Construction projects often pose significant challenges when securing payment. If you are a contractor, subcontractor or supplier in Tennessee, it helps to understand the difference between bond claims and lien claims.
Both secure payment yet function in fundamentally different ways. Understanding these differences helps you protect your business and avoid legal pitfalls.
Who can file and against whom
Subcontractors, laborers or suppliers typically initiate lien claims directly against the property where they performed work or supplied materials. You file a bond claim against the surety that issued the payment bond, often on a public project.
Tennessee law treats these differently. It governs mechanic’s liens under T.C.A. § 66-11-101 and payment bonds for public projects under T.C.A. § 12-4-201. Knowing who you can file against affects your strategy.
Deadlines and timing
Deadlines remain critical in both cases.
Tennessee law generally requires you to file lien claims within 90 days after you last provide labor or materials. However, requirements can vary for prime contractors, subcontractors and residential or commercial projects. Bond claims follow different timelines tied to notice to the surety.
These timelines can also differ depending on whether the project is state, municipal or federal (Miller Act). Missing a deadline can limit your options, so you must understand the rules first.
Security and property rights
A lien claim creates a legal interest in the property itself. It can provide leverage when a party delays payment, but you must manage public records and notices.
A bond claim does not attach to the property. The surety must review your claim and may assess its validity prior to issuing payment. This distinction affects how you pursue recovery when a general contractor fails to remit payment.
Procedural differences
Lien claims require sending designated notices, including a pre-lien notice in some cases and occasional court involvement. Missing a pre-lien notice can block your filing.
Bond claims usually start with submitting a formal notice to the surety and following the claim procedures outlined in the bond. Tennessee law treats public and private projects differently, which can influence each claim.
Protect your rights with knowledge
Understanding the differences between lien claims and bond claims can save you time and stress. Knowing who can file, the deadlines, property rights and steps helps you act confidently. Staying informed under Tennessee law improves your chance of securing payment while avoiding costly mistakes.
