The Vault - Questions and Answers

I have encountered a recorded Notice of Completion in a situation where a property owner contracted with a general contractor. The bank which has the first deed of trust has prepared and filed a Notice of Completion which is signed "XYZ Bank by John Doe, President." The Notice of Completion includes an acknowledgement indicating that the Bank is the bargainor and that Mr. Doe as President executed the instrument for the bank by signing his name as president. TCA §66-11-143(a) says that the owner, purchaser or contractor may register the notice of completion. My question is "Since the bank (rather than the owner, purchaser or contractor) executed the notice of completion, is it effective to cut off the general contractor's lien rights against the owners' real estate?"

DATE:	05/31/03
SUBJECT/TOPIC:	NOTICES OF COMPLETION
	Q:	I have encountered a recorded Notice of Completion in a situation where a property owner contracted with a general contractor. The bank which has the first deed of trust has prepared and filed a Notice of Completion which is signed "XYZ Bank by John Doe, President." The Notice of Completion includes an acknowledgement indicating that the Bank is the bargainor and that Mr. Doe as President executed the instrument for the bank by signing his name as president. TCA §66-11-143(a) says that the owner, purchaser or contractor may register the notice of completion. My question is "Since the bank (rather than the owner, purchaser or contractor) executed the notice of completion, is it effective to cut off the general contractor's lien rights against the owners' real estate?"
	A:	You pose an interesting question. The definition of "owner" is TCA 66 11 101(11) is arguably broad enough to cover a mortgagee. But because the statute is strictly construed, I'd be reluctant to rely on the notice of completion that you describe. I have one other thought. Substantial completion is not enough. Everything must be finished. Thus, I often wonder if one can ever safely rely on a Notice of Completion.
		Prev	Home	Next