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Mechanics’ liens protect contractors and tradespeople

On Behalf of | Nov 17, 2022 | Construction Law

Some Tennessee land is perfect for raising livestock and growing crops, but investing time or money in building farms or other structures in the Volunteer State was once considered a very risky proposition. That is why Thomas Jefferson introduced the concept of the mechanic’s lien to the American legal system. Jefferson wanted to make sure that the nation’s new capital would be built, so he needed a way to reassure tradespeople and contractors that they would be paid for any work they did.

A powerful tool

A general contractor usually places a mechanic’s lien on a property after contracts are signed and work is set to begin. At this point, the mechanic’s lien is imperfect because the money involved is not yet due. Mechanic’s liens are powerful construction law tools because they usually take precedence over other debts when creditors are paid after properties are sold. This can make life difficult for building owners who want to take out loans secured by properties with mechanic’s liens.

Mechanics’ liens in Tennessee

Under Tennessee law, mechanics’ liens are only placed on owner-occupied residential properties when the individual or organization seeking the lien did business with the owner directly. Subcontractors can file mechanics’ liens against commercial properties, but they must meet strict deadlines.

Contractor and subcontractor disputes

Mechanics’ liens should be dealt with swiftly whenever possible, and this is especially true if they are held by subcontractors. When subcontractors are owed money for work they did on a commercial project in Tennessee, they sometimes take steps to enforce mechanics’ liens just to get the property owners involved. This puts added pressure on general contractors. Once the dispute has been resolved and the debt has been satisfied, it is very important to file a lien release in the county where the property is located.