What is a Release of Mechanic’s Lien Surety Bond?
To understand a Release of Mechanic’s Lien Surety Bond, you must first understand what mechanic’s liens is for. A mechanic’s lien can be filed during a dispute between a contractor and property owner regarding payment for service provided. This allows the contractor to seek out, and claim rights to, the property of the owner, in an attempt to recoup the full value of their agreed upon compensation or costs of spent materials through its eventual foreclosure and sale.
Upon the eventual resolution of the legal proceedings, the issuing of a Release of Mechanic’s Lien Surety Bond then annuls the lien, allowing the property owner to reclaim full possession of their assets. These surety bonds assure that the contractor who originally filed the mechanic’s lien be fully awarded all payments due to them, in accordance with the court’s ruling.
Who is required to purchase a Release of Mechanic’s Lien Surety Bond?
A Release of Mechanic’s Lien Surety Bond, or Mechanic’s Lien Release Surety Bond, is required for those in charge of construction projects in the event of a mechanic’s lien being issued by a contractor.
What are the bond amounts for Release of Mechanic’s Lien Bonds?
Amounts for Release of Mechanic’s Lien Surety Bonds vary and are set by the local rules and statutes regulating the industry. Therefore, bond amounts and requirements will fluctuate from bond to bond. Please contact us with specific questions, and our knowledgeable underwriting staff will assist you.
How much does a Release of Mechanic’s Lien Surety Bond cost?
Pricing for Release of Mechanic’s Lien Surety Bonds varies, and your premium will be based on the following factors:
- Amount of the bond
- Term length of the bond
- Personal credit of applicant
Individuals with good credit can expect to pay between 1%-5% of the bond amount. Qualified applicants could pay as little as $100 annually for a $10,000 Release of Mechanic’s Lien Surety Bond. To find out how much your bond is going to cost, please complete our online application for your free, no obligation price quote.
Can I get a Release of Mechanic’s Lien Bond with bad credit?
Pacific Surety offers a wide range of approvals, regardless of credit, for Release of Mechanic’s Lien Surety Bonds. With our strong surety relationships, we have the ability to approve 99% of applicants, regardless of how bad their credit is. Our knowledgeable underwriting staff will work with you to ensure you receive the lowest possible pricing for your bond. Applicants with substandard credit can expect to pay 5%-10% of the bond amount in premium.
To see what rate you will qualify for, please complete our online application for your free, no obligation price quote.
Which states require this bond?
Pacific Surety proudly offers Release of Mechanic’s Lien Surety Bonds in all fifty states. Please contact us and one of our knowledgeable underwriters will assist you in purchasing your bond.
How can I purchase a Release of Mechanic’s Lien Surety Bond?
The first step to purchasing a release of mechanics lien bond is to complete our quick online application for your free, no obligation bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing. If you prefer to speak with our knowledgeable staff, please call 1-866-722-7873 and one of our Underwriters will assist you in applying for your bond.
After you receive approval, you must sign an indemnity agreement with the surety and provide payment for your bond premium. In most cases, we can issue bonds the same day we receive your signed documents and payment.
Which party is protected by Release of Mechanic’s Lien Surety Bonds?
A Release of Mechanic’s Lien Surety Bond protects the contractor. A lien is filed by a contractor on the owner’s property when there is a dispute over payment for services provided. The release of lien bond allows the owner to discharge the mechanic’s lien and gives back the legal right of the property to the owner. These bonds guarantees the contractor who placed the lien will be paid any payments along with interest should they win the case in a court of law.
If the principal (homeowner) chooses not to pay, a claim can be filed with the surety company for relief. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The principal is then required to reimburse the surety for all monies paid out, including any attorney fees incurred by the surety in the defense of the claim.