On July 1st, 2012 a number of significant changes to the California mechanics lien law went into effect. It is hard to gauge exactly how much impact these changes have had lien filings in California. A recent article By Carlos Rico in The Daily Transcript postulates that there haven’t been a significant rise or fall in the number of lien filed in the state. He goes on to say that the strength of the economy (or lack of) if the determining factor in mechanics lien filings. (See Carlos’s article here). Taking these arguments into account one could argue that . . . maybe it is too early to decide if the changes to the mechanic’s lien law will produce their intended outcome: to streamline lien filing practices so contractors can get paid for their work.
ThisJurisco blog has burned of many words updating California Attorneys on the workings of the Transfer of Lien Bond; also known as a Release of Lien Bond. Changes made to the mechanic’s lien law have a direct effect on any issuing of a Transfer of Lien Bond or a Release of Lien Bond in California. The new law reduces the size of the bond required to adequately release a property of a lien from 150 percent of the lien amount to 125 percent. See below or this Linkfor text of the code)
The good news: This reduction in bond amount makes it easier to issue these bonds. Extrapolated Further: This will help contractors collect payments because a Transfer of Lien Bond (or a Release of Lien Bond) is a legal mechanism that guarantees payment of contested amount if the property owner is found to be liable for the sum.
Does all this sound like a foreign language to you? If so, don’t be daunted. It is complicated. Luckily the surety bond experts at Jurisco can help make sense of all these changes. Contact a representative today.
CA Code 8410-8424
“8424. (a) An owner of real property or an owner of any interest in real property subject to a recorded claim of lien, or a direct contractor or subcontractor affected by the claim of lien, that disputes the correctness or validity of the claim may obtain release of the real property from the claim of lien by recording a lien release bond. The principal on the bond may be the owner of the property, the direct contractor, or the subcontractor.
(b) The bond shall be conditioned on payment of any judgment and costs the claimant recovers on the lien. The bond shall be in an amount equal to 125 percent of the amount of the claim of lien or 125 percent of the amount allocated in the claim of lien to the real property to be released. The bond shall be executed by an admitted surety insurer.
(c) The bond may be recorded either before or after commencement of an action to enforce the lien. On recordation of the bond, the real property is released from the claim of lien and from any action to enforce the lien.
(d) A person that obtains and records a lien release bond shall give notice to the claimant. The notice shall comply with the requirements of Chapter 2 (commencing with Section 8100) of Title 1 and shall include a copy of the bond. Failure to give the notice required by this section does not affect the validity of the bond, but the statute of limitations for an action on the bond is tolled until notice is given. The claimant shall commence an action on the bond within six months after notice is given.”
This spring the Colorado legislature made a few substantive changes to the civil code in Colorado. This could lead to a change in your practice. The surety bond experts at Jurisco know this and will track the changes to keep you up to date. Colorado Senate Bill 13-077 will affect the way conservatorships and estates are regulated and executed in the state. This could affect all probate and estate planning practices.
According to the Probate Blog from the Law firm of Wade Ash Woods Hill &Farley, P.C., the new law has provisions that, “… adds to the factors that are to be considered by a judge when determining the reasonableness of compensation and costs in probate matters, and reaffirms that nominated and appointed personal representatives have legal standing to determine their decedent’s probable intent and estate planning purposes on issues involving the decedent’s estate and it allows those representatives to prosecute or defend their decedent’s intent at the expense of the estate, resolving a previously open question in probate proceedings”. (See the full blog post: here)
This affects many areas of probate including guardianships, estates and how personal representatives are allowed to execute estates.
This new law also has implications on how surety bonds and probate bonds will be handled in cases. For instance now that personal representatives are allowed more discretion to levy out the assets of an estate, more scrutiny will likely be applied to the PR’s qualifications and fitness to control the distribution of the decedent’s estate. A personal representative bond (also known as an administrator bond or an executor bond) will likely be required in more estate matters to guarantee that the PR’s discretion doesn’t stray too far from the orders stated in the will.
With a busy practice it can be difficult to follow all the changes in taking place in Denver. The bond experts at Jurisco will monitor how legislation affects your business.
It is difficult to sell a house or other realproperty if you have if you don’t own the title outright. And if there is a lien on the your property it can seem impossible. In reality, however, a property lien doesn’t have to be be a dead end to a sale. There are legal products that can can turn a serious impediment into just a speed bump.
First the cold hard facts. Merriam Webster defines a Lien as:
a charge upon real or personal property for the satisfaction of some debt or duty ordinarily arising by operation of law
In law, a charge or encumbrance onproperty for the satisfaction of a debt or other duty. Common law developed two kinds of possessory lien: the specific (a lien on the specific property involved in a transaction) and the general (a lien for the satisfaction of a balance due, not confined to a specific property involved in a transaction). Courts of equity may, through the device of the equitable lien, recognize a creditor’s interest in a debtor’s property. Statutory liens are also available; developers and building contractors, for example, may use their interest in an improved site as security for payment (a mechanic’s lien).
