Tenn. Code Ann. » Tenn. Code / Title 66 / Chapter 34 / Part 3
Tennessee Code Annotated

Tenn. Code Ann. § 66-34-304 (2026)

Payments to be held in trust by prime contractor

✓ current as of May 2026
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Any sums received by the prime contractor as payment for work, services, equipment, and materials supplied by the remote contractor for improvements to real property must be held by the prime contractor in trust for the benefit and use of the remote contractor, and are subject to all legal and equitable remedies.

Amended by 2020 Tenn. Acts, ch. 749, s 26, eff. 7/1/2020.

Acts 1991, ch. 45, § 1.

Notes of Decisions
Cited in 6 cases (3 in the last 5 years), 2006–2023 · leading case: Westview Investments, Ltd. v. US BANK NAT. ASSOC., 138 P.3d 638 (Wash. Ct. App. 2006).
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Westview Investments, Ltd. v. US BANK NAT. ASSOC., 138 P.3d 638 (Wash. Ct. App. 2006). “02 (2005); Md.Code Ann., Real Property § 9-201-204 (2006); Del.”
Westview Investments, Ltd. v. U.S. Bank Nat'l Ass'n, 133 Wash. App. 835 (Wash. Ct. App. 2006). “Stat. § 799.02 ; Md. Code Ann., Real Prop. §§ 9-201 to -204; Del.”
Interstate Plywood Co. v. Blankenship (In re Blankenship), 525 B.R. 629 (Bankr. N.D. Miss. 2015). “Tenn. Code Ann. § 66-34-304 . However, § 66-34-702 provides that The provisions of this chapter [chapter 34 — the Prompt Payment Act of 1991] shall not apply to contracts for the construction of, or home improvement to, any land or building, or that portion thereof which is used…”
Upper Cumberland Islamic Soc'y v. Mayer (Bankr. E.D. Tenn. 2023). · cites it 12× “See Tenn. Code Ann. § 66-34-304 . As it existed when the Contract was executed in February 2019, the statute provided the following: 38 A greater “trust” relationship is also required for fraudulent causes of action under state law.”
The Strauss Co., Inc. v. Jarrett Builders, Inc. (Bankr. E.D. Tenn. 2021). · cites it 8× “pursuant to Tenn. Code Ann. § 66-34-304 , the funds were never the property of Strauss and the transfer of those trust funds to Jarrett Builders, Inc.”
Clarksville Towers, LLC v. John Straussberger (Tenn. Ct. App. 2021). · cites it 4× “” Tenn. Code Ann. § 66-34-304 (2015).5 We note, however, that the plain language of § 66-34-304 addresses only the relationship between the contractor and its subcontractors or materialmen.”
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