TENNESSEE

LIEN LAWS BY STATE
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TENNESSEE CODE
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The only 1st notice required in TENNESSEE at the start of a construction related improvment is for General/Prime Contractors. TENNESSEE Code Annotated § 66-11-203 mandates that a Prime/General Contractor must serve by registered mail a Contractor’s Notice To Owner to the prior to the commencement of the improvement of a property. It is also recommended that you send a copy of the Contractor’s Notice To Owner to the other legal parties on a project (Customer, Lender, Owner’s Agent).

Subcontractors do have to send a warning notice before filing a lien. TENNESSEE Code Annotated § 66-11-145 mandates that a Notice Of Nonpayment must be served by the Subcontractor to the Owner ninety (90) days after the last day of the month where labor or materials were provided for the improvement of a project. Additionally, TENNESSEE Code Annotated §12-4-115 mandates that along with a Notice Of Nonpayment, Subcontrators must serve a Notice To Owner within ninety (90) days after the completion of providing labor or materials or the completion of the entire project.

General/Prime/Sub Contractors (Private Projects): TENNESSEE Code Annotated § 66-11-117 mandates that a Notice Of Lien And Sworn Statement – Subcontractor can be recorded at any time up to ninety (90) days after the completion of providing labor or materials or the completion of the entire project. It is recorded at the Register’s office in the county where a project you provided construction related labor, services, equipment or materials is located. A recorded copy of a Notice Of Lien And Sworn Statement must be sent to the Owner of the improved property, with copies being sent also to the other legal parties (General Contractor, Lender, Customer).

Note that the time frame documented above is made much shorter when an Owner or Owner’s Agent files a Notice Of Completion. TENNESSEE Code Annotated § 66-11-143 mandates that an Owner or Owner’s representative (Agent, General\Prime Contractor) should record a Notice of Completion at the completion of a project with the Register of Deeds in the county in which the improvement is located. Prime Contractors and Subcontractors then have ten (10) days (residential) or thirty (30) days (commercial) to record a Notice Of Lien And Sworn Statement.

Subcontractors (Private Projects): TENNESSEE Code Annotated § 66-11-117 mandates that Subcontractors have ninety (90) days after filing A Notice Of Lien And Sworn Statement to foreclose on the property after recording the Notice Of Lien And Sworn Statement.

TITLE 66 PROPERTY

CHAPTER 11 MECHANICS’ AND MATERIALMEN’S LIENS

PART 1 GENERAL PROVISIONS

66-11-101 Definitions

66-11-102 Persons Entitled to Lien, Priorities, Exemption

66-11-103 Spouse Contract

66-11-104 Attachment of Lien, Cessation of Operations

66-11-105 Interests Subject to Lien, Removal of Improvement

66-11-106 Extent of Lien, Continuation

66-11-107 Priorities Among Lienors

66-11-108 Priority of Mortgage

66-11-109 Vendor’s Lien

66-11-110 Judgment Lien

66-11-111 Recording of Contract in Lien Book

66-11-112 Sworn Statement, Recording, Time, Notice, Abandonment

66-11-113 Attachment

66-11-114 Repossession, Limitation

66-11-115 Notice to Owner

66-11-117 Precedence of Lien, Sworn Statement, Filing

66-11-118 Adjacent Parcels, Allocation, Multiple Units, Plant Materials

66-11-119 Amendment of Claim

66-11-120 Amount of Lien

66-11-121 Lien on Insurance Proceeds

66-11-122 Transfer of Debt

66-11-123 Transfer or Assignment of Debt

66-11-124 Acceptance of Note, Waiver

66-11-125 Personal Action

66-11-126 Enforcement by Attachment, Pleadings, Warrants

66-11-127 Personal Representative

66-11-128 Persons Under Disability

66-11-129 Right of Removal

66-11-130 Demand for Action

66-11-131 Joinder of Parties

66-11-132 Consolidation

66-11-133 Adjustment of Rights

66-11-134 Courts

66-11-135 Satisfaction of Lien

66-11-136 Contractor’s Bond

66-11-137 Diversion of Loan Proceeds, Felony

66-11-138 Diversion of Funds, Felony

66-11-139 Willful Overstatement

66-11-140 Evidence of Fraud

66-11-141 Well-drilling Lien

66-11-142 Release Bond, Payment Bond, Recording

66-11-143 Notice of Completion, Recording, Effect, Service

66-11-144 Deposit of Retained Funds in Escrow, Interest, Nonwaiver

66-11-145 Notice of Nonpayment, Contents, Service

66-11-146 Liens on Residential Property

PART 2 CONSUMER PROTECTION

66-11-201 Title

66-11-202 Definitions

66-11-203 Notice to Owner

66-11-204 Rejection of Contract

66-11-205 Affidavit and Receipt

66-11-206 Noncompliance, False Statements, Misdemeanor, Remedies

66-11-207 Construction

66-11-208 Choice of Law and Venue

TENNESSEE CODE

TITLE 66 PROPERTY

CHAPTER 11 MECHANICS’ AND MATERIALMEN’S LIENS

PART 1 GENERAL PROVISIONS

66-11-101 Definitions

As used in this part, unless the context otherwise requires:

(1) “Contract” means an agreement for improving real property, written or unwritten, express or implied, and includes “extras” as herein defined;

(2) “Contractor” means a person other than a materialman or laborer who enters into a contract with the owner of real property for improving it, or who takes over from a contractor, as above defined, the entire remaining work under such contract;

(3) “Contract price” means the amount agreed upon by the contracting parties for performing all labor and furnishing all materials contemplated by their contract, and shall be increased by the price of “extras” as herein defined, or diminished by allowances made because of altered specifications or defects in workmanship or materials;

(4) “Extras” means labor performed or materials furnished for improving real property, authorized by the owner and not included in previous contracts;

