Preservation of Priority of Lien for Subsequent Purchasers or Encumbrancers — Abandonment — Lien on Structure With Water Furnished by Well — Form for Notice of Lien

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  6. Preservation of Priority of Lien for Subsequent Purchasers or Encumbrancers — Abandonment — Lien on Structure With Water Furnished by Well — Form for Notice of Lien

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  1. In order to preserve the priority of the lien provided by this chapter as of the date of its attachment, as concerns subsequent purchasers or encumbrancers for a valuable consideration without notice of the lien, though not as concerns the owner, the lienor, who has not recorded the lienor's contract pursuant to § 66-11-111, is required to record in the office of the register of deeds of the county where the real property, or any part affected, lies, a sworn statement of the amount for, and a reasonably certain description of the real property on, which the lien is claimed. The recording party shall pay filing fees, and shall be provided a receipt for the filing fees, which amount shall be part of the lien amount. Recordation is required to be done no later than ninety (90) days after the date the improvement is complete or is abandoned, prior to which time the lien shall be effective as against the purchasers or encumbrancers without the recordation. The owner shall serve thirty (30) days' notice on prime contractors and on all of those lienors who have served notice in accordance with § 66-11-145 prior to the owner's transfer of any interest to a subsequent purchaser or encumbrancer for a valuable consideration. If the sworn statement is not recorded within that time, the lien's priority as to subsequent purchasers or encumbrancers shall be determined as if it attached as of the time the sworn statement is recorded.
  2. A building, structure or improvement shall be deemed to have been abandoned for purposes of this chapter when there is a cessation of operation for a period of ninety (90) days and an intent on the part of the owner or prime contractor to cease operations permanently, or at least for an indefinite period.
  3. Any other provision to the contrary notwithstanding, any lien acquired under contract executed on or after April 17, 1972, by virtue of § 66-11-141, may be filed within ninety (90) days after completion of the structure that is, or is intended to be, furnished water by virtue of drilling a well.
  4. The statement provided for in subsection (a) may be in substantially the following form:

    NOTICE OF LIEN State of  County of   being first duly sworn, says that  , the Lien Claimant, furnished certain material or performed certain work or labor in furtherance of improvements to the real property hereinafter described, in pursuance of a certain contract, with  , [the owner, prime contractor, remote contractor, or other person, as the case may be]. The first of the work or labor was performed or the first of the material, services, equipment, or machinery was furnished on the   day of  ,   (year). The last of the work or labor was performed or the last of the material, services, equipment, or machinery was furnished on the   day of  ,   (year), and there is justly and truly due Lien Claimant therefor from  , [the owner, prime contractor, remote contractor, or other person, as the case may be] over and above all legal setoffs, the sum of   dollars, for which amount Lien Claimant claims a lien under T.C.A. §§66-11-101, et seq. on the real property, of which   is or was the owner, which is described as follows: Lienor [Notary Acknowledgment]

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Code 1932, § 7919; Acts 1972, ch. 747, §§ 1, 3; 1977, ch. 373, § 1; T.C.A. (orig. ed.), § 64-1112; Acts 1990, ch. 854, § 3; 2007, ch. 189, § 12.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Bankruptcy, § 8; 18 Tenn. Juris., Mechanics' Liens, §§ 14, 15, 18.

Law Reviews.

Creditors' Rights and Security Transactions — 1954 Tennessee Survey, 7 Vand. L. Rev. 799.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 193 (1979).

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).


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