I am a contractor in new york. A subcontractor I had hired for a public improvement project filed a mechanic's lien and served it on the public entity. The subcontractor subsequently initiated a foreclosure proceedings and submitted notice of pendency. I have now obtained bond 103% of the mechanic's lien amount. What should I do from here? Send a copy of the bond to the subcontractor and its attorney? Can the foreclosure proceedings be discontinued now that I have bonded the lien?
Unfortunately, obtaining a bond only removes the mechanic's lien from the title of the real property. Accordingly, once you provide a copy of the bond to your subcontractor, which you are required to do, your subcontractor will be seeking to amend the lawsuit to discontinue against the owner, and it will seek to add the surety. However, you will still be in the lawsuit (and the surety will certainly ask you to defend it pursuant to the indemnification agreement you signed to get the bond). If you wish to be able to contest the lien (by asserting payment, backcharge, or other defenses), you need to consult with experienced construction counsel ASAP so that your specific situation can be discussed.