Contractors and subcontractors who do work in the greater Nashville area should be familiar with Tennessee’s mechanics’ lien laws.
As is this case with other states, Tennessee has enacted statutes which allow those who do construction work on residential or commercial property to place a lien against the property if the construction firm does not get paid.
One advantage of a lien is that it will put a legal cloud on the property where the construction firm worked. The unpaid contractor or subcontractor can elect to foreclose the lien and sell the property in satisfaction of their debt.
In short, a mechanic’s lien gives a contractor a lot of leverage for getting paid in full.
Those who want a mechanic’s lien will have to understand the applicable laws
Mechanics’ liens are valuable tools so long as a construction business which is entitled to one strictly follows the law. This can be difficult because the rules for mechanics’ liens can be complicated.
There are several requirements and deadlines pertaining to mechanics’ liens. A business will have to give proper notice of their ability to record a mechanics’ lien. Within 90 days of being allowed to do so, they must correctly file the right paperwork to obtain a lien.
One common mistake contractors make when filing a lien is to include additional costs and fees, like interest, an attorney fee or a late payment penalty, into the lien claim itself.
There is also a time limit under which a contractor or subcontractor must file litigation to enforce a mechanics’ lien.
One misstep could mean that a Tennessee mechanics’ lien is not enforceable, and a business will have to use another, possibly less effective way to collect on a construction debt.
It is important that businesses which earn their living through construction understand all the legal steps for obtaining a mechanics’ lien.