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 Missouri
For residential real property, RSMo § 429.016 lets the owner or another interested person release a mechanic's lien by depositing substitute collateral with the circuit court, including a surety bond of at least 150% of the lien amount. The lien claim then moves from the property to the bond.
- The surety must be made a party to any lawsuit to enforce the released lien.
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.