A Florida release of mechanics lien bond is a court bond required which allows for a lien to be released, and which also guarantees that should the lien holder win the case, they will be compensated.
Please note: Before our agency will accept and review your lien documents or provide you with an application for a mechanic's lien bond, there is a nonrefundable $75.00 application fee. If you follow through and obtain the surety bond, that amount is deducted from your first annual premium.
Below, AmeriPro Surety Bonds provides you with information on the Florida release of mechanics lien bond required. Our agency will work with you or legal counsel to obtain the bond that you require.
A mechanics lien occurs when there have been repairs or upgrades on a property and the contractor has not been paid, or alleges nonpayment for the work done.
Consequently, a lien is placed against the property for nonpayment such that before the property could ever be sold or refinanced, the lien on the property must first be satisfied (by payment and any interest accrual).
Release of Mechanics Lien: Florida Legal Statutes
A Florida release of mechanics lien is found according to Chapter 713.20 of the state’s statutes. Additionally, a surety bond is also required.
A Florida release of mechanics lien bond occurs when a contractor and homeowner have a dispute which is being heard in court.
The court orders the homeowner to obtain a Florida release of mechanics lien bond. The existence of this surety bond does two main things:
Additionally, all interest which has accrued on the original payment will be guaranteed by the surety bond amount.
This surety bond is purchased by the homeowner (who is the bond’s principal), on behalf of the contractor (the bond’s obligee), should the contractor prevail in court. The surety is the company issuing your bond. AmeriPro Surety Bonds is agent for the surety.
In Florida, the amount of a release of mechanics lien bond is calculated as follows:
It is:
The amount of claim of the lien,
PLUS
Interest on that lien amount for 3 years,
PLUS
the GREATER of $1,000 or 25% of the lien amount,
EQUALS,
The amount of the Florida mechanics lien bond you are required to purchase.
If the court presents with you an order requiring the amount of the bond required, our agency will need a copy of that court order for underwriting of your bond.
As an applicant for a court-mandated release of mechanics lien bond, you should be aware that the amount you are required to purchase must be backed by full collateral.
As an example, if you are required to purchase a $10,000 release of mechanics lien bond, you will need to place the full $10,000 towards the surety bond.
In general, meeting the collateral requirements will occur in one of two ways:
An ILOC is a letter which states that the banking institution will honor the dollar amount required. As the name indicates, the letter is “irrevocable”. Once issued, it cannot be modified, changed, or canceled unless all parties agree to the change.
In addition to this surety bond’s full collateral, the premium, or cost of the bond, is also required.
The premium amount to be paid will be determined by the bond’s amount and perhaps your credit score.
It should be noted that the premium renews on annual basis for as long as the underlying court case is active. You should prepare to pay the premium amount at least twice.
AmeriPro Surety Bonds is a surety bonds-only agency which provides license and permit, contractor, court, and fiduciary bonds throughout Florida and nationwide.
We will work with you to make the purchase of your release of mechanics lien bond as easy as possible.