What most prospective sellers don’t realize is that there is a way to securely place any property lien outside the purview of the sale. Named a Transfer of Lien Bond (or a Release of Lien Bond), this surety bond releases a lien from the property and replaces it with a bond to guarantee satisfaction if the court upholds the lien’s merit.
Every day in California, people are realizing that they have options when it comes to selling real property. The transfer of lien bond can easily and effectively free up a seller from an otherwise sale-negating encumbrance.
The bond experts at Jurisco know more about Transfer of Lien bonds (or Release of Lien Bond) and all other types of defendant bonds than any one company has a right to. They’ve been writing these bonds and saving people time for decades. Contact them to learn more.
In previous articles the bond experts at Jurisco explained why collateral is a necessity in the surety bond industry. To quickly summarize: collateral is required on almost all defendant bonds applicants are appealing a money judgement or court action of some kind. Full collateral of the contested amount is required to provide adequate ‘good faith’ that the appeal action is not just a delay tactic by the defense in order to move assets out of jurisdiction and that the full sum of the contested amount will be satisfied if the appeal is denied.
What happens, however, if a defendant is faced with the possibility of two surety bonds on an appeal action. This is a rare circumstance where a defendant needs both a Superseadas/Appeal Bond and a Transfer of Lien Bond. This situation occurs when a defendant wishes to appeal a judgment and also wishes to sell a property that currently has a lien attached. This can often result in confusion, consternation and rancor over the double burden of having to fulfill the collateral requirements of both bonds. Just the bonding process alone (not counting attorney fees) could make the appeal process prohibitively expensive.
There are some surety agencies who feel that requiring an applicant to post collateral for both bonds is unnecessarily burdensome. The surety bond experts at Jurisco, for example, believe that a single posting of collateral is sufficient because it was a single judgement that created the need for the bonds. This saves the client precious time and money; and may even provide the financial leeway necessary to allow them to proceed with an appeal action.
For any question about rates and applications, feel free to contact the industry leaders at Jurisco
Making a lot of news lately are high profile patent infringement lawsuits coming out of silicon Valley. Clearly one of the biggest (and what The Wall Street Journal termed “The Patent Trial of the Century) was Apple’s suit against rival Samsung. Though this case made international news what a lot of people don’t recognize is that there are many smaller patent infringement lawsuits active in California at any time. The superfluity of new technologies has led to patent and trademark law becoming a very active and vital part of the California legal universe. Many of these lawsuits take the form of an injunction which is a legal mechanism to one party uses to strop the other from continuing a contested action. When technology patents are involved it generally takes the form of one company filing an injunction to prevent another company from selling a product which they believe contains patented technology i.e. screen functions. With court dockets becoming increasingly full of these types of lawsuits, California judges have shown a greater emphasis on plaintiff’s procuring Injunction Bonds. Injunction Bonds protect the defendant from being wrongfully enjoined, a surety bond covers any damages the defendant may sustain should the court rule the plaintiff’s suit is wrongful. The cost of the bond will vary depending on the amount of the lawsuit and state and local statutes. Of course, many times these case decision will be appealed. To understand that process please see the next article.
Jurisco knows that this information can be intimidated. They have bond professionals on hand to answer and questions you may have and to make you feel more at ease with the process.
New proposed federal legislation would affect patent litigation in California and injunction proceedings. U.S. House Resolution 6245, or popularly known as the S.H.I.E.L.D Act (Saving High-tech Innovators from Egregious Legal Disputes) would require patent holders defined as Non Producing Entities (NPE) to pay for the defendants legal fees if the patent infringement case is found to be frivolous. Furthermore, the act would require all NPE plaintiffs in patent infringement cases to procure an Injunction Bond before the court would hear the case. The Injunction bond would be for the amount of the defendants estimated legal fees. California is home to many of the country’s high tech patent holders and the passing of the Shield Act would change the California Intellectual Property Law industry would be significantly affected. In addition, the Shield Act and would increase the demand for Injunction Bonds in these Civil Court cases. Jurisco is one of the country’s leaders in all civil court bonds, both plaintiff and defendant, and they are up to date on all California Injunction bond requirements.
The Shield act would not, however, change the current requirements regarding Injunction and Appeal bonds in the California. Superior courts are requiring surety bonds for many trademark and intellectual property law cases around the state.
The bond experts at Jurisco will continue to monitor the Shield Act’s progress through congress, and they are available to answer any of your questions regarding these proposed changes.
California’s legislature is in session. And like every year there are a host of proposed changes to the legal code in California, both civil and probate. For instance, Senate Bill 156 (SB-156) would challenge an attorney’s ability to collect fees from the management of a conservatorship. From the bill text, “This bill would … limit the ability of an attorney who represents a conservator to charge a fee for managing a conservatorship when the conservator challenges this management.” This is a small change that could have a legitimate impact on your business.
