Question 1

What is a lien release bond in Florida?

Accepted Answer

A lien release bond (also called a lien transfer bond or discharge bond) is a surety bond that transfers a construction lien from the property to the bond. Under Florida Statute Section 713.24, a property owner can file a lien transfer bond with the clerk of court to remove a construction lien from the property. The bond amount is typically 150% of the lien amount (or the amount ordered by the court). Once the bond is filed, the construction lien is transferred from the property to the bond, and the property’s title is cleared. The lien claimant then pursues their claim against the bond (and the surety company) instead of the property.

Question 2

Why would a Florida property owner use a lien release bond?

Accepted Answer

Reasons: to clear the property’s title for sale or refinancing (a construction lien clouds the title and prevents or delays closings), to prevent a lien foreclosure (the lien is transferred from the property to the bond, eliminating the foreclosure threat), to resolve a disputed lien without paying the full claimed amount (the property owner can contest the lien amount in court while the property’s title remains clear), and to maintain the property’s marketability (a clear title is essential for future transactions). The bond provides the lien claimant with security (the surety company guarantees payment if the claim is upheld) while freeing the property from the lien’s encumbrance.

Question 3

How is a Florida lien release bond obtained?

Accepted Answer

Process: (1) The property owner contacts a surety company (an insurance company that issues bonds). (2) The surety company underwrites the bond (evaluating the property owner’s creditworthiness and the merits of the lien dispute). (3) The surety company issues the bond in the amount of 150% of the lien (or the court-ordered amount). (4) The property owner records the bond with the clerk of court. (5) The property owner gives notice to the lien claimant (who then has 1 year to file suit against the bond). (6) The property’s title is cleared. Cost: the bond premium is typically 1-3% of the bond amount (for well-qualified applicants). The property owner may also need to provide collateral to the surety company.

Lien Release Bond

Lien Release Bonds in Florida

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