Restore verse in the Mechanic's Lien effortlessly

Aug 6th, 2022
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How to Restore verse in the Mechanic's Lien

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If builders contractors and suppliers have not been paid, they can file a mechanics lien on a property to ensure they get paid for their services and materials. When a mechanics lien is filed on a property, the property owner cannot do anything with the land or building. To resume action and discharge the lien, a property owner can get a Discharge of Mechanics Lien Bond. A Discharge of Mechanics Lien Bond allows property owners to do with their property as they would wish as if the lien were not present. The bond guarantees that the property owner will pay the contractor all monies owed upon final determination by the court. If the property owner does not pay the contractor, the contractor is protected by the bond and compensated. In this way, a Discharge of Mechanics Lien Bond does not entirely extinguish the lien; it just removes the lien from the property and places it on the bond. The bond amount will always be set at at least 110% of the lien face value. To get bonded, you wi

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A lien is valid for one year, unless a lienor files a lawsuit to enforce the lien prior to the expiration of the year. An owner has a right to file a Notice of Contest of Lien during the one-year period. Upon the filing of a Notice of Contest of Lien, a lienor must file a lawsuit to enforce the lien within 60 days.
The cost for these bonds is between 2-3% of the value of the lien inclusive of court costs. So if a mechanics lien is filed for $500,000.
In such cases, owners can seek to bond off a mechanics lien. In plain terms, this means an owner can seek to substitute a surety bond for the underlying property in a mechanics lien claim. Basically, the surety bond replaces the property as security for the claim.
Court Petition to Release the Property Lien If the lien claimant doesnt remove the invalid lien, and the time has expired to record the mechanics lien and take action to foreclose, you may petition the court for a decree to release the property from the lien.
When a lien is bonded off, a payment bond is available to pay off the lien. This provides a guarantee for payment to the construction firm and allows the property owner to be able to sell, finance or transfer the property without fear of a lien on the title.
Lien release bonds can be an effective way for owners to free their property from lien claims, enabling them to refinance or sell the property. However, it doesnt free them from the obligation to pay the debt. It simply substitutes one form of payment security for another.
The process of bonding off a mechanics lien starts after a claimant has filed a mechanics lien. After the claim is made, a general contractor or a property owner can contact a surety bond company to purchase a surety bond that replaces the value of the lien that was filed against the property.
The cost for these bonds is between 2-3% of the value of the lien inclusive of court costs. So if a mechanics lien is filed for $500,000.

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