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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,
Service
(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
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