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 Texas
In Texas, any person may file a bond to indemnify against a mechanic's lien under Property Code Sections 53.171 and 53.172. The bond is double the lien amount, with a different rule when the liens exceed $40,000.
- A separate bond to pay claims under Prop. Code Chapter 53, Subchapter I (§ 53.201) is given by the original contractor before liens arise.
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.