Lien Bond

A lien bond is applicable in almost every part of the globe. In the United States though, the term lien bond has a broader definition. In general, a lien is a legal claim against property in order to secure a debt.

A lien bond is one of the most important tools for a subcontractor in order to ensure payment. In the United States, liens can be entered into either voluntarily or involuntarily. A lien bond secures payment of debts owed to construction subcontractors for the value of work they performed and materials furnished, on a construction project, in the event of non-payment. These are quite common in the United States, and generally arise by state law based on the consent of the landowner to have his or her land improved.

A lien bond is a pact between two people or institutions. The two parties who are involved are called lienor and lienee. The owner of the property, who is offering the property as collateral, is called the lienor. The person awaiting payment against the debt, who accepts the property as collateral, is called the lienee.

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Mechanics Lien Release Surety is a surety bond which is important for owners involved in construction projects. A lien is submitted by a contractor on the owner’s property when the contractor and owner are in conflict with each other over payment for services provided. The lien acts as a medium through which the contractor is able to seek payment by obtaining the property, and eventually foreclosing on it in order to secure the value of the services or materials that they are looking to compensate.

A Release of Lien Bond is a legal bond which is required by a person who wants to discharge a lien against real estate. They are required of general contractors who are looking to sell a property they have obtained as payment, but may still have a lien on them.

To seek the Release of Lien Bond, the following documentation must be provided:

  1. Completed application
  2. Copy of the court order indicating plaintiff’s name, defendant’s name and case number
  3. Personal financial statement
  4. Detailed explanation regarding the dispute and any supporting documentation

Once all the information has been submitted, underwriters review the information. Generally, the release of lien bonds is uniform nationwide. But, the release of lien bonds in Vermont is a bit different. As per Vermont law, lien rights cannot be waived before labor is performed or materials are supplied. Any contract provision requiring such is voided. A pay-if-paid clause does not prospectively waive lien rights, as the law does not require that a present right to payment exist as of the date of lien filing. A lien must be filed within 180 days of the date that payment is due for materials or services.

A notice of purpose should be in writing and its hard copy should be given to the heir (not sure which word they are looking for here). Appropriately, the notice shall mention the date since payment was due. It prevents the owner from selling the land before payment, without disclosure to the purchaser.

For decades, we have worked hard to ensure a history of producing successful bonds and are determined to provide our clients the best service possible. We provide services for different types of surety bonds, such as license bonds, fidelity bonds, guardian bonds, probate bonds, bid bonds, court bonds, construction bonds, and many more.

Get your free quote today by using our Lien bond application form.

If you have any questions, please contact us for help.