Tagged: Mechanics Lien
To contest a mechanical lien.
When a mechanics lien has been filed, an owner will generally have a few avenues for contesting that lien filing. We’ll dive into that below, but this resource should be helpful here: A Mechanics Lien Was Filed on My Property – What Do I Do Now?
Flaws that might render a Tennesee mechanics lien claim invalid
When a mechanics lien is filed against their property, a Tennessee owner can challenge that lien filing – particularly when there are obvious flaws with that lien filing. If the lien was fraudulently filed, excessive, or even if there are relatively smaller issues with the claim, that lien claim might be deemed invalid and unenforceable.
Specifically, § 66-11-139 of Tennessee’s lien statute states that a lien claimant will not be permitted recovery and may actually be liable to the owner if their lien has been willfully or knowingly exaggerated. Further, § 66-11-206 states that a lien claimant who has filed a flawed lien claim or has willfully, knowingly and unlawfully falsified part of the lien claim may be charged with a Class B misdemeanor. Plus, under that section, an owner will be able to pursue other damages against the lien claimant too.
How to challenge a Tennessee mechanics lien
There are a few different ways an owner can “challenge” a filed lien claim.
Notifying the lien claimant of the flaws with their claim, demanding release of the lien
While an “unofficial” challenge, identifying the flaws with a filed lien claim, notifying the lien claimant of those flaws, and demanding the release of the lien is often a good first step. This provides the lien claimant an opportunity to remove their lien before the dispute escalates, and if the claimant complies, the owner can save a lot of time, money, and energy they might otherwise expend while challenging a lien claim.
Further, coupling the demand for release with threats of legal action that will be taken if the lien isn’t released can help here too. This is especially true when sent via attorney letter.
Sending a demand for lien enforcement
If a Tennessee owner sends a written demand for lien enforcement pursuant to § 66-11-130 of the Tennessee mechanics lien statute, the lien claimant must enforce their lien within 60 days of service of that notice. Otherwise, their lien will be forfeited.
Demanding for a lien enforcement suit may seem counterintuitive, but it acts sort of like a game of chicken. The owner forces the lien claimant to make a move on their claim and shortens the lifetime of the lien in the process. Usually, the lien claimant will have a full year to enforce their lien. By shortening the enforcement period to a mere 60 days, this puts pressure on the lien claimant to decide how they want to proceed.
Plus, in a situation where the lien claim is clearly flawed, the claimant might not be willing to enforce their lien. And, even if they do, challenging a lien claim usually requires legal action anyway – so an owner would find themselves in a lawsuit over the lien either way.
Bonding off a Tennessee mechanics lien claim
Bonding off a mechanics lien claim won’t make the claim disappear entirely, either. However, when a lien is bonded off, it’s discharged from the property title – so, the owner’s title is no longer at risk. Of course, the lien claimant can still pursue recovery against the bond.
But, much like with the above section, bonding off a Tennessee lien claim forces the claimant to take action on the lien claim. In order to pursue recovery on a bonded off lien, the claimant must file suit against the surety bond which took the lien’s place. And, as mentioned above, when a claimant knows their lien is flawed – they’ll likely be less willing to enforce their claim.
Challenging a filed lien with legal action
Finally, an owner can challenge a lien claim by filing an action with the court. Nobody likes a lawsuit, byt it may be the most effective way to get a mechanics lien tossed aside. Plus, if successful, the owner may also be entitled to damages and attorney fees.
While minor errors might not be enough to upend an otherwise valid lien claim, more serious issues can create a lot of problems for a lien claimant (including, potentially, criminal penalties – as mentioned above).
Ultimately, for the most clarity on what options may be successful to challenge a mechanics lien that’s been filed on your property, it’d be wise to consult a local Tennessee construction lawyer. They’ll be able to review the claim and your circumstances, then advise on how best to proceed.