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I have mechanics lien on property and owner want contractor drop mechanics lien for escrow-is this a good idea

KentuckyForeclosureMechanics Lien

Property owner wants to sell home but contractor filed a mechanics lien in ky. Owner wants to put money in escrow whenever house sells. Not sure what to do

1 reply

Mar 5, 2020
Some of the power of mechanics liens is that, as an encumbrance on the property, it can be difficult to sell or refinance the property without taking care of the mechanics lien first. If the lien is released, the lien's power is lost. However, Kentucky does offer a similar way to have the lien released, but not deprive the claimant of their security. Kentucky Code § 376.100 sets forth how a lien can be released through the owner posting a bond. If a lien is filed, the owner can execute a bond for twice the value of the lien claimed, and the bond will stand-in for the property as security, such that the lien will be released. If the lien is "bonded-off" the lien claimant can then proceed against the bond (and the obligors on the bond) in order to collect payment, rather than proceeding against the property itself in a foreclosure action.
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