(5) “Furnish materials” means supply materials which are incorporated in the improvement and those which become normal wastage in construction operations; or specially fabricated materials for incorporation in the improvement; or supply building material used for the construction and not remaining in the improvement, subject to diminution by the salvage value of such material; and includes appliances or machinery used on the particular improvement to the extent of the reasonable rental value for the period of actual use (not determinable by the contract for rental unless the owner is a party thereto), but does not include tools. The delivery of materials to the site of the improvement shall be prima facie evidence of incorporation of such materials in the improvement;

(6) “Improve” means to build, erect, alter, repair or demolish any improvement upon, connected with, on or beneath the surface of or to excavate any real property, or to furnish materials for any of such purposes, including ornamental shrubbery and trees, driveways, and private roadways, or to perform any labor upon such improvements, or to equip such improvement with fixtures or permanent apparatus;

(7) “Improvement” means any building, structure, erection, alteration, demolition, excavation, or any part thereof, including ornamental shrubbery and trees, driveways, and private roadways, on real property for its permanent benefit, whether there is existing at the time of such work, any building, structure or other improvements upon the real property;

(8) “Laborer” means any person who, under properly authorized contract, of any degree of remoteness, personally performs on the site of the improvement labor for improving real property;

(9) “Lienor” means any person having a lien or right of lien upon real property by virtue of this part, and includes the person’s successor in interest;

(10) “Materialman” or “furnisher” means any person who, under contract, furnishes material to the owner, contractor, or subcontractor of any degree, on the site of the improvement or for direct delivery to the site of the improvement, or who specially fabricates materials for the improvement, and who performs no labor in the installation of such improvement;

(11) “Owner” includes the owner in fee of real property, or of a less estate therein, a lessee for a term of years, a vendee in possession under a contract for the purchase of real property, and any person having any right, title or interest, legal or equitable, in real property, which may be sold under process;

(12) “Owner-occupant” means any owner of real property who, at the time such owner contracts for the improvement thereof, occupies such real property as such owner’s principal place of residence;

(13) “Perform,” when used in connection with the words labor or services, means performance by the lienor or by another for the lienor;

(14) “Real property” includes real estate, lands, tenements and hereditaments, corporeal and incorporeal, and fixtures;

(15) “Single family residence” means any real property owned and occupied by no one other than the owner and the owner’s immediate family;

(16) “Subcontractor” means a person other than a materialman or laborer who enters into a contract with a contractor for the performance of any part of the contractor’s contract, or who enters into a contract with a subcontractor, as above defined, and in any degree, for the performance of any part of such subcontractor’s contract; and

(17) “Visible commencement of operations” means the first actual work of improving upon the land or the first delivery to the site of the improvement of materials which remain thereon until actually incorporated in the improvement, of such manifest and substantial character as to notify interested persons that an improvement is being made or is about to be made on the land.

66-11-102 Persons Entitled to Lien, Priorities, Exemption

(a) There shall be a lien upon any lot of ground or tract of land upon which a house or structure has been erected, demolished, altered, or repaired, or for fixtures or machinery furnished or erected, or improvements made, by special contract with the owner or the owner’s agent, in favor of the contractor, mechanic, laborer, founder or machinist, who does the work or any part of the work, or furnishes the materials or any part of the materials, or puts thereon any fixtures, machinery, or material, and in favor of all persons who do any portion of the work or furnish any portion of the materials for such building; provided, that the subcontractor, laborer or materialman satisfies all of the requirements set forth in s 66-11-145, if applicable.

(b) There shall also be a lien upon any lot of ground or tract of land in favor of any land surveyor who has, by special contract with the owner or the owner’s agent, performed on such lots of ground or tracts of land the practice of land surveying, as defined in s 62-18-102. The lien shall secure the agreed contract price therefore or a reasonable price for those services performed by such land surveyor.

(c)(1) There shall be a lien upon any lot of ground or tract of land upon which a house or structure has been erected, demolished, altered, repaired, or improvements made, by special contract with the owner or the owner’s agent, in favor of any person licensed to practice architecture or engineering under title 62, chapter 2, for architectural or engineering services performed on such tract or building. The lien shall secure the agreed contract price thereof or a reasonable price for the services performed by such architect or engineer.

(2) The lien provided for in subdivision (c)(1) shall relate to and take effect from the time of visible commencement of operations as provided in s 66-11-104. Any such architectural or engineering lien shall be subordinate to the lien of any mortgagee unless the lienor has given written notice of the lienor’s lien to such mortgagee prior to the recordation of the mortgage.

(3) The provisions of this subsection shall not apply to owner occupants of one-family or two-family detached unit homes.

66-11-103 Spouse Contract

When the contract for improving real property is made with a husband or a wife who is not separated and living apart from that person’s spouse, and the property is owned by the other or by both, the husband or wife who contracts shall be deemed to be the agent of the other unless such other shall within ten (10) days after learning of the contract give the contractor written notice of that person’s objection thereto.

66-11-104 Attachment of Lien, Cessation of Operations

(a) Such lien shall relate to and take effect from the time of the visible commencement of operations, excluding however, demolition, surveying, excavating, clearing, filling or grading, placement of sewer or drainage lines or other underground utility lines or work preparatory therefore, erection of temporary security fencing and the delivery of materials therefore.

(b) If there is a cessation of all operations at the site of the improvement for more than ninety (90) days, any lien for labor of any nature performed or for materials of any nature furnished after the visible resumption of operations shall relate to and take effect only from such visible resumption Of operations.

(c) Nothing in this section shall affect the priority or parity of any liens as established by any section of this chapter.

66-11-105 Interests Subject to Lien, Removal of Improvement

(a) Such lien shall extend to, and only to, the owner’s right, title or interest in the real property and improvements, existing at the time of the visible commencement of operation or thereafter acquired.

