Discharging a Mechanic's Lien by Bond

What is a Mechanic's Lien Discharge Bond?

New York Lien Law § 19(4), a Bond Discharge is a mechanism for temporarily removing a Mechanic's Lien from the title of the property. The property owner or contractor can file a Bond against the Mechanic's Lien. A Bond deposits 110% the value of the Lien with the courts. 

The bond guarantees the Lienor any payment that is still due to them with interest should they win the case in a court of law.

What if a Mechanic's Lien is filed against you?

If a Mechanic's Lien was filed against you; one option you have is to file a Bond Discharge against the Mechanic's Lien. The Bond temporarily removes a Mechanic's Lien from the title of the property. This gives the owner the ability to continuing financing the project. 

Once a Surety Bond is obtained, Speedy Lien handles the filing of the Bond with the proper jurisdiction and service upon the parties. 

Upon filing of the Bond, the Lien is removed from the property and now "attached" to the Discharge Bond. A Discharge of a Lien by bond or deposit is not an admission of guilt or fault

Discharging a Lien filed against you

A Lien Discharge Bond is the most common and effective way of discharging a Lien. 

If a Lien was filed against you, you have the right to file a Bond Discharge a/k/a "Bonding Off" to temporarily remove the Lien Claim. 

See below for steps to file a Bond against a Lien.

What is the process of Bonding off a Lien filed against you?

Bonding off a Mechanic's Lien is a two step process.

The first step is obtaining the actual surety bond. This is handled through a surety company. The surety company will be able to advise on the cost to receive the actual bond. Usually it is a fee of 2-5% of the total value of the Bond, depending on the “risk.”

Once the Surety Bond is issued, Speedy Lien handles the filing of the actual Bond with the courts. 

Can a Lien still be foreclosed after Bonding?

If a Lien was Bonded, the Lienor still has the right to file a Foreclosure Action in the same manner as a Lien that has not been Bonded. 

An owner, who would be a necessary party in a lien foreclosure action, is not a necessary party once the lien has been bonded. Instead, the lienor may name the surety as a defendant, ensuring there is a solvent party to pay the judgment if the lien claim is proved.

File a Bond Discharge
What happens after the Bond is filed?

Once the Lien is Bonded off, the property title is free and clear of the Mechanic's Lien.

A Discharge of a Lien by bond or deposit is not an admission of guilt or fault and the lienor is not automatically entitled to payment. Additionally, the Lien must be enforced via enforcement for the lienor to recover from the fund.

For additional information, please click Lien Law by State to learn about your state’s Lien Laws. If you have any additional questions, please call Speedy Lien to learn more about your Lien rights. 

We are not a law firm and our employees are not acting as your attorney. The information contained in the Site is general legal information and should not be construed as legal advice to be applied to any specific factual situation.