Jurisco will continue to monitor this bill’s path through committee and provide you with assessments an analysis on SB-156 and any others that may affect your business. If you should have any questions please do not hesitate to contact the bond experts at Jurisco.
Don’t let changes in legal code catch you unaware. In addition to managing growing businesses and busy schedules, it is almost impossible to keep track of every bill and proposal in Sacramento. The bonding experts at Jurisco, however, make it our business to know everything that may affect your business. If you ever have a question about how a these changes may affect your practice, please do not hesitate to contact us. A member of our knowledgeable staff will provide you with the up-to-date information you need to keep your practice current and free from costly setbacks.
A sad result of the ‘the great recession of 2008’ is that many people fell behind in their auto loans. In the aftermath, many vehicles were repossessed by the crediting institutions. And with the large population and all the car friendly scenery, California has seen a big upswing in the number of automobiles repossessed over the past four years. This is not a happy or profitable part of anyone’s business. The number of repossessions continue to increase despite lending agencies best efforts to reduce the number of repossession as much as possible. No bank or credit union wants to go through the process of collecting. It is time consuming and expensive. In addition it can be messy for the collection agents as well. Without proper assurance that their actions are covered by a financial guarantee (such as a sheriff indemnity bond) banks and credit unions are still exposed to the risk of associated with an improper seizure.
Claim and Delivery bonds also known as Replevin and Sequestration bonds eliminate all that extra worry and reduce the unwanted extra risk and mess that can result when receivables are collected without a bond. Claim and Delivery Bonds are required by statute if the plaintiff seeks to levy property before a judgment is made. The bond guarantees that if the replevin is deemed wrongful that the defendant be able to collect damages.
Of these type of bonds extend beyond the automotive lending industry. Other include boats, planes, mobile homes . . . . .
In California, the cost of acquiring a bond is dependant on the value of the property being collected in addition to the details of the case. A judge has leeway when setting the amount of the bond and this can be frustrating to parties but is important to keep costs low in circumstances where a flat rate would create an unnecessary burden.
The bond experts at Jurisco have answers to any questions that may arise while you are shopping for a bond agency.
In Civil Cases when a surety bond is statutorily required, or deemed necessary by the judge, the principle has two options: 1) to procure a surety bond or 2) deposit cash in the amount of the bond with the court. In what scenarios does it make sense to obtain a surety bond and when does it make sense to deposit money with the court? In this article, the bond experts at Jurisco will provide you with information to help make your choice easier.
One reason to obtain a surety bond, such as an injunction bond, appeal bond or a probate bond, is that it frees up capital for the principle. A surety bond requires only an annual premium payment of one or two percent of the bond amount; whereas if a principal chooses to deposit cash with the court, the principle loses access to a substantial amount of capital. This is money that could be invested; and since bonds can remain active for several years, the ‘lost’ income derived from investment could reach significant level. Furthermore, when cash is deposited, the courts collect the interest from their deposit accounts. The principals money is working; just not for them.
In addition, if you intend to post cash with the court in lieu of a bond then it is important to find out the rates because they can often be higher than than the premium. In Florida, for instance, the fee for placing a deposit with the court is often higher than the premium for the respective surety bond. In California, on the other hand, there is no fee for depositing money with the court.
A second important consideration if the difficulty involved in retrieving the money from the court. Surety Bond agencies, such as Jurisco, are built on customer service and they retain clients based on their ability to solve their clients diverse needs. Often this requires being flexible and finding creative solutions to problems. Superior courts, like many municipal and state institutions are not; and retrieving deposits can be a long and arduous process. And when it is possible to reach customer service professionals, rarely do they have the answers. There are too few of them and the range of problems is far too large for any one employee to have a detailed grasp of all the issues.
When making a decision involving time and money it is important to have all the facts. If the surety bond process seems confusing, please don’t hesitate to contact the bond professionals at Jurisco. Their expert team is available to answer all your questions.
Did you know that in 2007 the California legislature passed into law the Professional Fiduciaries Act and as of January 1st 2009 it became necessary for any fiduciary to be licensed if they were to legally operate in the state. In the legal world a Fiduciary is defined as, “An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit.” The California Professional Fiduciary Bureau is the the state licensing body that sets the definition of a ‘professional fiduciary’ for California. Generally, a professional fiduciary requires a license if they are a conservator or guardian for two or more people; or a trustee or agent under durable power of attorney for health care or finances for more than three people.
Currently there are over 500 professional fiduciaries licensed in CA, representing many more estates and individuals. And these professionals manage over 6 billion dollars in assets. Commonly and throughout the year, these professional fiduciaries are required to post a surety bond. For the newly licensed this can seem like a big obstacle. It doesn’t have to be. Experienced fiduciaries know that the acquiring a guardianship bond, a trustee bond or a personal representative bond in California can be a quick and easy process.
The bond experts at Jurisco have been serving the needs of professional fiduciaries in California for years. If you have any questions about the surety bond process please contact a representative at Jurisco and they will be happy to answer your questions.