Tennessee Lien Waiver Rules
- Rules At A Glance
No Specific Form
Tennessee does not require that lien waivers be in any specific form in order to be effective.
Notarization Not Required
Tennessee does not require that a lien waiver be notarized, but it must be expressly agreed to in writing.
Cannot Waive Rights in Contract
Tennessee specifically does not allow mechanics lien rights to be waived in a contract. Further, if a party attempts to violate this provision, they can be subject to penalties and lose their license.
Can Waive Rights Before Payment
As long as the wavier is not in the contract, Tennessee does not prohibit waiving lien rights prior to payment.
Tennessee lien waivers are exchanged all the time on construction projects in that state, just like they are everywhere else. But, unlike many other states, where a failure to follow lien waiver rules can just result in an invalid or ineffective lien waiver, the law regarding lien waivers in Tennessee provides for more strict consequences.
In Tennessee, “no-lien” clauses or other provisions in a contract that attempt to waive lien rights prior to labor or materials being furnished are prohibited. And Tennessee lien waiver law provides strict consequences for any contractor who attempts to violate that restriction.
In fact, TCA § 66-11-124(b) makes it possible for a contractor to lose their license if they make an attempt to violate the restriction. Wow.
That statutory provisions states that;
“(1) Any contract provision that purports to waive any right of lien under this chapter is void and unenforceable as against the public policy of this state.
(2)(A) If a contractor solicits any person to sign a contract requiring the person to waive a right of lien in violation of this section, the person shall notify the state board for licensing contractors of that fact…(B) If the contractor does not delete the waiver of lien provision, then the executive director shall schedule a hearing for appropriate action by the board. If the board finds after a hearing that the contracts of the contractor are in violation of this section, the contractor’s license shall be immediately revoked.”
Just as it is crucial for construction participants in Tennessee to make sure that their contracts don’t attempt to waive lien rights in advance, it is also important to make sure any lien waiver signed and exchanged is read carefully. Tennessee doesn’t require lien waivers to follow any particular form, or otherwise regulate the content of lien waivers. This means that, provided the waiver is requested after work has been provided, it can say basically anything. This means that it is possible to waive more than just lien rights, or waive more lien rights than desired, if the waiver isn’t looked over carefully.