(b) If any part of the real property or improvements subject to such lien be removed by the owner or any other person at any time before discharge thereof, such removal shall not affect the rights of the lienor either in respect to the real property and improvements, or the part so removed.

66-11-106 Extent of Lien, Continuation

The lien shall include the building, structure, fixture, or improvement as well as the lot or land, and continue for one (1) year after the work is finished or materials are furnished, and until the final decision of any suit that may be brought within that time for its enforcement.

66-11-107 Priorities Among Lienors

(a) Each such lienor shall have this lien in proportion to the amount and value of the work such person does or the materials such person furnishes.

(b) All liens provided by this part, except those of laborers, shall be on a parity, and shall be settled pro rata; all liens of laborers shall be on a parity one with another, and shall have preference over all other liens created by this part.

66-11-108 Priority of Mortgage

If the contract is made with the mortgagor, and the mortgagee has written notice of the same by certified or registered mail before the work is begun or materials furnished, and the mortgagee gives written consent thereto, the lien shall have priority over the mortgage; and if the mortgagee fails to object, in writing, within ten (10) days after receipt of the notice, the mortgagee’s consent shall be implied; provided, that the person giving notice shall include a name and return address to which the written objection shall be mailed by certified or registered mail. Otherwise, the lien shall have no priority over the mortgage.

66-11-109 Vendor’s Lien

The same rule as provided in s 66-11-108 shall operate upon the vendor’s lien, when the vendor has conveyed, expressly reserving a lien, or has only executed a title bond.

66-11-110 Judgment Lien

The lien of a judgment of a court of record shall not have relation so as to defeat this lien, if the latter is fixed on the real property in good faith and without collusion.

66-11-111 Recording of Contract in Lien Book

Where the contract is in writing, by virtue of which real property is so improved, it may be acknowledged (or in lieu sworn to by the contractor as to its execution by the owner) and recorded in the lien book in the register’s office in the county where the premises, or any part, are situated. Such registration shall be noticed to all persons of the existence of such lien, provided it sets forth the contract price and describes the real estate to be affected with reasonable certainty.

66-11-112 Sworn Statement, Recording, Time, Notice, Abandonment

(a) In order to preserve the virtue of the lien, as concerns subsequent purchasers or encumbrancers for a valuable consideration without notice thereof, though not as concerns the owner, such lienor, who has not so registered such lienor’s contract, is required to file for record in the office of the register of deeds of the county where the premises, or any part affected lies, a sworn statement similar to that set forth in s 66-11-117, and pay the fees. The register shall file, note and record same, as provided in s 66-11-117. Such filing for record is required to be done within ninety (90) days after the building or structure or improvement is demolished, altered and/or completed, as the case may be, or is abandoned and the work not completed, or the contract of the lienor expires or is terminated or the lienor is discharged, prior to which time the lien shall be effective as against such purchasers or encumbrancers without such registration; provided, that the owner shall give thirty (30) days’ notice to contractors and to all of those lienors who have filed notice in accordance with s 66-11-145 prior to the owner’s transfer of any interest to a subsequent purchaser or encumbrancer for a valuable consideration.

(b) A building, structure or improvement shall be deemed to have been abandoned for purposes of this chapter when there is a cessation of operation for a period of sixty (60) days and an intent on the part of the owner or contractor to cease operations permanently, or at least for an indefinite period.

(c) Any other provision to the contrary notwithstanding, any lien acquired under contract executed on or after April 17, 1972, by virtue of s 66-11-141, may be filed within ninety (90) days after completion of the structure which is, or is intended to be, furnished water by virtue of drilling a well.

66-11-113 Attachment

Whenever materials have been furnished to improve real property and delivered on the premises by a lienor, and payment therefore has not been made, such materials shall not be subject to attachment, execution, or other legal process to enforce any debt due by the purchaser of such materials, except a debt due for the purchase price thereof, so long as in good faith the same are about to be applied to improve the real property; but if the owner has made payment for materials furnished and the materialman has not received payment therefore, such materials shall not be subject to attachment, execution, or other process to enforce the debt due for the purchase price therefore.

66-11-114 Repossession, Limitation

(a) If for any reason an improvement is abandoned before completion, or, though completed, materials delivered are not used therefore, a person who had delivered materials for such an improvement which have not been incorporated therein, and for which such person has not received payment, may repossess and remove such materials; and thereupon such person shall not be entitled to any lien upon the real property or improvements for the price thereof, but shall have the same rights in regard to the materials as if such person had never parted with the possession.

(b)(1) The right to repossess and remove the materials shall not be affected by their sale, encumbrance, attachment, or transfer from the site of the improvement, except that, if the materials have been so transferred, the right to repossess shall not be effective as against a purchaser or encumbrancer thereof in good faith whose interest therein shall have arisen since such transfer from the site of the improvement, or as against a creditor attaching after such transfer.

(2) The right of repossession and removal given by this section shall extend only to materials whose purchase price does not exceed the amount remaining due to the person repossessing; but where materials have been partly paid for, the person delivering them may repossess them as allowed in this section on refunding the part of the purchase price which has been paid.

(c) The use of materials for scaffolding, forms, etc., is governed by another section.

66-11-115 Notice to Owner

(a) Every journeyman or other person contracted with or employed to work on the buildings, fixtures, machinery, or improvements, or to furnish materials for the same, whether such journeyman, furnisher, or other person was employed or contracted with by the person who originally contracted with the owner of the premises, or by an immediate or remote subcontractor acting under contract with the original contractor, or any subcontractor, shall have this lien for such work or material; provided, that the subcontractor, laborer or materialman satisfies all of the requirements set forth in s 66-11-145, if applicable.

