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Why do i need to sign this release of claim on bond and why was I not notified we were the obligee on this bond

CaliforniaLien Releases

We filed a mechanics lien on owner of a project after getting paid we released it. Now If a owner of a project got a surety bond in my companies name as obligee should we have been notified? I find it odd that we filed a mechanics lien and this guy bonded around our lien named us as the obligee and we were never notified as such. Now there requesting we sign a release of claim on bond that we had no idea about. And there attorney is saying in order for the surety to close the file and terminate the bond they need us the obligee to affirmatively release any claim on the bond. Do I have to sign this or is my mechanic's lien release we filed sufficient enough to send them. I do not feel comfortable signing anything we were never notified of in the first place that we were the obligee. Thank you so much.

1 reply

Jun 28, 2018

First - I'm glad you got paid! It's always unfortunate when a lien must be filed in order to recover payment, but it's encouraging that payment was finally obtained. Anyway, that's a very interesting situation, and it's wise to be reluctant to sign documentation without first investigating. In California, a mechanics lien claim may be bonded off pursuant to § 8424 of the California Civil Code. However, when a lien is bonded off by the owner or other interested party, notice must be provided to the lien claimant. It's entirely possible that a bond could be posted to release the claim of lien but notice was never sent. In such a situation, the lien claim would actually be released from the property (despite the failure to send notice), but a claimant would effectively be given more time to make a claim against that bond. In a situation where a claimant has received payment for their filed lien claim, but that lien claim had actually been bonded off previously, it would make sense that an owner would pursue a waiver or release of bond claim. If a claimant has been paid in full and there are no more claims between the parties, though, a claimant could likely sign a release or waiver of bond claim without much risk. Of course, it's always imperative to read and understand a document before signing to be sure nothing fishy is going on.

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