Condo owners usually think about their own unit and the association's master policy. A less familiar risk is a lien that lands on many units at once, such as a court judgment against the association or a contractor who was not paid for work on the building. Tennessee Code § 66-27-416, part of the Tennessee Condominium Act of 2008, sets the rules for that situation.
| Rule | What § 66-27-416 says |
|---|---|
| Judgment against an unincorporated association | Each owner's liability is limited to their undivided percentage of the common elements |
| Creditor with a security interest in common elements | Must go against the common elements only |
| Liens covered | Liens other than a deed of trust or mortgage, including judgment liens and work or materials liens, on two or more units |
| Your option | Pay the amount attributable to your unit; the lienholder must promptly release your unit |
| How your share is figured | By your common expense liability compared with all units subject to the lien |
| After you pay | The association may not assess or lien your unit for that lien's common expenses |
| Recording | A judgment against the association is indexed in the name of the condominium and the association |
Source: Tennessee Code § 66-27-416. Older condominiums may fall under a different statute: If your Tennessee condo was created before 2009, an older state law may govern how the building is insured.
Liens that land on several units
The statute applies when a lien other than a deed of trust or mortgage becomes effective against two or more units. It names judgment liens and liens attributable to work performed or materials supplied, which is the language that covers an unpaid contractor or supplier. That can happen whether the lien was perfected before or after the condominium was created.
You can pay your share and get out from under it
An owner of an affected unit may pay the lienholder the amount of the lien attributable to that unit. When the lienholder receives the payment, it must promptly deliver a release of the lien covering that unit. The amount is proportionate: it follows the ratio of your unit's common expense liability to the common expense liabilities of all the unit owners whose units are subject to the lien. Your declaration sets those percentages, so pull it before you call anyone.
The statute also protects owners who pay. After payment, the association may not assess or have a lien against that owner's unit for any portion of the common expenses incurred in connection with that lien. You do not pay twice. This matters most when you are selling or refinancing and a title search turns up the lien.
Judgments against the association
If the association is unincorporated, a unit owner's liability for a judgment against it is limited to the percentage of the judgment equal to the owner's undivided percentage ownership in the common elements. If the association has given a creditor a security interest in the common elements, that creditor must exercise its rights against the common elements only. A judgment against the association must be indexed in the name of the condominium and the association, which is where a title examiner will look.
Where insurance fits
Liens and judgments usually trace back to an uninsured or underinsured problem: a liability claim larger than the association's coverage, or repair work the association could not pay for. Tennessee also lets associations assess owners for uninsured costs and lien units that do not pay: Tennessee condo law lets your association bill you for uninsured damage and put a lien on your unit if you do not pay. That is why many condo owners ask whether their HO-6 includes loss assessment coverage and what its limit is. Coverage varies by policy, so read your own forms.
A short checklist for condo owners
- Read the association's master policy summary and ask about its liability limit: Tennessee’s condo law sets an 80% master-policy floor, and your HO-6 still has to fill the gaps.
- Know who repairs what in your building: Tennessee condo law makes the association repair the common elements and each owner repair their own unit unless the declaration says otherwise.
- Check your HO-6 declarations for loss assessment coverage and its limit.
- Buying a unit? Ask for the resale certificate and its insurance information: Before buying a Tennessee condo, you can get the association's insurance types, limits, and deductibles in writing within 10 business days.
- If a lien appears, get the declaration percentages and a written payoff for your unit's share before paying.
This article is informational only. It summarizes a Tennessee statute and is not legal advice. It does not promise coverage, eligibility, or any outcome; your declaration, your policies, and the facts control. Talk with a Tennessee attorney about any specific lien.
Related reading from All Seasons
- Tennessee condo law lets your association bill you for uninsured damage and put a lien on your unit if you do not pay.
- Tennessee condo law makes the association repair the common elements and each owner repair their own unit unless the declaration says otherwise.
- Tennessee’s condo law sets an 80% master-policy floor, and your HO-6 still has to fill the gaps.
- Before buying a Tennessee condo, you can get the association's insurance types, limits, and deductibles in writing within 10 business days.
- Tennessee condo law says your HO-6 has to cover the upgrades the master policy can skip.
- After a Tennessee condo loss, the master policy claim is adjusted with the association, and the money must go to repairs first.
- If your Tennessee condo was created before 2009, an older state law may govern how the building is insured.
Free policy review
All Seasons Insurance Group offers a free personal policy review. Call 865-263-1400 or visit asigtn.com/get-a-quote/. This article is informational only and does not promise coverage or eligibility; your policy forms control. Seasons change. So should your coverage.
Can a lien against my condo association end up on my unit?
Yes. Tennessee Code § 66-27-416 addresses liens other than a deed of trust or mortgage, including judgment liens and liens for work or materials, that become effective against two or more units.
Can I pay off just my unit's part of the lien?
Yes. An affected owner may pay the lienholder the amount attributable to their unit, and the lienholder must promptly deliver a release of the lien covering that unit.
How is my share of the lien calculated?
It is proportionate to the ratio of your unit's common expense liability to the common expense liabilities of all unit owners whose units are subject to the lien.
Can the association bill me again for the same lien after I pay?
No. After payment, the statute says the association may not assess or have a lien against your unit for any portion of the common expenses incurred in connection with that lien.
Am I personally liable for a judgment against the association?
For an unincorporated association, a unit owner's liability is limited to the percentage of the judgment equal to their undivided percentage ownership in the common elements.
What if a lender has a security interest in the common elements?
If the association granted a creditor a security interest in the common elements under § 66-27-412, that creditor must exercise its rights against the common elements only.
Does my HO-6 policy pay for this?
It depends on your policy. Many owners ask about loss assessment coverage and its limit, but coverage varies, so review your own HO-6 forms with your agent.
How can All Seasons help after reading this?
Call 865-263-1400 or visit asigtn.com/get-a-quote/ for a free personal policy review. Informational only; no coverage promises. Seasons change. So should your coverage.
