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Can a non licensed contractor place a lien against my home in TN if used for primary residence?

I'm just researching statutes mechanics liens in TN. I own property and my boyfriend and I were building a home on land that I own solely. He left me and now is wanting $68k for labor and materials but refuses to provide me all paid invoices and W9s to assure me that no one else can bill me. Just curious if he can place a lien against my home. I was building this home as a primary residence.

1 reply

May 17, 2018

That's a good question, and it's wise to be proactive in understanding lien rights. Waiting until after a lien has been filed on your property could cause headaches to multiply. Anyway, in Tennessee, if the owner is acting as their own prime contractor on a project on a single-family residential property, laborers and suppliers contracting with the prime contractor and “1st tier subs” have lien rights. It's worth noting, though, that Tennessee statute defines an owner-occupant as "any owner of real property who, at the time the owner contracts for the improvement of the real property, occupies the real property as the owner’s principal place of residence." Thus, there's a fair question as to whether the construction of a property that will eventually be owner-occupied would be considered "owner-occupied" in relation to Tennessee mechanics lien laws. In a situation where a party under direct contract with the owner is the potential lien claimant - that claimant will likely have lien rights regardless of the project type. However, unless proper preliminary notice was given, a valid mechanics lien may not be filed. For owner-occupied projects, this notice must be made within the contract for work itself. For every other project, a prime contractor must deliver preliminary notice to the property owner, via certified or registered mail, prior to commencement of work or entering into the contract. If this notice is not sent, any mechanics lien filed will likely be unenforceable. Of course, that doesn't mean a lien won't be filed. County recorders often have neither the bandwidth nor the authority to scrutinize every claim for its validity. Thus, when an invalid lien claim is filed, a property owner may need to take legal action to get that lien removed. Alternatively, an owner can let the lien attach to the property, knowing that the lien may be unenforceable - but even when a lien is unenforceable, the clouded title could cause issues. Preventing the lien filing in the first place is typically the better move, if possible. Finally, while requesting invoices and W9's may be effective, collecting mechanics lien waivers is the best way to be sure that no liens will be filed on the project. Plus, they can be used as a negotiating chip - typically, lien waivers will be required in exchange for payments made, much like a receipt (more on waivers, here: 4 Tips on Requesting, Collecting, and Tracking Lien Waivers). When utilized properly, a lien waiver will waive the right to file a lien equal to the amount of payments made.

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