New York Lien Law – Discharge of Mechanic’s Lien by Bond

In New York, filing a bond to discharge a mechanic’s lien is a process that allows a property owner, contractor, or other interested party to remove the lien from the property while ensuring that the lienor’s claim is secured by a bond. This can be particularly useful to free the property from encumbrances, allowing for its sale or refinancing without the lien still being in place. Here’s an overview of the relevant provisions under the New York Lien Law:

New York Lien Law – Discharge of Mechanic’s Lien by Bond

1. Applicable Sections
   • The relevant sections of the New York Lien Law for discharging a lien by bond are primarily found in Section 19 and Section 20.
2. Who Can File a Bond
   • A property owner, contractor, or any other party in interest can file a bond to discharge a mechanic’s lien.
3. Filing the Bond
   • Form and Amount: The bond must be in an amount equal to 110% of the lien amount claimed.
   • Surety: The bond must be executed by a surety company authorized to do business in New York State.
   • Approval: The bond must be approved by a judge or justice of a court of record or by the county clerk where the lien is filed.
4. Procedure
   • Preparation of the Bond: The bond should be prepared, ensuring it meets the statutory requirements regarding form and amount.
   • Application for Approval: An application for the approval of the bond must be made to the court or county clerk. This application should include:
     • The bond itself.
     • A copy of the lien.
     • An affidavit or other documentation supporting the sufficiency of the bond.
     • Notice: Notice of the application must be served to the lienor (the party that filed the mechanic’s lien).
5. Discharge of the Lien
   • Court/Clerk Order: Upon approval of the bond, the court or county clerk will issue an order discharging the lien.
   • Filing and Recording: The order, along with the bond, should be filed with the county clerk’s office where the lien was originally filed. The lien is then discharged of record, meaning it no longer encumbers the property.
6. Effect on the Lienor
   • The lienor’s rights are transferred from the property to the bond. The lienor can then pursue a claim against the bond in the same manner as they would have pursued a foreclosure action on the lien.
7. Release of the Bond 
   • If the lien is settled, the bond can be released upon the lienor filing a satisfaction or release of the lien with the county clerk.

Key Considerations

• Timeliness: The application for approval of the bond must be timely and correctly served to the lienor to avoid delays.
• Accuracy: Ensure that the bond amount and all documentation are accurate to prevent rejection.
• Legal Advice: Given the complexities involved, consulting an attorney experienced in mechanic’s lien law and bond procedures is highly advisable.

Relevant Sections of the New York Lien Law

• Section 19: Addresses the discharge of liens, including by deposit or bond.
• Section 20: Details the procedure for approval and filing of a bond to discharge a lien.

Disclaimer: These codes may not be the most recent version. The state’s senate office may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.

We are not a law firm and our employees are not acting as your attorney. The information contained in the Site is general legal information and should not be construed as legal advice to be applied to any specific factual situation.