11.1 Prime vs. Remote Contractors, Residential Exemptions, and Notice of Nonpayment

A Tennessee mechanics’ lien is statutory security in qualifying real property for unpaid improvement work. It is not created merely by issuing an invoice, and it is separate from a breach-of-contract claim. Begin by identifying the property, claimant’s contract tier, required license, furnishing dates, ownership, and any recorded bond or notice of completion. Then apply T.C.A. Title 66, Chapter 11 in the correct order.

Prime and Remote Contractors

A prime contractor contracts directly with the owner. A remote contractor contracts with someone other than the owner, such as a subcontractor hired by the prime, a lower-tier subcontractor, or a supplier to an eligible contractor. The label “general contractor” in everyday speech is not enough to identify the statutory lien tier. A plumber hired directly by the owner can be a prime contractor for lien purposes even though the plumber performs only one trade.

Qualifying lien rights generally cover labor, materials, services, equipment, and machinery furnished to improve the property under the statute. Architects, engineers, and surveyors have specific provisions and notice conditions. A claimant required to hold a contractor or home-improvement license cannot assume that filing a lien cures unlicensed work; statutory licensing restrictions can eliminate lien rights. Verify the required credential, scope, name, and monetary authority at the relevant time.

Public property is not subject to an ordinary private-property mechanics’ lien. On federal, state, or local public work, evaluate payment-bond rights and deadlines instead. Tennessee’s public-work bond statute applies to contracts exceeding $100,000 and requires at least 25% of the full contract price; procurement terms often require more. Federal Miller Act rights have separate tier, notice, and suit rules. A notice under the private lien statute does not preserve a public payment-bond claim automatically.

Owner-Occupied Residential Property

Under § 66-11-146(a), residential real property means a one-unit building intended or used as the owner’s principal residence, or a two-, three-, or four-unit building in which the owner intends to live or lives in one unit as the principal residence, together with the qualifying parcel improvements. Subject to subsection (b), only prime contractors have lien rights on such owner-occupied property. Remote contractors cannot acquire a lien merely by sending otherwise timely monthly notices.

Example: A homeowner contracts with a separate licensed general contractor for the homeowner’s principal residence. The general contractor hires a framing subcontractor and buys lumber. The framer and supplier are remote contractors and have no property lien under this rule, even if the general contractor fails to pay them. Their contract claims against their customer and any available bond rights remain separate questions. The homeowner paying the prime is not the legal test that creates the residential exclusion; the property and contract relationships establish it.

§ 66-11-146(b) addresses a distinct situation: a single dwelling intended as a person or family’s principal residence where the owner and general contractor are the same person, or a person controls both the owning entity and general contracting business. Liens then exist only for claimants in contractual privity with the owner or general contractor. This can protect a first-tier trade or supplier hired directly by that owner/general contractor. It does not open lien rights to every lower-tier claimant. Do not turn the owner-builder exception into a blanket exception for all remote contractors or every one-to-four-unit property.

On commercial property, larger multifamily work, or property outside the residential definition, the normal prime/remote rules must be evaluated. “Residential construction” in a building classification and “residential real property” in the lien statute are different definitions.

Commencement and Priority

Under §§ 66-11-104, 107, and 108, qualifying liens can relate back to the visible commencement of operations and share statutory priority. This is actual visible improvement activity under the statutory definition, rather than the contract-signing date or the date a later trade first arrives. Preliminary surveying, clearing, grading, or a delivery unconnected to actual incorporation should not be assumed to establish commencement without examining the statute and facts.

Illustrative priority problem: Permanent foundation excavation and footing construction visibly commence May 1. A lender records a deed of trust May 10. A licensed roofer begins its eligible work September 15 and properly preserves its lien. Assuming no earlier mortgage, subordination, or other priority exception, the roofer’s lien relates to May 1 rather than September 15. Thus recording the mortgage before the roofer arrives does not by itself establish mortgage priority. The claimant still must satisfy every notice and enforcement condition; relation back does not rescue an invalid lien.

Residential Notice to Owner and Advance Waivers

§ 66-11-203 requires a contractor about to contract directly with an owner for improvement of qualifying residential real property to deliver the prescribed notice before making the contract or commencing the improvement. It informs the owner of the contractor’s lien rights. This is different from a remote contractor’s monthly Notice of Nonpayment and from a later Notice of Lien.

Under § 66-11-124(b), a contractual provision purporting to waive a statutory lien right in advance is void as against public policy. A separate statutory mechanism in subsection (c) allows an owner or agent to record a qualifying payment bond for 100% of the prime contract price before work begins, removing remote contractors’ property-lien rights and substituting the statutory bond protection. Simply writing a waiver or saying that the prime “has a bond” is not that mechanism. Inspect the bond, amount, surety, recording, and timing.

Payment-related releases should identify the work, period, amount, exceptions, and whether the release is conditional on actual payment. Avoid signing a broader release than the payment justifies. A release of lien rights does not necessarily release every separate contract claim; the wording matters.

Remote Contractor’s Monthly Notice of Nonpayment

Under § 66-11-145, an eligible unpaid remote contractor gives written Notice of Nonpayment to both the owner and the prime contractor within 90 days after the last day of each month in which unpaid work, services, labor, or materials were furnished. The clock is month based, not a single 90-day allowance after the claimant finishes all work. Prime contractors do not use this monthly remote-contractor notice.

The notice identifies the claimant’s name and address, a general description of the furnishing, amount unpaid as of the notice, last furnishing date in connection with the notice, and a property description sufficient to identify the site. A combined notice can cover more than one unpaid month if it supplies the required information and is timely for each month. Combining months cannot revive a month whose deadline has passed. Keep invoices and delivery/work records supporting each amount; payments after notice should be reconciled to avoid overstating the debt.

Date example: March work uses March 31 as its month-end anchor. Ninety days later is June 29. April work uses April 30 and reaches July 29. May work uses May 31 and reaches August 29. A June notice can preserve March and April amounts if all requirements are met, but waiting until late July cannot revive March rights. These are calendar-day calculations; obtain the statutory time-computation rule for a deadline falling on a nonbusiness day rather than assuming a convenient extension.

Delivery and Evidence

§ 66-11-149 authorizes registered or certified mail with return receipt requested, hand delivery supported by sworn notarized proof, or commercial delivery with written proof of delivery. It does not make email or an electronic read receipt a general authorized substitute. The statute has service-completion presumptions, including three business days for qualifying mailing and one business day for overnight commercial delivery; do not assume last-minute mailing always completes service that day.

Create a notice file with the signed notice, recipient names and addresses, mailing or courier documentation, receipts, and proof of hand delivery if used. Confirm both required recipients received legally sufficient service. The monthly notice preserves only one part of the process: a remote claimant must still serve its Notice of Lien and commence timely statutory enforcement. Those later steps are taught in the next section.

Source check (October 13, 2026): Tennessee enacted lien-waiver prohibition, Public Chapter 197.