Tennessee Mechanic Lien Law: Complete Guide

Who Can Assert a Mechanic's Lien in Tennessee

Tennessee mechanic lien rights run to two classes of contractors. Each has its own notice obligations and enforcement deadlines, and the rules below depend on which class the claimant falls into:

• A prime contractor, defined as a person or entity contracting directly with the property owner. T.C.A. § 66-11-101(12).
• A remote contractor, defined as a person or entity contracting with someone other than the property owner. T.C.A. § 66-11-101(14).

Private Commercial Works — Prime Contractor Notice Requirements

Tennessee law does not require the prime contractor to give the property owner any notice of its lien in order to preserve the lien. The owner is presumed to know whether it has paid the prime contractor, and the lien arises automatically when the prime contractor furnishes labor or materials for the improvement.

Three additional notices apply in specific circumstances and protect the prime contractor's rights when those circumstances arise:

• A notice of lien served on bona fide purchasers or encumbrancers for value to preserve the priority of the lien against intervening interests.
• A notice of potential lien claim served on residential property owners.
• A notice of completion.

Private Commercial Works — Remote Contractor Notice of Non-payment (T.C.A. § 66-11-145)

A remote contractor that has not been paid for labor, material, services, equipment, or machinery furnished must serve a Notice of Non-payment on both the property owner and the prime contractor. The notice must be served within 90 days of the last day of each month in which the unpaid labor, materials, services, equipment, or machinery were provided. T.C.A. § 66-11-145(a).

Service of the Notice of Non-payment is a condition precedent to the remote contractor's right to claim a lien. A remote contractor that fails to serve the notice in compliance with the statute can recover only retainage. T.C.A. § 66-11-145(b).

The Notice of Non-payment must contain each of the following items under T.C.A. §§ 66-11-145(a)(1)-(5):

• The name and address of the remote contractor.
• A general description of the work, labor, materials, services, equipment, or machinery provided.
• The amount owed as of the date of the notice.
• A statement of the last date the claimant performed work or provided labor, materials, services, equipment, or machinery related to the improvement.
• A description sufficient to identify the real property against which a lien may be claimed.

Private Commercial Works — Notice of Mechanic Lien to Owner

In addition to the Notice of Non-payment, remote contractors on commercial projects must serve a Notice of Mechanic Lien on the property owner within 90 days after the last work performed or materials supplied. If the Notice of Mechanic Lien is not served within that 90-day period, the remote contractor must record and serve the notice within 90 days after completion of the entire project. T.C.A. §§ 66-11-115, 117.

The notice must be recorded by registering a statement of the amount due for work or materials furnished with the County Register in the county where the premises (or any part thereof) are situated. The property owner may file a Notice of Completion to shorten the mechanic lien recording period to 30 days on commercial projects or 10 days on residential projects.

Private Residential Works — Contractor Notice Obligations

On residential property, only the contractor who contracts directly with the property owner has mechanic lien rights. Subcontractors and materialmen have no mechanic lien rights on residential property in Tennessee. No preliminary notice is required for the residential contractor.

The residential contractor must register within 10 days of the filing of a Notice of Completion by the property owner. T.C.A. §§ 66-11-146, 143. No mechanic lien is allowed if the contractor is not properly licensed in the jurisdiction where the work is performed.

For the contractor's mechanic lien to take priority over a mortgage, the contractor must give written notice to the mortgage holder before any work begins on the property. T.C.A. § 66-11-108. This notice requirement is critical for ensuring mechanic lien priority in disputes with lenders.

Public Works — Payment Bond Notice of Claim (T.C.A. § 12-4-205)

On public works projects with contracts exceeding $100,000, subcontractors, materialmen, and laborers are not required to serve any preliminary notice to preserve their right to claim against the payment bond. However, a Notice of Claim on Bond must be served on either the contractor who executed the bond or the appropriate public official within 90 days of project completion. T.C.A. § 12-4-205.

The Notice of Claim on Bond is a mandatory prerequisite to filing suit on the payment bond. Failure to serve this notice within the 90-day window will bar the claimant from recovering on the bond.

State Highway Projects — Sub-subcontractor and Materialman Notice (T.C.A. § 54-5-117)

On Tennessee state highway projects, sub-subcontractors and materialmen must serve written notice on the prime contractor within 90 days of their last performance of work or delivery of materials. T.C.A. § 54-5-117. This notice is required to preserve the right to make a claim against the payment bond on highway projects.

Additionally, claimants on state highway retainage funds must send notice to the Department of Transportation within 30 days after the last publication of Notice of Final Settlement with the contractor. T.C.A. § 54-5-122.

Amending a Notice of Lien

A lien claimant may amend any notice of lien required under the Tennessee mechanics' lien statute at any time during the period allowed for serving or recording the applicable notice. T.C.A. § 66-11-119(a). Any amendment must be served or recorded in the same manner as the original notice. T.C.A. § 66-11-119(b).

Waiving Mechanic Lien Rights

A claimant cannot prospectively waive its mechanic lien in Tennessee. Any contract provision purporting to waive a lien right before the right has accrued is void and unenforceable as against public policy.