Page 46 - State Law Summary of Mechanic's Lien Law

Tennessee TN

What is the statutory authority? Is there a procedure to bond over the mechanic’s lien(s)?
T. C. A. § 66-11-101 et. seq. If a mechanic’s lien that is not granted by a written contract is recorded, any
person may record a bond to indemnify against the lien. The bond must be
What is the Attachment Date of the Mechanic’s Lien? filed in the register of deeds for the amount of the lien, be secured by a licensed
Lien attaches as of the date of visible commencement of operations on the Tennessee surety and conditioned upon the obligor on the bond satisfying any
property. T.C.A. §§ 66-11-101(16) and 66-11-104(a). judgment in favor of the lien claimant. T.C.A. § 66-11-142.

What constitutes visible commencement of construction? The property owner can also demand a bond from the prime contractor to protect
“Visible commencement of operations” means the first actual work of improving the owner against liens from remote contractors. If the owner pays the prime
upon the land or the first delivery to the site of the improvement of materials, that contractor and a remote contractor still asserts a lien, the owner may recover from
remain on the land until actually incorporated in the improvement, of such manifest the bond by filing a complaint against the bond in any court having jurisdiction
and substantial character as to notify interested persons that an improvement is and the prime contractor shall have the right to contest the claim. T.C.A. § 66-11-136.
being made or is about to be made on the land, excluding, however, demolition,
surveying, excavating, clearing, filling or grading, placement of sewer or drainage Remote contractors cannot assert lien rights if before any work or materials are
lines or other utility lines or work preparatory therefor, erection of temporary provided, the owner or their agent provides a payment bond equal in amount to
security fencing and the delivery of materials therefor. T. C. A. § 66-11-101(16). 100% of the prime contractor’s contract price in favor of the remote contractors,
executed by a licensed Tennessee surety, and recorded in the register of deeds.
If there is a cessation of all operations at the site of the improvement for more T.C.A. § 66-11-124(c).
than ninety (90) days and a subsequent visible resumption of operations, any
lien for labor performed or for materials furnished after the visible resumption Are the ALTA 32/33 Series Endorsements available for the Loan Policy?
of operations shall attach and take effect only from the visible resumption of Yes.
operations. T. C. A. § 66-11-104(b).

What is the priority of the insured construction mortgage/
deed of trust?
The general rule is that the deed of trust must be recorded prior to visible
commencement of operations to maintain priority over mechanic’s liens. T. C. A. §
66-11-104; see also Williams Lumber & Supply Co. v. Poarch, 428 S.W.2d 308 (1968).

If priority of the insured mortgage/deed of trust is lost, is there a
statutory procedure to regain priority?
No.

When does a mechanic’s lien have to be filed for claimant to maintain
lien rights?
To maintain priority over subsequent purchasers or encumbrances for valuable
consideration with no notice of the lien, the lien claimant must record a sworn
statement in the register of deeds where the property is located within 90 days
after the improvement is completed or abandoned. T.C.A. §66-11-112(a). This only
applies if the lien claimant has not recorded their contract under T.C.A. § 66-11-111.

What is the period of enforcement of a filed mechanic’s lien?
A prime contractor’s lien continues for 1 year after the completion or abandonment
of the improvement. If suit is filed within 1 year, the lien continues until the final
decision in the suit. T.C.A. § 66-11-106.

A remote contractor’s lien continues 90 days from the date of service of notice
in favor of the remote contractor. If suit is filed within the 90 day period, the lien
continues until the termination of the trust. T.C.A. § 66-11-115.

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