What is a Release of Lien Bond?

A release of lien bond, or release of mechanic’s lien bond, removes a lien that has been placed on a property.

A mechanic’s lien can be placed on a property if the owner is alleged to owe money to a qualified lien holder. State court systems use liens to secure the amount in question until the issue is resolved.

Mechanics Liens are problematic to property owners as they can lead to issues with financing or selling of the property in question. Resolving disputes related to liens can be costly and take time. One way to remove a lien from a property before the dispute is resolved is to file a “Release of Mechanic’s Lien Bond”.


How Quickly Can I Get a Release of Lien Bond?

In some cases, the bond can be issued the same day it is applied for, but will typically take two to three days.


How Much Does the Bond Cost?

The premium charged for a release of lien bond varies depending on the amount of the bond. The bond amount is usually set by state regulations, so check your state or contact an agent to understand how the bond amount relates to the lien amount. For example, in California the bond amount must be 125% of the lien amount.

Collateral may be required in many cases depending on the circumstances of the lien and other underwriting factors. Collateral may be in the form of cash, irrevocable letter of credit, marketable securities, and real property.

In the case of a seller wishing to remove a lien on property to be sold, it may be possible use funds from escrow to provide the necessary collateral upon closing, thereby providing a collateral option without the use of cash out of pocket. The collateral is returned once the release of lien bond is closed. Contact us here if you need a release of lien bond and want to know more about this option.


What Documents Will I Need?

To apply for a release of lien bond, you will need an application, a collateral agreement form, and a copy of the recorded mechanic’s lien.

Contact us today and we can provide you with the application and collateral form, as well as answer any questions you may have. We’re here to help!