66-11-124 - Waiver of lien Payment bonds. - Tennessee Statutes

66-11-124. Waiver of lien Payment bonds.

(a)  The acceptance by the lienor of a note or notes for all or any part of the amount of the lienor's claim shall not constitute a waiver of the lienor's lien, unless expressly so agreed in writing, nor shall it in any way affect the period for serving or recording the notice of lien under this chapter.

(b)  (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. Upon receiving the information, the executive director of the board shall notify the contractor within a reasonable time after receiving the information that the contract is against the public policy of this state and in violation of this section. If the contractor voluntarily deletes the waiver of lien provision from the contract and affirmatively states that the language will not be included in any future contracts to perform construction work in this state, no further action shall be taken by the board against the contractor unless a later complaint is filed against the contractor.

          (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.

          (C)  Notice of the revocation shall be sent by the board to the contractor's licensing authority in all states in which the contractor is licensed as a contractor.

          (D)  In any action for damages based on the waiver of a right of lien filed by a person solicited by the contractor, the person shall have the right to recover from the contractor reasonable attorney's fees and costs in connection with the enforcement of the lien.

(c)  Notwithstanding any other provision of this chapter, no liens by remote contractors are allowed under this chapter if, prior to any work or labor being provided or materials, services, equipment, or machinery furnished in furtherance of the improvement, the owner, or the owner's agent, provides a payment bond, equal in amount to one hundred percent (100%) of the prime contractor's contract price, in favor of the remote contractors who provide work or labor or furnish materials, services, equipment, or machinery in furtherance of the improvement pursuant to a contract. The payment bond shall be executed with sufficient surety by one (1) or more sureties authorized to do business in the state of Tennessee. The bond shall be recorded in the office of the register of deeds of every county where the real property to be improved, or any affected part, lies.

[Code 1932, § 7939; T.C.A. (orig. ed.), § 64-1124; Acts 2005, ch. 197, § 1; 2007, ch. 189, § 23; 2009, ch. 483, § 1.]