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Lien Release Bond for the United States

Lien Release Bond Template for United States

A Lien Release Bond is a legal instrument used in the United States construction industry to release a property from a mechanics lien while protecting the rights of the lien claimant. The bond acts as a substitute for the property, transferring the security interest from the real property to the bond itself. This document is governed by state-specific mechanics lien laws and must comply with local statutory requirements regarding bond amounts, typically 150% of the lien amount.

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What is a Lien Release Bond?

A Lien Release Bond serves as a crucial tool in construction projects where property owners need to clear title to their property while ensuring lien claimants maintain their security rights. This bond type is particularly useful when parties need to proceed with property transactions or secure additional financing while a payment dispute is being resolved. The Lien Release Bond effectively transfers the security interest from the property to the bond, requiring careful consideration of state-specific requirements and proper documentation of all parties' rights and obligations.

What sections should be included in a Lien Release Bond?

1. Bond Information: Bond number, amount, and effective date

2. Principal Information: Details of the contractor/principal seeking the bond

3. Surety Information: Details of the surety company providing the bond

4. Property Description: Legal description of the property involved

5. Lien Details: Information about the lien being released

6. Bond Conditions: Terms and conditions of the bond

What sections are optional to include in a Lien Release Bond?

1. Additional Obligee Rider: Used when there are multiple beneficiaries of the bond

2. Premium Payment Terms: Details of bond premium payments and when they are to be made

What schedules should be included in a Lien Release Bond?

1. Schedule A - Property Description: Detailed legal description of the property

2. Schedule B - Lien Documentation: Copies of the original lien documentation

3. Schedule C - Surety Power of Attorney: Documentation of surety's authority to execute the bond

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Ƶ

Document Type

Release of Lien

Cost

Free to use
Clauses

























Industries

State-Specific Mechanics Lien Laws: Comprehensive state-level statutes governing mechanics liens, including specific requirements for bond amounts, time limitations, and filing procedures that vary by jurisdiction

Federal Miller Act: Federal law (40 U.S.C. �� 3131-3134) governing payment and performance bonds on federal construction projects, along with state-level Little Miller Acts for public projects

State Contractor Licensing Laws: Regulations pertaining to contractor licensing requirements and specific bond obligations for licensed contractors in the relevant state

State Insurance Regulations: Legal framework governing surety bond requirements and qualification criteria for surety companies operating within the state

Uniform Commercial Code: Article 9 provisions regarding secured transactions, including rules for perfection and priority of security interests

State Property Laws: Real property regulations and construction law requirements that affect lien rights and bond obligations

State Contract Laws: Fundamental contract law principles including formation requirements, consideration, and enforceability provisions that impact bond agreements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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