Homeowners can find themselves facing foreclosure if someone claims they owe them money. A release of lien is a recourse for people to settle debts without losing their property.
The majority of states allow a person or business who claim to be owed payment for goods and services to place a lien on property of the person who owes them money.
Generally, the lien holder is a contractor, subcontractor, or part supplier. Even employees of contractors can place a lien because ultimately it is the homeowner's responsibility to pay for work.
Property Lien Consequences
Once a lien is placed on the property the homeowner could face foreclosure and have their property sold at auction if they do not settle the outstanding debt. There are instances when a lien is invalid, usually because the claim wasn’t filed within the specific timeframe. People in California can check the validity of a lien online.
When the court deems the claim valid it takes immediate action and so should you with a release of lien surety bond.
Surety Bond Coverage
Earlier in the year, Illinois joined 35 other states in accepting a surety bond in place of real estate to cover outstanding payments to contractors, workers, and other parties who claim to be owed money.
The release of lien bond officially takes the property off the table so the homeowner does not risk losing their house. Instead, the surety bond covers the due amount while the property owner and party who is owed the money work things out.
One way to avoid needing a release of lien or transfer of lien is to have a contractor or person doing work for you sign an agreement that they will not use a lien for payment. It also helps to have payments recorded so there is proof for the court that payment was indeed made.
Not responding to a lien has serious consequences. People have to deal with a negative credit report, can be forced from their home, and can rack up court fees.
Let Jurisco help you take action with a release of lien surety bond to control things before it gets bad.