What Does It Mean If Someone Bonds Around My Lien?
FTF
January 9, 2026
You did the work, sent the invoice, and waited for payment. When it never arrived, you took the necessary step to protect your business: you filed a mechanic’s lien on the property. You’re now waiting, hoping the lien will prompt the owner to pay up. Then, a thick envelope from the clerk of real property records lands on your desk. Inside, you find a dense, legal-looking document titled “Bond to Indemnify Lien.”
What is this? Does it mean your lien is gone? Has the property owner found a loophole to avoid paying you?
Receiving this notice can be confusing, but it’s a common step in the lien process. This article will explain what a bond to indemnify a lien is, what it means for your payment claim, and what you need to do next to get paid.
A bond to indemnify lien, often called “bonding around a lien,” is a legal tool property owners can use. It doesn’t erase your lien, but it does change where the lien attaches. Instead of being attached to the physical property (the land and building), your lien is now attached to a surety bond.
Think of it like this: your claim for payment was secured by the property itself. Now, your claim is secured by a pot of money held by a third-party insurance company, known as a surety.
The property owner, or another party involved in the project, purchases this bond from a surety company for an amount typically greater than your lien claim (often 110% to 150%, depending on state laws). This bond guarantees that funds are available to pay your claim if you prove it is valid.
A lien on a property acts like a financial roadblock. It can prevent the owner from selling the property, refinancing a loan, or moving from a construction loan to permanent financing. For an owner, a lien can bring their project or financial plans to a screeching halt.
By bonding around your lien, the owner effectively “cleans” the property’s title. The lien is detached from the real estate, allowing the owner to proceed with their sale or financing. The bond serves as a substitute security, ensuring that your right to get paid is still protected while freeing up the property.
For you, the contractor, your lien is still very much alive. The difference is that the asset you can pursue for payment has changed from brick and mortar to a financial instrument.
When you receive that “Bond to Indemnify Lien” notice, your fundamental rights remain intact. You still have a valid claim for the money you are owed. However, the process for collecting that money changes significantly.
Your path to payment now involves three key shifts:
This process offers a major advantage: you are pursuing a large, financially stable insurance company for payment, not a property owner who may have cash flow problems. Sureties are in the business of paying valid claims, which can sometimes make the collection process more straightforward than a property foreclosure.
Here is the most critical part of the entire process: you must act quickly.
Every mechanic’s lien comes with an expiration date. State laws dictate a specific timeframe within which you must file a lawsuit to enforce your lien. This is known as the statute of limitations, and it’s usually one year from the date you filed the lien, though it can be shorter or longer depending on your state.
This deadline still applies even after a bond has been posted.
If you fail to file a lawsuit to enforce your lien against the bond before the statutory deadline expires, your lien becomes unenforceable. The surety company will be released from its obligation, the bond will be dissolved, and the money that was set aside to pay you will be returned to the person who posted it.
At that point, your secured claim vanishes. You may still be able to sue for breach of contract, but you lose the powerful security that the lien and the subsequent bond provided. Time is not on your side, so it is essential to contact a construction attorney as soon as you receive notice of a bond.
Bond requirements and procedures vary significantly by state. Understanding your state’s specific rules is critical to protecting your payment rights.
Different states mandate different bond amounts:
Texas: The bond must be at least 125% of the total amount of your lien claim.
California: Requires 125% of the lien claim amount, or 150% if the lien claim includes attorney’s fees and costs.
Florida: Mandates 125% of the lien claim amount.
New York: Requires 110% of the lien claim amount.
Georgia: Requires 125% of the lien claim amount plus anticipated costs.
These percentages exist to ensure there’s enough money in the bond to cover your claim plus potential legal costs and interest.
Your deadline to file a lawsuit after someone bonds around your lien depends on your state’s mechanic’s lien laws:
California: You must file suit within 90 days of recording your lien (regardless of when the bond is posted).
Texas: You have one year from the last month in which you could have filed your lien to file suit.
Florida: You have one year from recording your lien to file a foreclosure action.
Georgia: You have one year from recording your lien, or within 30 days after receiving notice of the bond, whichever is later.
New York: You have one year from filing your lien to commence a foreclosure action.
Receiving a “Bond to Indemnify Lien” notice is a signal to take immediate action. Here’s what you should do:
While it may not feel like it when you’re waiting for payment, bonding around a lien can actually create a better outcome for all parties involved.
Protect Your Right to Get Paid
Bonding around a lien is a clear sign that the property owner is taking your claim seriously, but it also means you must take the next legal step to secure your payment. By understanding the process and acting promptly, you can enforce your rights and ensure you get paid for the work you performed.
The key points to remember:
Don’t let confusion or hesitation cause you to miss your opportunity. The moment you receive a bond notice, take action.
If you’ve received a “Bond to Indemnify Lien” notice and need guidance on your next steps, the experienced construction attorneys at Cromeens Law Firm can help. We understand the strict deadlines and complex procedures involved in enforcing liens against surety bonds. Contact us today to protect your payment rights and ensure your lien is properly enforced.
No. Bonding around your lien doesn’t eliminate your right to payment. Your claim simply transfers from the property to a surety bond. You must file a lawsuit against the surety company within your state’s deadline, but the bond ensures funds are available to pay you if you prove your claim is valid.
Your lawsuit deadline is based on your state’s mechanic’s lien statute of limitations, calculated from when you originally filed your lien—not from when you received the bond notice. This deadline typically ranges from 90 days to one year depending on your state. Contact a construction attorney immediately to determine your specific deadline.
Yes. The owner or general contractor can still pay you directly even after bonding around your lien. If you receive full payment, you would release both your lien and your claim against the bond. However, don’t accept partial payments or sign any releases without consulting an attorney first.
If you miss your state’s deadline to file a lawsuit enforcing your lien, your claim against the bond becomes unenforceable. The surety is released from its obligation, the bond is dissolved, and you lose your secured claim. At that point, you may only have an unsecured breach of contract claim, which is much harder to collect.
Often, yes. Surety companies are financially stable insurance companies in the business of paying valid claims. Unlike property owners who may have cash flow problems, sureties have guaranteed financial resources. They also frequently prefer settling legitimate claims rather than going through expensive litigation, which can lead to faster payment.
While not legally required, it’s highly recommended. Construction lien law is complex, deadlines are strict and unforgiving, and procedural errors can cost you your entire claim. The investment in a construction attorney is far less than the risk of losing tens of thousands of dollars by missing a deadline or filing incorrectly.
Karalynn Cromeens is the Owner and Managing Partner of The Cromeens Law Firm, PLLC, with over 17 years of experience in construction, real estate, and business law. A published author and passionate advocate for contractors, she has dedicated her career to protecting the businesses her clients have built. Karalynn is on a mission to educate subcontractors on their legal rights, which inspired her books Quit Getting Screwed and Quit Getting Stiffed, as well as her podcast and The Subcontractor Institute.
