Mu contractor told me he is doing a bond on my mechanics lien. What's does.that mean?
3 replies
Jun 11, 2020
It likely means that your contractor is executing what is known as a "bond-around bond". This is a bond that allows a contractor to remove a lien from the owner's property. It DOES NOT destroy your lien rights, but it does remove the owner from the conflict. The legal procedure for foreclosing on the lien remains basically the same.
Please feel free to reach me directly if you would like to discuss your lien in greater detail.
Very best,
Ben House
281-762-1377
ben@houseperron.com
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Jun 11, 2020
One of the reasons mechanics liens are so effective is that they attach directly to the property title. This makes refinancing or selling the property incredibly difficult. One way property owners can clear the title is to "bond off" the lien claim. This doesn't eliminate your claim, but rather changes the dynamic a bit. Bonding off means that the property owner or GC posted a surety bond as a substitute for the property. Your claim is still intact, but it is against the bond instead of the property.
One thing to keep an eye on when your lien has been bonded off is your deadlines. The deadline to enforce a claim against the bond can vary depending on when the bond is recorded. Under Tex. Prop. Code §53.208;
(d) If the bond is recorded at the time the lien is filed, the claimant must sue on the bond within one year... If the bond is not recorded at the time the lien is filed, the claimant must sue on the bond within two years...
For more information on lien bonds:
In Texas, as in other states, the property owner of property covered by a mechanic's & materialman's lien can remove the lien by getting a surety bond. This means that if the claimant, such as a subcontractor or supplier, that filed the lien prevails on the claim such as in a lawsuit, instead of collecting by foreclosing on the lien, the claimant can collect on the bond. The surety bond can be obtained by either the property owner or the property owner's general contractor. Whoever obtains the bond must have the credit standing or qualify and will pay the premium. The ability to get the bond depends on the credit worthiness of the individual that applies for it.