(b) Within ninety (90) days after the demolition and/or building or improvement is completed, or the contract of such laborer, mechanic, furnisher, or other person shall expire, or such person is discharged, such person shall notify, in writing, the owner of the property on which the building is being erected or the improvement is being made, or the owner’s agent or attorney, if the owner resides out of the county, that the lien is claimed.

(c) The lien shall continue for the period of ninety (90) days from the date of the notice in favor of such subcontractor, journeyman, furnisher, mechanic or laborer, and until the final termination of any suit for enforcement brought within that period.

66-11-117 Precedence of Lien, Sworn Statement, Filing

A mechanic’s lien shall have precedence over all other subsequent liens or conveyances during such time; provided, that a sworn statement of the amount due and/or approximating that to accrue for such work, labor, or materials, and a reasonably certain description of the premises, shall be filed, within the ninety-day period referred to in s 66-11-115(b), or in the case of liens acquired by contract executed on or after April 17, 1972, by virtue of s 66-11-141, within ninety (90) days after completion of the structure which is or is intended to be furnished water by virtue of drilling a well, or abandonment of work on the structure, as the case may be, with the county register, who shall note the same for registration, and put it on record in the lien book in the office of the register, for which the register shall be entitled to the sums specified in s 8-21-1001, which sums shall be paid by the party filing the same; but such fees shall be receipted for on the statement of account, and shall be part of the indebtedness or charge secured by the lien, and this registration shall be notice to all persons of the existence of such lien.

66-11-118 Adjacent Parcels, Allocation, Multiple Units, Plant Materials

(a)(1) Where the amount due is for labor performed or materials furnished for a single improvement on contiguous or adjacent lots, parcels or tracts of land and is made or to be made under the same direct contract or contracts, a lienor shall be required to file only one (1) claim of lien covering the entire demand against such real property.

(2) If two (2) or more lots, parcels, or tracts of land are improved under the same direct contract or contracts and the improvements are not to be operated as a single plant, a lienor who has performed labor or furnished materials therefore shall, in claiming a lien, apportion such lienor’s contract price between the several lots, parcels, or tracts of land and improvements thereon and file a separate claim of lien for the amount demanded against each lot, parcel, or tract of land and the improvements on such lot, parcel, or tract of land. In such case, proof of delivery, at the order of the purchaser, to any of such lots, of materials to be used in one (1) or more of such improvements shall, prima facie, be sufficient proof of delivery to support a claim of lien on any of such lots.

(b)(1) Whenever more than one (1) building, condominium unit or other improvement is constructed upon or made to a single lot, parcel or tract of land or contiguous lots, parcels or tracts of land, the visible commencement of operations as defined in this chapter with respect to each such separate building, unit or improvement shall not be deemed to constitute or otherwise relate to the visible commencement of operations with respect to any other building, unit or improvement on any such single lot, parcel or tract of land or any such contiguous lots, parcels or tracts of land. In connection therewith, except in cases where a lienor has furnished ornamental shrubbery and/or trees, delivery of which was accepted by the owner, contractor, subcontractor or agent from the lienor, a lienor who has performed labor or furnished materials therefore shall, in claiming a lien, apportion the lienor’s contract price between the separate buildings, units or improvements thereon as applicable and file a separate claim of lien for the amount demanded against each such separate building, unit or improvement; in such event, the time prescribed in ss 66-11-112 and 66-11-115 for giving or filing notice of lien shall commence to run with respect to each such building, unit or improvement immediately upon the completion of the same.

(2) Whenever a lienor has furnished ornamental shrubbery and/or trees, delivery of which was accepted by the owner, contractor, subcontractor or agent from the lienor at the lienor’s place of business or delivery point and used for or in connection with more than one (1) building, condominium unit or other improvement on a single lot, parcel or tract of land or contiguous lots, parcels or tracts of land, the lienor shall be required to file only one (1) claim of lien covering the lienor’s entire demand against such real property.

66-11-119 Amendment of Claim

(a) Any claim of lien filed as provided in this part may be amended at any time during the period allowed for filing such claim; provided, that such claim of lien and amendment are filed in good faith, and such amendment is not shown to be prejudicial to another interested person.

(b) Any amendment of the claim of lien shall be filed in the same manner as is provided for the filing of the original claim of lien.

(c) After any such amendment is filed for record a copy of such amendment shall be served upon the owner.

66-11-120 Amount of Lien

The claims secured by lien for labor done, and materials furnished, shall in no case exceed the amount agreed to be paid by the owner in the owner’s contract with the original contractor.

66-11-121 Lien on Insurance Proceeds

(a) The proceeds of any insurance which by the terms of the policy are payable to the owner of real property improved, and are actually received by or are to be received by the owner because of the destruction or removal by fire or other casualty of an improvement on which lienors have performed labor, or for which they have furnished materials, shall, after the owner has been reimbursed therefrom for premiums paid by the owner, if any, for such insurance, be subject to liens provided by this part to the same extent and in the same order of priority as the real property would have been had such improvement not been so destroyed or removed.

(b) The proceeds of any insurance which by the terms of the policy are payable to a contractor or subcontractor, and actually so received or to be so received by such contractor or subcontractor, shall, after such contractor or subcontractor has been reimbursed therefrom for premiums paid by such contractor or subcontractor, if any, for such insurance, be liable for the payment of demands for labor or materials furnished by the order and for which the contractor or subcontractor is liable in the same manner and under the same conditions as payments to the contractor or subcontractor under the contract would have been had such improvements not been so destroyed or removed.

66-11-122 Transfer of Debt

This lien shall not pass to any person to whom the debt is transferred without notice of the lien.

66-11-123 Transfer or Assignment of Debt

The lien of another shall not be lost where any contractor or subcontractor has transferred or assigned the debt or charge due such lienor.

