I have a fake mechanics lien on my home and feel like my hands are tied as I am being blackmailed by the sub. If I purchase a mechanics lien bond so I can sell the house, will the sub be automatically paid? Will he be made aware that I put this bond together? What happens to the money in the bond that is not claimed? How does this process work?
I assume that the renovation is for your house, and that your house is your homestead. For the house to be your homestead, the house has to be titled in your name and you must live there. The contractor that contracted with you is called the "original contractor" under Chapter 53 of the Texas Property Code (which governs the propriety of mechanic's liens). If the property at issue is your homestead, then for a contractor to be entitled to file a valid mechanic's lien against your homestead, he would have to comply with Chapter 53 of the Texas Property Code. Among the requirements are a written contract signed by the owners of the homestead (husband and wife), certain homestead warnings, and filing of the contract with the county clerk. Those formalities do not usually happen. Without them, any attempted mechanic's lien filing would be invalid.
If the original contractor did not properly perfect a homestead mechanic's lien contract, then no contractor, subcontractor or supplier can file a valid mechanic's lien against your homestead. You should write a letter by certified mail to the lien claimant to demand that the lien be released, pointing out that the property is your homestead, and that the original contractor has not perfected a homestead mechanic's lien. If the lien claimant does not voluntarily release the lien, he could be liable for a fraudulent lien under Chapter 12 of the Texas Civil Practice & Remedies Code. Chapter 12 can award damages of $10,000 or actual damages whichever is greater, plus attorney's fees.
You can also demand that the lien be released under Section 53.160 of the Texas Property Code, which provides for a summary procedure (no trial necessary) for the removal of an invalid lien on someone's homestead.
If you secure a bond to indemnify against lien, the lien is released from your property, and then attaches to the bond. The surety will not pay the lien claimant until there is a judgment directing the surety to pay. The lien claimant would have to file suit within one year of receiving notice of the bond filing with the county clerk. A lot of lien claimants never file suit, and eventually the bond is discharged, and any collateral that you posted to secure the bond would be returned (depending on your agreement with the surety).
Good luck.