Although the mechanics’ lien is an extremely effective tool for contractors and subcontractors, successfully serving a mechanics’ lien comes with many challenges. In The Volunteer State, the rules and regulations related to pre-lien and mechanics’ lien deadlines are heightened to an even higher level of complexity than the majority of states. Even worse, if you’re unaware of lien requirements, the penalty can be extremely serious, including a misdemeanor offense in certain circumstances. For this reason alone, Tennessee-based construction professionals (and out-of-state contractors working in Tennessee) should always consult a Nashville mechanics’ lien law attorney to reserve their right to seek unpaid compensation.
In this article, construction attorneys with Cotney Construction Law will discuss pre-lien and mechanics’ lien deadlines. Hopefully, by the end of this article, you will have a better understanding of the lien process in the unforgiving State of Tennessee. For more information on liens, a Nashville construction lien lawyer is standing by to answer any of your questions related to seeking payment from a delinquent owner in The Volunteer State.
What’s the Notice to Owner?
A “Notice to Owner” is required in most states for general contractors. Tennessee is no exception. A Notice to Owner is the document that identifies the general contractor who is entering into an agreement with the owner to perform the work. The Notice to Owner is essentially a legal form that informs the owner that work is about to commence. In some cases, this notice is embedded in the contract, while in others, you’ll need to submit it in a timely fashion. If you fail to send this preliminary notice in Tennessee, your lien rights are no longer valid.
A few things construction professionals should consider in Tennessee related to the Notice to Owner is that this document must be delivered and received by the owner before starting work on the project. Second, although the general contractor is the only professional that needs to deliver this notice, the term “general contractor” refers to any professional who contracts directly with the owner. For example, if a supplier enters a contract with the owner, even though they might not perform any tasks on the jobsite, they are considered a “general contractor” and are required to send a Notice to Owner before performing any services.
What’s a Notice of Nonpayment?
In lieu of a Notice to Owner, remote contractors who did not enter a contract directly with the owner (subcontractors, suppliers, and other construction professionals) have a 90-day window (from the last day of the month) to provide a notice to the owner for owed compensation. This document is called the Notice of Nonpayment. Unlike the Notice to Owner, which is a one-time deal, this notice must be provided each and every month that these contractors do not receive compensation. Similar to the Notice to Owner, if a subcontractor, supplier, or construction professional who is eligible to file a Notice of Nonpayment fails to provide payment, they will lose their lien rights. This is strictly required for professionals working on commercial projects.
Understanding Mechanics’ Lien Requirements in Tennessee
Mechanics’ liens requirements can be difficult to navigate, as the time period to successfully file a lien against a property varies depending on your role on the project and the type of project you are working on. For general contractors to enforce a lien, they must file a lien within one year of the last furnishing of labor or materials. Subcontractors and other remote contractors have to file their lien within three months of the completion of work. The exception to these requirements is for general contractors working on smaller residential projects (one to four units) who are not required to file a lien.
Although the above is a basic guideline to lien rights in Tennessee, there’s plenty of more complexities in regard to how to strengthen your claim. For example, most general contractors will follow the same guideline as remote contractors by filing their lien within 90 days of completion of work. As the Tennessee lien system comes with many twists and turns, consult a Knoxville construction lien lawyer to learn more.
Related: Understanding Your Lien Rights
Strictly Enforced Deadlines
The ramifications of missing a pre-lien or mechanics’ lien deadline are serious. There’s no “late fee.” If you miss your deadline, your lien rights are lost. For this reason, construction professionals need to have a firm understanding of the lien laws in Tennessee. Moreover, if you’re an out-of-state contractor, it’s especially important to familiarize yourself with the unusually unforgiving lien laws in The Volunteer State, as you usually don’t find out that you can’t enforce a lien until you need to. Lastly, construction professionals need to closely track their days regarding the completion of work to ensure they maintain their lien rights. If you’re interested in enforcing a lien against a property, consult the construction attorneys at Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.