Category Archives: Mechanic Lien

How can small contractors and their customers benefit from Performance Bonds and Surety Bonds?

keep-your-cool-during-a-home-renovationEver watch HGTV (Home & Garden Television) and witness the horror stories left behind by shady contractors? Things like homeowners without kitchens or baths for months. Police recently arrested 45-year-old Cary Grimm on charges of grand theft for doing just that. Customers say the contractor disappeared without completing the work that was he was contracted for.

One couple said their home remodeling project turned into a nightmare after a few weeks’ delay turned into a half a year battle. The complaints which total nearly $90,000 based on over a dozen complaints by customers that came in after Grimm exhibited at a local home show. How could a surety bond aka performance Bond have helped? These bonds ensure a contractor will perform work required in a contract or winning bid.

Bonds provide small contractors and customers with numerous benefits. The surety bond is a form of protection against contractor default due to faulty workmanship, late delivery or not using specified materials. The surety company helps the contractor avoid costly delays and contract disputes if the sub-contract defaults with their portion of the job by non-performance.  Then the surety company will intervene to fulfill the contractor’s scope of work. When a project is bonded, there’s also an added layer of payment protection for workers and suppliers of the contractor.

Surety bonds help level the playing field, and allow a small contractor to compete in the free market, leading to lucrative contracting opportunities. Consumers and businesses feel more secure when hiring a bonded contractor.  A contractor’s bond and insurance are important forms of protection for anyone who is taking on a construction project.

Furthermore; to avoid a Mechanics Lien, a Payment bond is suggested.  Using this Surety Bond as a tool, gives owners assurance that all suppliers and sub-contractors are paid. Also suggested is an Ancillary bond to guarantee that non-material or performance requirements of a contract will be met. An example would be compliance with special terms, laws or regulations.

Call us to discuss your Performance, Bid, Ancillary and Payment bond requirements.

visit call 800-921-1008 or email


Mechanic Lien Bond AKA Bond Around a Lien

Mechanic’s Lien Bond AKA Bond Around a Lien, lien release bond , bonding lien off

What is a Mechanic’s Lien?

Mechanic’s lien is a mechanism used by contractors and suppliers to force payment of outstanding monies due from the owner, tenant or land owner. A Mechanic’s Lien will assure that the owner completes all required payments to the contractors participating in the project. It is also called a material man’s lien or supplier’s lien.


What is a Mechanic Lien Bond?

If a contractor allegedly receives no payment for products or services, he or she can file a Mechanic’s Lien which prevents the other party from selling or transfer property and it allows the contractor to sue the other party.


With a Mechanic Lien Bond, the surety company guarantees the claim in the event that the court enforces the payment of the claim. It guarantees that the payment will be made if the lien is not successfully contested.

If a subcontractor has put a mechanic’s lien on your property, you can get a Discharge of Mechanic’s Lien Bond to remove the lien from your property.

How Does a Discharge of Mechanic’s Lien Bond Work?

A discharge of Mechanic’s Lien Bond allows property owners to do with their property what they would if a lien was not present: sell the property, get further remodeling done, etc. In a way, it works as an extension of credit. The bond proves that the property owner has sufficient funds to pay the people involved.

The word discharge can cause some confusion. A Discharge of Mechanic’s Lien Bond does not extinguish the mechanic’s lien entirely. It discharges the lien from the property and attaches it to the bond.

The bond is usually issued at a percentage over the lien amount, depending on the state in which the lien was place.


Purpose of a bond to discharge a Mechanic’s Lien Bond

There are a few types of bonds that tie in with construction. Each of them serves an entirely different purpose.

Two common people that need to obtain a discharge bond are the property owner and the contractor who is obliged to discharge any mechanic’s liens filed by suppliers or subcontractors

It removes the mechanic’s lien from a real property and the mechanic’s lien then attaches to the bond until it is discharged some way.

Frequently Asked Questions

Q Is there only one person responsible?

 A: Sometimes. When building a multi-family property all owners could potentially be part of the process and everyone will be responsible for a portion of the claim.

Q: How long does a mechanic’s lien last?

A: Once filed, the mechanic’s lien will last for a period of one year.  Mechanic’s liens on private commercial projects and on public improvements may be extended for one additional year.

Q:   How do I satisfy a mechanic’s lien?

A:  A satisfaction of a mechanic’s lien can be filed with the County Clerk (or the public entity) where the mechanic’s lien was filed. That is after you either post the Bond or pay off the lien.

The following information should be included to insure a quicker response.

1) A complete court bond application – Will provide a basic overall of the bond being requested, as well as information on the principal requesting the bond.

2) Copy of the mechanic’s lien – A copy of the mechanic’s lien will provide information to the amount of the lien and parties claiming that payment still due.

Statistics recorded with Counterize - Version 3.1.4

Jose Ward | Bond Underwriter T: 212 566-1881 ext.110
Jose Ward | Bond Underwriter
T: 800 921-1008 ext.110