What a mechanic's lien discharge bond is
When a contractor, subcontractor or supplier records a mechanic's lien on a property, the owner or general contractor can post a bond to release the lien. The claim then moves from the property to the bond, so the property can be sold or refinanced while the dispute is settled.
In Alabama
In Alabama, a person with an interest in the property can transfer a mechanics lien from the property to a bond filed with the court under Ala. Code § 35-11-233(b). The bond equals the lien amount plus 8 percent yearly interest for three years, plus $100 for court costs.
- The lienor has 10 days after receiving the transfer certificate to challenge the amount or the surety.
You need this bond if you're
- A property owner facing a mechanic's lien
- A general contractor whose subcontractor or supplier filed a lien
- A developer who needs clear title to sell or refinance
- A lender that requires the lien removed before funding
What the surety looks at
The lien, the dispute behind it and your finances. Because the bond can pay out if the claimant wins, sureties often look closely at the dispute.