Why Tennessee Construction Law is Different (and Why Out-of-State Contractors Struggle Here)
By: Ubin Weeks
In construction, most payment disputes do not fail because the work was bad. They fail because time ran out. In Tennessee, missing a deadline can wipe out a claim before anyone ever talks about fairness.
Tennessee construction law is particularly unforgiving when it comes to deadlines. Two rules, in particular, cost general contractors, subcontractors, and suppliers millions of dollars every year. This is not because these rules are complicated, but because they are easy to miss. Tennessee’s statute of repose for construction claims and Tennessee’s 90-day lien notice requirement involve blink-and-you’ll-miss-it deadlines that cost parties time and again. Together, these laws create a one-two punch that can eliminate otherwise valid claims before anyone ever argues about the merits.
Out-of-state contractors often assume Tennessee will feel familiar. The accents may be similar, the projects look the same, and the contracts use the same industry forms. However, Tennessee construction law is far less forgiving than many neighboring jurisdictions. Tennessee relies heavily on statutory remedies, meaning many contractor protections exist only because the legislature created them. As a result, courts and agencies expect exact compliance with statutory requirements, not informal or industry-standard shortcuts. Courts will apply those statutes as written, even when the outcome feels harsh.
Think SEC football: the rulebook and the clock control everything.
Tennessee Lien Law
Tennessee law allows general contractors, subcontractors, and suppliers to file mechanics’ liens to secure payment for labor and materials. But for many project participants, especially those who do not contract directly with the owner (i.e., remote contractors), lien rights exist only if a Notice of Nonpayment is sent within 90 days of the last day of work or when the project was last furnished materials. T.C.A. § 66-11-148. Remote contractors must strictly comply with notice requirements to preserve lien rights. The practical takeaway is simple: many subcontractors and suppliers must send a compliant notice within 90 days, or their lien rights are gone forever.
Common 90-Day Notice of Nonpayment Mistakes:
1. Focusing on the date of the unpaid bill rather than the date of the work.
2. Failing to serve timely notice for unapproved change orders or extra work.
3. Failing to send the notice early enough to insure timely receipt.
4. Failing to include all the required information in the notice.
5. Failing to send the notice to both the owner and the prime contractor or sending it to an incorrect party.
6. Failing to serve separate notices for each month for which work is unpaid.
Tennessee lien law does not care about what your contract says. Lien rights arise by statute, not by agreement, and they exist only if the claimant strictly complies with Tennessee’s notice requirements. A lien arises when labor or materials improve real property as defined in the statutory provisions discussed above, but the lien is not self-executing. The claimant must take proper statutory steps to secure it, or the right is lost, no matter how strong your payment claim may be.
Tennessee’s Statute of Repose
Lien law controls how you get paid today. The statute of repose governs whether you can bring a claim at all tomorrow.
Tennessee’s statute of repose for construction-related claims imposes an absolute outer deadline on lawsuits arising from the design, planning, supervision, or construction of improvements to real property. By contrast, a statute of limitations runs from the discovery of the damage and limits how long a claimant has to file suit after that point. The statute of repose is therefore much harder to avoid.
In Tennessee, most construction claims must be brought within four years of substantial completion, with a limited one-year discovery extension in some circumstances. A hard cap in Tennessee will generally bar claims after five years. Once the repose period expires, the claim is dead. Courts will not inquire into the fault, severity, or fairness.
Owners and Developers
The biggest mistake is assuming that warranties, maintenance obligations, or ongoing relationships preserve your legal rights. Unfortunately, they do not. Once substantial completion occurs, the repose clock is running whether problems are visible or not.
Practically, you’ll want to treat the third year after substantial completion as the last safe window to identify and investigate defects. Here is where you can conduct targeted inspections of structural, envelope, and life-safety systems before the fourth year. Do not wait for failure to occur; latent defects discovered after the repose period are legally irrelevant. If an owner has not meaningfully evaluated potential defect claims before year four, it is already behind.
General Contractors
Make sure documents are complete and control the tail. General contractors often assume the statute of repose is primarily an owner issue. In reality, it is a power defense–but only if timelines are clear and documented.
Practically, clearly define and document substantial completion dates, ambiguity invites litigation. Be cautious about post-completion repair or “goodwill” work that could create factual disputes over completion timing. Do not assume indemnity provisions will survive indefinitely, they usually do not extend the statute of repose. Preserve records long enough to defend claims through the repose period, not just through final payment. A well-documented close-out file is often the difference between early dismissal and years or litigation.
Subcontractors and Suppliers
Do not assume you’re too small to be sued. Remote contractors are often surprised to learn that they are protected, and limited, by the same repose deadlines as prime contractors.
Practically, track when your scope was substantially complete, not just when the overall project finished. Understand that repair calls years later do not necessarily reopen liability, but sloppy records can undermine that. Coordinate with your attorneys early if defect allegations arise near the end of the repose period, timing controls strategy. Lastly, do not rely on upstream parties to protect your interests once deadlines approach. The statute of repose can be a shield, but only if you can prove when your work ended.
Tennessee’s rulebook always wins whether you’re ready for it or not! Tennessee construction law rewards discipline and punishes assumptions. It does not bend to industry customs, contract language, or good-faith delay. Lien rights exist only if the statute is followed exactly. Defect claims survive only if time is managed deliberately from substantial completion forward. For out-of-state contractors, the mistake is treating Tennessee like a familiar jurisdiction. For in-state players, it is forgetting how unforgiving the clock can be. The contractors and owners who avoid costly losses in Tennessee are not the ones with the best arguments after a dispute arises, they are the ones who respect the rulebook, track the deadlines, and act before time runs out.
Key Takeaways
In Tennessee, construction disputes are usually decided by deadlines, not by who did good work or who was treated unfairly; if you miss a deadline set by Tennessee law, your claim is likely gone for good. Lien rights only exist if the required 90-day Notice of Nonpayment is sent correctly and on time, and construction defect claims are cut off by the statute of repose once the clock runs out, no matter how serious the problem is or when it is discovered. Owners need to start looking for defects early, contractors must clearly document when the job is substantially complete and keep records longer than they think they need to, and subcontractors and suppliers must track their own work dates and required notices instead of relying on others. Bottom line: Tennessee construction law rewards people who calendar deadlines and act early, and it punishes assumptions–if you respect the clock, you protect your money.