66-11-124 Acceptance of Note, Waiver

(a) The acceptance by the lienor of a note or notes for all or any part of the amount of the lienor’s demand shall not constitute a waiver of the lienor’s lien therefore, unless expressly so agreed in writing, nor shall it in any way affect the period for filing the claim of lien under this part.

(b) Any person other than a laborer may, as a part of that person’s contract, waive any right of lien under this part, but a laborer may not waive such laborer’s right of lien.

66-11-125 Personal Action

Nothing in this part shall be construed to prevent any lienor under any contract from maintaining an action thereon at law in like manner as if the lienor had no lien for the security of the lienor’s debt, and the bringing of such action shall not prejudice the lienor’s rights under this part.

66-11-126 Enforcement by Attachment, Pleadings, Warrants

Liens under this part shall be enforced by attachment only, in manner following:

(1) Where the plaintiff or complainant lienor has a contract with the owner, the lien shall be enforced by attachment upon petition at law or bill in equity, filed under oath, setting forth the facts, describing the property, and making the necessary parties defendant; or before a court of general sessions, where the amount of the claim is within its jurisdiction, the affidavit for the writ to contain such recitals;

(2) Where there is no such contract, by attachment in a court of law or equity in like manner; or before a court of general sessions, having jurisdiction, based upon like affidavit, the writ of attachment to be accompanied by a warrant for the sum claimed, to be served upon the owner and may, within the discretion of the plaintiff or complainant, be served upon the contractor, or subcontractor in any degree, with whom the complainant is in contractual relation, but the owner shall have the right to make the contractor or subcontractor a defendant by cross action or cross-bill as is otherwise provided by law; and

(3) The clerk of the court in which the suit is brought may issue the attachment writ, without first obtaining fiat of a judge or chancellor.

66-11-127 Personal Representative

The provisions of this code prohibiting the bringing of suits against personal representatives within six (6) months after the grant of letters shall not apply to suits brought under the provisions of this part.

66-11-128 Persons Under Disability

(a) If the labor, improvements or materials are furnished for work done on the lands of any infant, person of unsound mind, or cestui que trust, and in excusable ignorance on the part of the contractors, mechanics, laborers, or furnishers, of such person’s rights or claims, the contractors, mechanics, laborers, or furnishers shall have the right, after giving ten (10) days’ notice to any guardian or trustee of such person, within which period satisfaction may be made, to take and remove such parts of the property on which their labor was performed, or their materials, machinery, or other property was used, the removal to be only of enough to satisfy their true demand and to be without substantial injury to the property of such person as it stood prior to improvement.

(b) Or, the court, in the enforcement of such lien, may order such improvement to be separately sold and the purchaser may remove it within such reasonable time as the court may fix. The purchase price for such improvement shall be paid into court. The owner of the land upon which the improvement was made may demand that the land be restored to substantially its condition before the improvement was commenced, in which case the court shall order its restoration and the reasonable charge therefore shall be first paid out of such purchase price and the balance shall be paid to lienors and other encumbrancers in accordance with their respective rights.

66-11-129 Right of Removal

The right of removal provided in s 66-11-128 shall apply on like terms and in like manner as in other cases of superior titles or liens, when the work was done by the contractor, furnisher, laborer, or mechanic in excusable ignorance of the rights of such persons.

66-11-130 Demand for Action

Upon written demand of the owner, the owner’s agent, or original contractor, served on the lienor, and endorsed as to service, by any sheriff, deputy sheriff or constable, requiring the lienor, not including a laborer but including an original contractor, to commence action to enforce the lienor’s lien, and describing the property therein, such action shall be commenced or the claim filed in a creditors’ or foreclosure proceeding, within sixty (60) days after service, or such lien shall be forfeited.

66-11-131 Joinder of Parties

Where there are several persons entitled to the lien given by this part, all, or any number of them, may join in one (1) attachment suit in equity; or, upon the filing by one (1) or more of the lienors of a bill for the benefit of all lienors, any other lienor may come in by petition, under oath, without suing out a new attachment, by giving bond and security, with effect as if the attachment had been taken out by the petitioner.

66-11-132 Consolidation

If separate actions are brought in the same court, they shall be consolidated; and if in different courts, the actions last brought may, upon application, be removed into the court, if a court of record, in which the first action was instituted, and there consolidated, unless the later action be one for the benefit of all lienors, in the nature of a lien-creditors’ bill, in which event earlier actions not of that nature shall be filed on petition.

66-11-133 Adjustment of Rights

The court is authorized to adjust, in such action, the conflicting rights of the parties, claiming liens, among themselves; and to enforce the same according to priorities, if any.

66-11-134 Courts

(a) When the lien is enforced by an action before a court of general sessions, and when an attachment has been levied on the lot or land, and judgment rendered, the papers shall be returned to the circuit court, there to be proceed with as in case of a court of general sessions execution levied on land.

(b)(1) No court of general sessions’ attachment in any such case shall be a lien on the land, unless, within twenty (20) days after the levy thereof, an abstract of same, showing the name of the plaintiff and defendant, the date and amount of the claim, and a description of the premises affected, be filed for registration in the lien book in the office of the register of the county in which the real property lies.

(2) The register shall index such abstract, as the indexer is required to index deeds, and, for the registration and indexing, the indexer shall receive the sum prescribed by s 8-21-1001.

66-11-135 Satisfaction of Lien

When a registered lien is satisfied, by payment or otherwise, the claimant shall acknowledge satisfaction by entry on the lien book; and if the claimant neglects or fails to do so for twenty (20) days after written demand, the claimant shall forfeit and pay to the owner or contractor the sum of fifty dollars ($50.00), and be liable to any person injured to the extent of the injury, which in no event shall be less than one hundred dollars ($100).

