Overview of Mechanics Lien Bonds

Mechanics lien release bonds are an important tool for the collection of payments in the construction industry. They can be used in cases when a mechanics lien has been filed on a property due to a dispute over payment for construction services. By bonding a lien, the owner can release the property, while the settlement of the payment issue is guaranteed by the bond.

Why Do I Need This Bond?

If you are a property owner and a mechanics lien has been filed on your property, you can use a lien release bond, also known as ‘bonding off a lien.’

Contractors and suppliers can use a mechanics lien in order to seek outstanding payments for services and materials they have provided from a property owner or tenant. The lien is a powerful mechanism for blocking further actions on that property, such as a sale or transferring. It also allows the harmed parties to bring a lawsuit.

In the case when a property has a mechanics lien set, the owner can discharge the lien with the help of a surety bond. Then they can sell it, continue renovating it, or do as they have intended.

This does not remove the lien entirely but rather transfers the financial burden on the bond. From then on, the bond ensures that the contractor or supplier seeking their payment will receive their due monies if the case is proven in the dispute. The mechanics lien claim is thus transformed into a surety bond claim.

Do you have more questions about the way that surety bonds work? You can check out our detailed ‘What is a surety bond’ guide.

Need more information? Don’t hesitate to contact our bonding specialists at (866)-450-3412.

What Is the Bond Cost?

The mechanics lien bond cost depends on the bond amount that you have to provide. This, in turn, is set on the basis of the lien’s amount on a case-by-case basis.

The actual price is a fraction of the required bond amount. It is known as the bond premium and depends on a number of different indicators.

Factors That Determine Your Bond Premium

The factors that matter the most in the formulation of your bond cost include:

  • Personal credit score of the property owner
  • Personal and business financial profile

By examining these indicators, the surety aims to assess how likely it is for the property owner to pay off the lien. The more solid your financial profile is, the smaller your bond premium would be. The typical rates for mechanics lien bonds are between 2% and 5%.

It is likely that you would need to post also collateral at the time of the bonding.

How Do Bond Claims Work?

In the case of mechanics lien bonds, the claim that is made on a lien is transformed into a surety bond claim. This is the mechanism through which harmed parties can demand fair reimbursement from the bonding.

The penal sum of the bond that you have provided is the maximum compensation that can be provided. The full responsibility for the claim and all relevant costs remains with the bonded party.

How to Get a Mechanics Lien Bond

Do you want to start your bonding process? You can fill in the form through the banner below, and we will send you a free quote.

Not ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

Need more information about mechanics lien bonds? You can reach us at (866)-450-3412.


About us:
Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.