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How can i protect my Mechanic's Lien from Surety bond?

OhioBonding Off LienMechanics Lien

I have placed a Mechanic's lien on a property and was wondering how if at all i can protect my Lien from being bonded off.

1 reply

Jan 23, 2023

At the hearing on the application to substitute the lien for the bond, the only issue presented to the court is the "sufficiency" of the bond itself. Thus the only real challenge you can make is questioning the surety itself and their funds, etc. 

The real question in my mind though is why you are upset with the surety getting involved. Liens only generally help in two situations, when a loan is about to be converted (as in from a construction loan to a conventional loan) or when a property is about to be sold. Those are the only times a lien can really apply pressure. Otherwise, a lien is used for protection, rather than pressure. 

As for protection, I would much rather have my clients protected by a bond in 150% of the amount of the lien. This eliminates the need for a preliminary judicial report. It also eliminates any questions related to "lien superiority" or determining whether you will be paid if the property is foreclosed, or if someone else will be ahead of you. 

Instead, you can now go sue, and all you have to do is win your breach of contract case (and show that your original lien was valid). Win that and you will be paid by the surety. It makes it all so much simpler. You also have an extra 50% in there that you may be able to coax from the judge to pay attorney's fees or interest, or both. 

Long story short, I would take a bond in place of a lien every day of the week.  

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