2010 Tennessee Code
Title 66 - Property
Chapter 11 - Mechanics' and Materialmen's Liens
Part 1 - General Provisions
66-11-142 - Bond to indemnify against recorded lien Recording bond Recording of contractor's payment bond.

66-11-142. Bond to indemnify against recorded lien Recording bond Recording of contractor's payment bond.

(a)  If a lien, other than a lien granted in a written contract, is fixed or is attempted to be fixed by a recorded instrument under this chapter, any person may record a bond to indemnify against the lien. The bond shall be recorded with the register of deeds of the county in which the lien was recorded. The bond shall be for the amount of the lien claimed and with sufficient corporate surety authorized and admitted to do business in the state and licensed by the state to execute bonds as surety, and the bond shall be conditioned upon the obligor or obligors on the bond satisfying any judgment that may be rendered in favor of the person asserting the lien. The bond shall state the book and page or other reference and the office where the lien is of record. The recording by the register of a bond to indemnify against a lien shall operate as a discharge of the lien. After recording the bond, the register shall return the original bond to the person providing the bond. The register shall index the recording of the bond to indemnify against the lien in the same manner as a release of lien. The person asserting the lien may make the obligors on the bond parties to any action to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond.

(b)  (1)  When a prime contractor or remote contractor has provided a valid payment bond for the benefit of potential lien claimants, a copy of that bond may be recorded, in lieu of the recording of another bond, to discharge a lien asserted by the lien claimants. A copy of the bond may, at the contractor's option, be recorded with the register of deeds in lieu of the bond provided in subsection (a), to discharge such a lien. Upon recording with the register of deeds, the contractor or owner shall notify the surety executing the bond and the lien on the property shall be discharged.

     (2)  The bond recorded pursuant to this subsection (b) shall:

          (A)  Be in a penal sum at least equal to the total of the original contract amount;

          (B)  Be in favor of the owner;

          (C)  Have the written approval of the owner endorsed on it;

          (D)  Be executed by:

                (i)  The original contractor as principal; and

                (ii)  A sufficient corporate surety authorized and admitted to do business in this state and licensed by this state to execute bonds as surety;

          (E)  Provide for payment of the lien claimant, whether the lien claimant was employed or contracted with by the person who originally contracted with the owner of the premises or by a remote contractor; and

          (F)  Provide for payment for extras, as defined in § 66-11-101, not exceeding fifteen percent (15%) of the prime contractor's contract price, if and to the extent the lien claimant is claiming extras.

(c)  The register of deeds may record any bond recorded under this section and return the original to the person providing the bond.

[Acts 1974, ch. 580, § 1; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-1144; Acts 1990, ch. 854, § 7; 1994, ch. 664, § 1; 1995, ch. 30, §§ 4-6; 2007, ch. 189, § 41.]  

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