Tuesday, March 15, 2011

Does a mechanic's lien appear on a title report after it is bonded?

TiDoes a mechanic's lien filed against real property still appear on a title report even after the lien has been bonded?  It is a very common question and the answer is simple:  the mechanic's lien might still appear on the title report but it should not.  The reason is that if a proper mechanic's lien discharge bond is recorded with the County where the mechanic's lien was filed, then the lien is removed from the real property and attached to the discharge bond.  This is the entire purpose of Lien Law Section 19(4).  While the discharge bond does not extinguish the mechanic's lien, it does completely remove it from the real property.  Therefore, the mechanic's lien, once properly bonded off in accordance with the requirements of Lien Law Section 19(4) is no longer an encumbrance to the real property and should not show up on a title report. 

If the mechanic's lien was properly bond and still shows up on a title report you will need to speak to the title company.  Some title companies simply are not familiar with the intricacies of the lien law and may want a legal opinion before they will remove the lien from the title report.

Vincent T. Pallaci is a partner at the New York law firm of Kushnick Pallaci, PLLC where his practice focuses primarily on the area of construction law.  He can be reached at (631) 752-7100 or vtp@kushnicklaw.com

No comments:

Post a Comment