66-11-136 Contractor’s Bond

The owner of the property on which the improvement is made has the right to demand from the original contractor an indemnity or refunding bond, to protect the owner in case of the enforcement of this lien by such subcontractors, mechanics, journeymen, laborers, or furnishers; and in the event such contractor is paid for the work done, or any part of it, covered by ss 66-11-115 – 66-11-117, then on payment by the owner to such subcontractor, mechanic, journeyman, laborer, or furnisher of the amount due, the owner shall have judgment for such amount by motion after notice or by action on such bond in any court having jurisdiction in such cases; but the contractor shall have the right to contest the legality and amount of the claim of such subcontractors, mechanics, journeymen, laborers, or furnishers before the contractor is held liable.

66-11-137 Diversion of Loan Proceeds, Felony

Any owner who procures a loan secured by mortgage or other encumbrance on certain real property, representing that the process thereof are to be used for the purpose of improving such real property, and who, with intent to defraud, shall use such proceeds or any part thereof for any other purpose than to pay for labor performed on, or materials furnished for, this specific improvement, while any amount for which the owner may be or become liable for such labor or materials remains unpaid, or while any amount of which the owner has received notice of nonpayment prescribed by this part remains unpaid, commits a Class E felony.

66-11-138 Diversion of Funds, Felony

Any contractor, subcontractor, or other person who, with intent to defraud, uses the proceeds of any payment made to that person on account of improving certain real property for any other purpose than to pay for labor performed on, or materials furnished by that person’s order for, this specific improvement, while any amount for which such person may be or become liable for such labor or materials remains unpaid, commits a Class E felony.

66-11-139 Willful Overstatement

If, in any action to enforce the lien, the court finds that any lienor has willfully and grossly exaggerated the amount for which that person claims a lien, as stated in that person’s registration of lien or pleading filed, no recovery may be allowed thereon, in the discretion of the court

66-11-140 Evidence of Fraud

Such use of the proceeds mentioned in ss 66-11-137 – 66-11-139 for any purpose other than the payment of such unpaid amount shall be prima facie evidence of intent to defraud.

66-11-141 Well-drilling Lien

(a) There is created a lien against the tract of land, on which any person, firm or corporation has drilled a well by contract with the owners of the land or their duly authorized agent, for all labor, materials and equipment used or furnished by the driller of the well, including any pump, apparatus or other fixtures attached thereto, installed by the driller.

(b) Such lien shall remain against the land for a period of two (2) years after the completion of such well or after the furnishing of any pump or apparatus attached thereto, unless sooner discharged by full payment.

(c) Such lien may be enforced by attachment of the land in a proceeding brought in any court of competent jurisdiction prior to the expiration of the lien, and the land may be sold in satisfaction of such unpaid indebtedness owing to the driller.

(d) The rights of the lienor hereunder shall be subject to the terms of ss 66-11-112 and 66-11-117.

66-11-142 Release Bond, Payment Bond, Recording

(a) If a lien, other than a lien granted in a written contract, is fixed or is attempted to be fixed by a recorded instrument under this chapter, any person may record a bond to indemnify against the lien. Such bond shall be recorded with the register of deeds of the county in which the lien was filed. Such bond shall be for the amount of the lien claimed with corporate surety authorized and admitted to do business in the state of Tennessee and licensed by the state of Tennessee to execute bonds as surety, and such bond shall be conditioned upon the obligor’s satisfying any judgment that may be rendered in favor of the person asserting the lien. The bond shall state the book and page or other reference and the office where the lien is of record. The recording by the register of a bond to indemnify against a lien shall operate as a discharge of the lien. After recording the bond, the register shall return the original bond to the person providing the bond. The register shall index the recording of the bond to indemnify against the lien in the same manner as a release of lien. 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.

(b)(1) When a general 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. A copy of such bond may, at the contractor’s option, be recorded with the register of deeds in lieu of the bond provided in subsection (a), to discharge a lien. Upon recording with the register of deeds, the contractor shall notify the surety executing the bond and the lien upon the property shall be discharged.

(2) The bond recorded pursuant to this subsection shall:

(A) Be in a penal sum at least equal to the total of the original contract amount;

(B) Be in favor of the owner; (C) Have the written approval of the owner endorsed on it;

(D) Be executed by:

(i) The original contractor as principal; and

(ii) A corporate surety authorized and admitted to do business in this state and licensed by this state to execute bonds as surety;

(E) Be conditioned on prompt payment for every laborer, subcontractor or materialman contracted with or employed to work on buildings, fixtures, machinery, or improvements, or to furnish materials for the same, whether such laborer, subcontractor or materialman was employed or contracted with by the person who originally contracted with the owner of the premises, or by an immediate or remote subcontractor acting under contract with the original contractor, or any subcontractor; and

(F) Be conditioned on prompt payment for usual extras not exceeding fifteen percent (15%) of the contract price.

(c) The register of deeds may record any bond filed under this section and return the original to the person providing such bond.

66-11-143 Notice of Completion, Recording, Effect, Service

(a) In order to be protected from lien claims which have not previously been registered as provided in ss 66-11-111, 66-11-112, and 66-11-117, the owner or purchaser of improved real property may, upon completion of the improvement or the demolition thereof, register in the office of the register of deeds in the county where the real property or any affected part thereof is located a notice of completion, or the owner or purchaser may require a person or organization with whom the owner or purchaser has contracted for the improvements or demolition to do so upon completion of the structure or improvement or demolition.

