How to Stop a Subcontractor From Filing a Public Improvement Lien
- 1). Review the public improvement lien filed by the subcontractor for its sufficiency in complying with the legal requirements for such liens. State law will specify the information needed to be included in the lien and a defective lien may be subject to legal challenge. For example, California permits a general contractor to challenge the lien if it claims an excessive amount. The general contractor can file an affidavit with the public agency attesting that the lien is excessive. If the subcontractor does not contest the general contractor's affidavit, the lien will be released by the public agency.
- 2). Contact a surety company about obtaining a lien release bond. Several states have set these bond amounts by statute. For example, a lien release bond in New York must be 110 percent of the amount of the lien. In California, the bond must be 1.5 times the lien. The surety should be able to provide you with a premium quote for lien release bonds in your state.
- 3). Comply with the surety's application for obtaining the lien release bond. The surety will need a copy of the lien and most likely some in-depth financial information about you and your company. If you do not have sufficient credit history, you may also have to provide some collateral for the bond.
- 4). File your lien release bond with the public agency and the public improvement lien will be released.
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