We have an upcoming deadline indicating we need to send a notice of non-payment for a job in Tennessee. The only balance remaining is for retainage on those invoices. Do we need to send this notice for retainage only?
2 replies
Jul 8, 2020
Retainage doesn't have to be included in a Tennessee Notice of Nonpayment.§ 66-11-145 of Tennessee's mechanics lien statute, which creates the Notice of Nonpayment requirement, states the following at section (b):
"A remote contractor who fails to provide the notice of nonpayment in compliance with this section shall have no right to claim a lien under this chapter, exceptthis section shall not apply to a certain amount or percentage of the contract amount retained to guarantee performance of the remote contractor."
So, the statute quite explicitly states that retainage doesn't have to be included in a Notice of Nonpayment in order for lien rights to exist later on. Granted, if it appears that recovering retainage might be a problem with this customer, it might be useful to include retainage in a Notice of Nonpayment anyway.
For more discussion on Tennessee's notice requirements: Tennessee Preliminary Notice Guide and FAQs.
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Sep 13, 2022
is retainage in a AIA draw application to be used only for the line item it is being associated with or can it be used for other defective work cost of correction?
I.E., electrical line item retainage $5,000 not need for corrective work but Paving and curb retainage of $25,000 is insufficient to pay for corrective work = can the $5,000 retainage in Electrical line item be used for corrective work in paving and curb?