apply. [66-11-111, 66-11-112, 66-11-115(b), 66-11-143, 66-11-145]

ALSO, note that after completion of project and payment of contract price, prime contractor must give notice to owner by registered mail.

PROMPT PAYMENT CLAIM:

No specific time, but after the claimant’s customer has been paid but has failed to timely pay the claimant. [66-34-602]

OIL, GAS OR MINERAL LEASES:

Notice must be received within 90 days of last delivery. [66-11-147]

Received after claimant’s last delivery, but wi­th­in 90 days after the com­ple­tion of the public work. [12-4-205]

ALL PROJECTS OTHER THAN OIL, GAS AND MINERAL LEASES:

-To Owner: Registered or cer­tified mail, return receipt requested; hand delivery with sworn statement, properly notarized, confirming delivery of written notice; or any other commercial delivery service that can confirm delivery of the notice. It appears that actual receipt is required. [66-11-115; 66-11-112]

-Filed with county Register of Deeds

-If contract is written, may also record authenti­cated copy of contract, provided it describes prop­erty being improved and states contract price. [66-11-111]

PROMPT PAYMENT CLAIM:

By registered or certified mail, return receipt requested. [66-34-602]

OIL, GAS AND MINERAL LEASES:

-To Owner and leaseholder: Registered or cer­tified mail, return receipt requested; hand delivery with sworn statement, properly notarized, confirming delivery of written notice; or any other commercial delivery service that can confirm delivery of the notice.

-Filed with the Register of Deeds. [66-11-147]

-Certified mail, return receipt requested, or by personal delivery. The consequences of refusal of delivery are not clear, thus recommend ensuring actual receipt of notice. [12-4-205]

ALL PROJECTS OTHER THAN OIL, GAS AND MINERAL LEASES:

To Owner:

-Requires only written notice that lien is claimed, however, it is recommended to send owner same notice as that filed with county register. [66-11-115] NOTE, however, that lien amount cannot exceed contract price between the owner and the prime contractor. [66-11-120]

To County Register:

-Sworn statement of amount due and approximation of amount due to accrue. Neither the statute nor the case law indicates whether anyone other than the claimant is authorized to sign the statement. The amount should not include any interest, service charges, late fees, attorney fees, or other amounts that are not actually part of the improvement. Note that tools, equipment, and machinery are lienable for the reasonable rental value for the period of actual use and any reasonable period of non-use, and for the purchase price of the tools, equipment or machinery, but only if the tools, equipment, or machinery were purchased for use in the course of the particular improvement and have no substantial value to the lienor after the completion of the improvement on which they were used. Note also that the notice must be sworn to and notarized, but a jurat is not required (though there is no harm in including one.). [66-11-102(e); 66-11-112; Bolon Custom Kitchens v. Parman, Not Reported in S.W.3d, 2010 WL 761289 (Tenn.Ct.App., 2010)]

-Reasonably certain des­cription of premises. [66-11-112]

OR, a lienor can fi­le copy of his or her contract, as long as it was acknowledged by the owner, or in lieu of the owner’s acknowledgment the prime contractor has sworn to its execution by the owner, and as long as it is in writing and states the con­tract price, and describes the property with reason­able certainty. [66-11-111]

Note: For a single improve­ment on adjacent lots, file one claim; for two or more lots where the improvements are not to be operated as a single improvement, appor­tion contract price and file sep­arate claims; and for two or more buildings or con­dos where they are not to be operated as a single improvement, appor­tion contract price and file separate claims for each building or unit. NOTE also that the time for giv­ing or fil­ing notice begins to run with respect to each such building or unit. Note also that where a condominium or similar association contracts for work done, the lien attaches to all the units, but where one owner contracts with the claimant, the lien only attaches to one unit. [66-11-118]

PROMPT PAYMENT CLAIM:

Notice of the provisions of the Prompt Payment Act and of the claimant’s intent to seek relief provided for in the Act. [66-34-602]

OIL, GAS AND MINERAL LEASES:

-Sworn statement of amount due and approximation of amount due to accrue.

-Reasonably certain des­cription of premises

-Neither the statute nor the case law indicates whether anyone other than the claimant is authorized to sign the statement.

-NOTE that the lien amount is ultimately limited to the amount the owner or leaseholder agreed to pay to the original contractor. [66-11-147, 66-11-120]

-Nature of claim, i.e., type of materials or lab­or furnished;

-Itemized account of materi­al furnished or labor done;

-Balance due;

-Description of property improved. [12-4-205]

PRIME CONTRACTOR (OR ONE IN DIRECT PRIVITY WITH THE OWNER):

Within 1 year after the work is finished or the materials are furnished, UNLESS the contractor is served with written demand by owner or the owner’s agent for enforce­ment of lien. In that case, the contractor must file within 60 days after receipt of de­mand. [66-11-106, 66-11-130]

ALL OTHER CLAIMANTS:

Within 90 days after giving final notice, UNLESS claimant is served with written demand by owner, agent or prime contrac­tor, for enforce­ment of lien. In that case, must file within 60 days after receipt of de­mand. [66-11-115­(c), 66-11-130]­ (NOTE that owner may not compel a la­borer to commence suit.)

NOTE that owners must give contractors, and contractors must give subcontractors, notice of any defects and an opportunity to cure the defects before terminating a contract. [Lavy v. Carroll, Not Reported in S.W.3d, 2007 WL 4553016 (Tenn.Ct.App. 2007)]

PROMPT PAYMENT CLAIM:

If the party receiving the notice does not, within 10 calendar days after receiving the notice, make the payment or provide to the claimant a response giving adequate legal reasons for the failure to make the payment, the claimant may bring a suit. [66-34-602]

Within 6 months of comple­tion of public work or of furnishing labor or mater­ials. (Neither statute nor online case law specifies whether it’s the earlier or later of the two periods, so recommend playing it safe and foreclosing within the earlier of the above-mentioned periods.) [12-4-206] (Note that the requirements on a highway project are different and not discussed here.)