Home>Levelset Community>Legal Help>I'm a subcontractor. In TN. the G.C. is saying he is not paying any invoice not submitted before the house is closed, or 90 days after the work was completed. Is this legal?

I'm a subcontractor. In TN. the G.C. is saying he is not paying any invoice not submitted before the house is closed, or 90 days after the work was completed. Is this legal?

TennesseeMechanics LienPayment DisputesRecovery OptionsSlow Payment

I can't get paid. even invoices that were sent before closing. How late can an invoice be and still be valid? I have suppliers that sent me late(3-6 months) invoices all the time.

1 reply

Jun 3, 2019
I'm sorry to hear that you've been having payment trouble. First: if a contractor is required to make payment for work, the closing of a house or passing of 90 days will not eliminate their obligation to make payment. However, it sounds like the contractor described above is attempting to tie their alleged invoice deadline requirements to Tennessee's mechanics lien laws. So, let's look at (1) Tennessee's lien laws (and why they may or may not be relevant), (2) ways to speed up payment, and finally at (3) other recovery options that might be helpful to collect payment if a mechanics lien is unavailable.

In Tennessee, lien rights are not available for subs and suppliers on a residential project when they're hired by someone other than the owner of the property. Of course, note that there can be some wiggle room as to what's considered "residential" property - particularly when the owner of the property doesn't actually reside there, and for some multi-family properties. For commercial projects, a mechanics lien claimant hired by someone other than the property owner must file their mechanics lien within 90 days of the completion of the project. After that time, a valid and enforceable mechanics lien may not be filed. Further, many construction companies assume that once a property has been sold, there's no way to file a mechanics lien on that property (and that assumption may or may not be wrong, depending on the state and circumstances). So, it might make sense to assume that a contractor would try and claim that they don't have to make payment if the subcontractor or supplier who's unpaid couldn't file a mechanics lien. But, as mentioned above, the right to payment persists, regardless of whether a lien could be filed.

When payment is coming slowly or not coming at all, the first step should generally be to try and talk it out with the customer and/or the project's general contractor. Often, merely discussing the matter without any heated tempers will serve to resolve the issue. But, if talking it out doesn't get things back on track, it may become time to leverage rights into faster payment. Specifically, sending a document like a Notice of Intent to Lien to the project's contractor and property owner can go a long way to speed up payment - regardless of whether a lien claim can or will be filed. Nobody likes dealing with mechanics lien claims, and by sending a threat of lien to the owner as well as the contractor, a potential claimant can put extra pressure on their contractor to resolve the issue.

Further, threatening some other claim, such as legal action (like for breach of contract, unjust enrichment, or some other legal theory) could be effective, particularly when sent via an attorney. Of course, if threats to lien or take legal action aren't effective - actually pursuing a lien claim or some legal action could always work to force payment.

In a situation where a lien claim isn't available to speed up payment, there are always other options for recovering payment. You can learn more about those here: Can’t File a Lien? Here Are Some Other Options For Recovery.

For more information on Tennessee's lien laws, this resource will help: Tennessee Lien and Notice Overview and FAQs.
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