Florida Release of Mechanics Lien Bond
AmeriPro Surety Bonds | 844-589-9732
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.
Florida Mechanics Lien
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.
Florida Release of Mechanics Lien Bond: Purpose
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:
- One, it allows the lien on the home to be released such that the home can be sold or refinanced.
- The second thing that the release of mechanics lien bond does is that it guarantees that should the contractor eventually prevail in court, all money and payments owed will be guaranteed to that contractor by the surety bond which has been filed.
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.
Florida Release of Mechanics Lien Bond: Calculating the Amount Required
In Florida, the amount of a release of mechanics lien bond is calculated as follows:
The amount of claim of the lien,
Interest on that lien amount for 3 years,
the GREATER of $1,000 or 25% of the lien amount,
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.
Florida Release of Mechanics Lien Bond: Full Collateral is Required
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:
- Backing the surety bond by cash collateral;
- Backing the surety bond by an irrevocable letter of credit (ILOC) from your banking institution.
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.
Florida Release of Mechanics Lien Bond: Premium and Renewal of Premium
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.
About Our Agency
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.