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Discharge of Mechanic's Lien Bond: The purpose of mechanic's lien statutes is to provide an inexpensive and simple method for material suppliers and contractors to secure the value of the services or materials that they have added to the property. A mechanic's lien is not an agreement or contract between parties, but rather a lien upon real estate which the plaintiff seeks to take by force of law and eventually to foreclose.
A discharge of mechanic's lien bond will therefore discharge the mechanic's lien and allow the owner of the property the legal right to sell or deal with the property as the discharge of mechanic's lien bond guarantee to the claimant of the lien any payment that is still due to them with interest and cost.
The bond is usually issued at a percentage over the lien amount, depending on the state in which the lien was place.
******** In submitting the initial request for bonding, the following information should be included to insure a quicker response.
1) A complete court bond application - Will provide a basic overall of the bond being requested, as well as information on the principal requesting the bond.
2) Copy of the court documentation/complaint - This court documentation/complaint will provide information as to the case and let the surety determine the strength of the principal's chance of prevailing in the case.
3) Copy of the mechanic's lien - A copy of the mechanic's lien will provide information to the amount of the lien and parties claiming that payment still due.
4) Business Financial Statements: If the principal requesting the bond is a corporation, provide the most recent year business financial statements (balance sheet and income statement). In addition to the business financial statement, a personal financial statement of all the owners of the corporation should be provided as well.
5) Personal Financial Statement: If the principal(s) is an individual, provide a personal financial statement for the principal(s).
6) Current Bank Statements: If the corporation or individual's financial statement has a high declaration of short term/liquid assets (cash, stock and securities), current statements to verify these assets should also be provided.