Home>Levelset Community>Legal Help>First question, is it necessary to bond around the lien even if their mechanics lien is not valid due to them not filing a 20 day? Second question is, who should bond around the claim, us the subcontractor or the the property owner? Thank you,
First question, is it necessary to bond around the lien even if their mechanics lien is not valid due to them not filing a 20 day? Second question is, who should bond around the claim, us the subcontractor or the the property owner? Thank you,
Hi, just wanted to ask a couple questions regarding bonding off a lien claim. We are a subcontractor and our supplier (who did not file a 20 day prelim) has filed a mechanics lien on a project that we are on.
1 reply
Nov 21, 2018
The question of whether it is ever necessary to bond around or "bond off" a mechanics lien is a question of the particular obligations imposed by the contracts between the parties on the projects.
From a purely statutory / mechanics lien law point of view, there it is never mandated that a party bond off a lien claim. The ability to do so is merely provided as an option to release the property itself from the encumbrance of the lien claim prior to either the enforcement of the lien or the lien's expiration or removal.
In California, any party affected by a lien claim (owner, contractor, or subcontractor) who disputes the validity of a recorded lien may obtain release of the real property from the claim of lien by recording a lien release bond in an amount at least 125% of the lien claim. If a party chooses to post a bond, there are requirements set forth by § 8424, including notifying the claimant.
There are things to consider, however. The time in which an action to enforce a lien may be initiated in California is limited to 90 days form the completion of the work (or 30 days from the filing of a notice of completion or cessation). If that time passes, the lien expires and a petition to have the lien dissolved and removed can be filed. Additionally, a release order may be petitioned for by joining such request with any pending action to enforce the lien.
When a lien is likely invalid, the question of whether to expend more energy into removing it prior to expiration or attempted enforcement depends on the obligations of the contracts, and lender requirements. It is generally a good idea to inform the lien claimant that their lien is invalid due to not providing required notices, and request its voluntary removal. If a claimant insists on keeping an invalid lien, there are other ways to deal with it (petition to remove, action for disparagement of title, etc.), but talking it out first can be the easiest and most productive path forward.