(b) Such notice of completion shall contain the following:

(1) The name of the owner or owners of the land;

(2) If the owner or owners have contracted with one (1) person, firm or organization for the entire job or improvement or demolition, the name of such person, firm or organization;

(3) The location and description of the property;

(4) Date of the completion of the structure, improvement or demolition;

(5) A statement that a transfer of ownership of all or a part of the real property or an interest therein and encumbrance thereon or a settlement of the claims of parties entitled to the benefits of this chapter will take place not earlier than ten (10) days from the date of the filing of the notice of completion; provided, that the ten-day expiration for lien claimants shall only apply to contracts for improvement to or on real property, for one-family, two- family, three-family and four-family residential units. On all other contracts for improvement to or on real property, the expiration for lien claimants shall be thirty (30) days from the date of the filing of the notice of completion in the register’s office;

(6) The name and address of the person, firm, or organization to which parties entitled to the benefits of this chapter may send notice of claims; and

(7) Acknowledgment by the person filing the notice, or by that person’s agent or attorney.

(c) The register of deeds shall make a permanent record of all notices of completion filed in the office of the register and such records shall be available for public examination. The register of deeds shall be entitled to the fees provided in s 8-21-1001, for the register’s services in receiving and maintaining notices of completion required in this section.

(d)(1) Any person claiming a lien for labor or materials upon the property described in the notice of completion who has not previously registered such person’s contract as provided in s 66-11-111 or registered a sworn statement as provided in s 66-11-112 or s 66-11-117 shall send by registered or certified mail written notice addressed to the person, firm or organization and at the address designated in the notice of completion for receiving notice of claims, 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.

(2)(A) Such written notice shall be timely mailed for improvements to or on real property for one-family, two-family, three-family and four family residential units so as to be received by the addressee not more than ten (10) days from the date of the filing of the notice of completion in the register’s office, and if same is not received by the addressee within that time, the lien rights of the claimant shall expire.

(B) Such written notice shall be timely mailed for all other contracts for improvements to or on real property so as to be received by the addressee not more than thirty (30) days from the date of the filing of the notice of completion in the register’s office, and if same is not received by the addressee within that time, the lien rights of the claimant shall expire.

(3) Any notice of completion registered as herein provided before completion of the improvement or the demolition is void and of no effect whatsoever.

66-11-144 Deposit of Retained Funds in Escrow, Interest, Nonwaiver

(a) Whenever, in any contract for the improvement of real property, a certain amount or percentage of the contract price is held back by the owner or contractor, that retained amount shall be deposited in a separate escrow account with a third party giving proper security for the performance of the obligation of the owner or contractor.

(b) As of the time of the deposit of the retained funds, such funds shall become the sole and separate property of the contractor, subcontractor, materialman, or laborer to whom they are owed.

(c) Upon satisfactory completion of the contract, to be evidenced by a written release by the owner or contractor, all funds accumulated in the escrow account together with any interest thereon shall be paid immediately to the contractor, subcontractor, materialman or laborer to whom such funds and interest are owed.

(d) In the event the owner or contractor fails or refuses to execute the release provided for in subsection (c), then the contractor, subcontractor, materialman, or laborer, shall seek any remedy in a court of proper jurisdiction and the person holding the fund as escrow agent shall bear no liability for the nonpayment thereof to the contractor, subcontractor, materialman, or laborer.

(e) In contracts to which the state of Tennessee or any department, board or agency thereof, including the University of Tennessee, is a party, interest shall be paid on such retained amounts at the same rate interest is paid on the funds of local governments participating in the local government investment pool established pursuant to s 9-4-704, for the contract period.

(f) The provisions of this section shall be applicable to the state of Tennessee, any department, board or agency thereof, including the University of Tennessee, and all counties and municipalities and all departments, boards or agencies thereof, including all school and education boards, and any other subdivision of the state.

(g) The provisions of this section shall be applicable to all contracts for the improvement of real property when the contract price is five hundred thousand dollars ($500,000) or greater.

(h) Compliance with this section shall be mandatory, and may not be waived by contract.

66-11-145 Notice of Nonpayment, Contents

(a) Every subcontractor, laborer or materialman contracted with or employed to work on buildings, fixtures, machinery, or improvements, or to furnish materials for the same, except one-family, two-family, three-family and four-family residential units, whether such subcontractor, laborer or materialman was employed by or contracted with the person who originally contracted with the owner of the premises or by an immediate or remote subcontractor acting under contract with the original contractor, or any subcontractor, shall mail, within ninety (90) days of the last day of the month within which work, services or materials were provided, a notice of nonpayment for such work, services or materials to the owner and contractor contracting with the owner if its account is, in fact, unpaid. The notice, which shall be served by registered or certified mail, return receipt requested, shall contain:

(1) The name of the subcontractor, laborer or materialman and the address to which the owner and the contractor contracting with the owner may send communications to the subcontractor, laborer or materialman;

(2) A general description of the work, services or materials provided;

(3) A statement of the last date the claimant performed work and/or provided services or materials in connection with the improvements; and

(4) A description sufficient to identify the real property against which a lien may be claimed.

(b) For purposes of this section, the name of the owner, the owner’s address, the contractor, the contractor’s address, and the property description stated on a building permit authorizing such building, fixture, machinery or improvement shall be conclusively presumed to be correct and sufficient to identify the real property.

(c) A subcontractor, laborer or materialman who fails to provide the notice of nonpayment shall have no right to claim a lien under this chapter, except this section shall not apply to a certain amount or percentage of the contract amount which is retained to guarantee performance of the subcontractor, laborer or materialman.

(d) Each subcontractor, laborer or materialman who has provided the required notice of nonpayment on or before the date a notice of completion is filed pursuant to s 66-11-143 shall be notified by the person filing the notice of completion on the same date that the notice of completion is filed, by registered or certified mail, return receipt requested, and such subcontractor, laborer or materialman shall have thirty (30) days to serve notice in accordance with the provisions of s 66-11-143. The lien rights of a subcontractor, laborer or materialman not so notified shall continue and shall be in accordance with other provisions of this chapter.

