Bond Principal Necessary on a Mechanic’s Lien Claim

Payment bond document glasses resting on

The Virginia statute allows a party to essentially substitute a bond valued at a court set multiple of the principal amount of the mechanic’s lien for the memorandum.

October 23, 2018
Christopher G. Hill - Construction Law Musings

As anyone that reads this construction law blog knows, mechanic’s liens are a big part of the Virginia landscape for a construction attorney like me.

One option for dealing with a mechanic’s lien here in Virginia that we have not discussed but so often is the ability to “bond off” a lien. In short, the Virginia statute allows a party to essentially substitute a bond valued at a court set multiple of the principal amount of the mechanic’s lien for the memorandum. In exchange, the lien is released of record. Any enforcement action can still proceed with security for the claimant and the property owner feeling better about things because there will be no lien on the title to the land.

In many ways this process provides an easier path to resolution for both owner and claimant. First of all, the claimant does not have to deal with a bank or other interest holders in the property (though a recent case discussed below reminds us that certain other parties are necessary). Second of all, the owner does not have the cloud on the title of a mechanic’s lien that may have been filed by a subcontractor over which he has no control.

Mr. Hill may be contacted at chrisghill@constructionlawva.com



714.701.9180

Arrange No Cost Consultation










Subscribe to Construction Defect Journal

 

Construction Defect Journal is aggregated from a variety of news sources, article submissions, contributors, and information from industry professionals.

No content on this site should be construed as legal advice or expert opinion. By viewing this site you agree to be bound by its terms and conditions

 

Copyright 2018 - Construction Defect Journal – All Rights Reserved