(e) A notice of nonpayment provided in accordance with this section shall not be considered notice required by s 66-11-115(c).

66-11-146 Liens on Residential Property

(a)(1) As used in this subsection, “residential real property” means a building consisting of one (1) dwelling unit in which the owner of the real property intends to reside or resides as the owner’s principal place of residence, including improvements to or on the parcel of property where such residential building is located, and also means a building consisting of two (2), three (3) or four (4) dwelling units where the owner of the real property intends to reside or resides in one (1) of the units as the owner’s principal place of residence, including improvements to or on the parcel of property where such residential building is located.

(2) Notwithstanding any other provision of law to the contrary, except as provided in subsection (b), on individual contracts to improve residential real property, a lien or right of lien upon such property shall exist only in favor of the general contractor who enters into such contract with the owner of such property or the owner’s agent. No lien, except the general contractor’s lien, shall exist upon such property under such contract in favor of a subcontractor, materialman, mechanic, laborer, founder, machinist, or any other person who does the work or any part of the work, or furnishes the materials or any part of the materials, or puts thereon any fixtures, machinery or materials, ordered by or through such persons.

(b)(1) As used in this subsection, “residential real property” means improvements to or on a parcel of property upon which a building is constructed or is to be constructed consisting of one (1) dwelling unit intended as the principal place of residence of a person or family.

(2) When the owner of residential real property and the general contractor are one and the same person, or such an individual controls entities owning such property and general contracting business, on individual contracts to improve residential real property, a lien or right of lien upon such property shall exist only in favor of the general contractor, subcontractors of the general contractor, and suppliers who contract with the general contractor. No lien in favor of the subcontractor or such suppliers shall exist on such real property from and after the date the general contractor pays the subcontractor or supplier for services performed or material delivered by that supplier or subcontractor. No lien, except as provided in this subsection, shall exist upon such property under such contract in favor of a materialman, mechanic, laborer, founder, machinist or any other person who does the work or any part of the work, or furnishes the materials or any part of the materials, or puts thereon any fixtures, machinery or materials, ordered by or through such persons.

PART 2 CONSUMER PROTECTION

66-11-201 Title

This part shall be known and may be cited as the “Truth in Construction and Consumer Protection Act of 1975.”

66-11-202 Definitions

As used in this part, unless the context or subject matter indicates another meaning, the words and phrases defined in s 66-11-101, as amended and as may from time to time be amended, have the same meaning as set out therein and such s 66-11-101 as amended and as may from time to time be amended is incorporated herein by reference.

66-11-203 Notice to Owner

Any contractor who is about to enter into a contract, either written or oral, for improving real property with the owner or owners thereof shall, prior to commencing the improvement of the real property or making of the contract, deliver, by registered mail or otherwise, to the owner or owners of the real property to be improved written notice in substantially the following form:

Delivered this_________day of________,20_____,by_________________________________, Contractor. The above-captioned contractor hereby gives notice to the owner of the property to be improved, that the contractor is about to begin improving the property according to the terms and conditions of the contract and that under the provisions of the state law (ss 66-11-101 – 66-11-141):

(1) There shall be a lien upon the real property and building for the improvements made in favor of the contractor, mechanic, laborer, founder or machinist, who does the work, or furnishes the materials for such improvements for a duration of one (1) year after the work is finished or materials furnished;

(2) Except as modified by s 66-11-146, that every person contracted with or employed to work on the buildings or to furnish materials for the same with the above-named contractor shall have a lien on the property for that person’s work or material; provided, that such person notify the owner in writing within ninety (90) days after the completion of the improvement, which lien will continue for ninety (90) days after such notice;

(3) Except as modified by s 66-11-146, that 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 Contract

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 s 66-11-203; otherwise the contract is affirmed.

66-11-205 Affidavit and Receipt

Upon completion of the contract or improvement and upon receipt of the contract price, the contractor shall deliver by registered mail or otherwise to the owner or owners of the real property a sworn affidavit and receipt in the following form:

State of Tennessee

County of_______

On this_____ day of_______, 20_______, before me personally appeared __________(if a corporation use”_____________ President (or other officer) of (Corporate Name) a corporation”), contractor, to me personally known, who being duly sworn by oath, did say that all of the persons, firms and corporations, including general contractors and all subcontractors, who have furnished services, labor or materials according to the plans or specifications, or extra items used in the construction or repair of buildings and improvements on the real estate hereinafter described, have been paid in full or will be paid in full no later than ten (10) days from the date a bill is rendered for such services, labor or materials and that such work has been fully completed and accepted by the owner, and further that such owner has paid the contract price in full, the receipt of which is hereby acknowledged. Affiant further says that no claims have been made to affiant by, nor is any suit pending on behalf of any contractors, subcontractors, laborers or materialmen, and further that no chattel mortgages or conditional bills of sale have been given or are now outstanding as to any materials, appliances, fixtures or furnishings placed upon or installed in the aforementioned premises. Affiant as a party does for a valuable consideration hereby agree and guarantee to hold the owner of the real estate, the owner’s successors, heirs and assigns, harmless against any lien, claim or suit by any general contractor, subcontractor, mechanic or materialman and against chattel mortgages or conditional bills of sale in conjunction with the construction of such buildings or improvements on such real estate.

The real estate and improvements referred to herein are situated in the County of __________________, State of Tennessee, and are described as follows: (give street address)

________________________ Contractor

Sworn to and subscribed before me on the date above first written.

________________________ Notary Public

My Commission Expires:___________________

66-11-206 Noncompliance, False Statements, Misdemeanor, 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 ss 66-11-203 and 66-11- 205 and the contractor has not complied with ss 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 ss 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 s 66-11-102.

66-11-207 Construction

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.

66-11-208 Choice of Law and Venue

(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.