Arizona Mechanics Lien Release Bond

An Arizona lien release bond is a rapid remedy for removing a mechanic's lien from a parcel of real property. The process and the formula for calculating the bond amount required is addressed under Chapter 33-1004 of the Arizona Code. Section (A) states that, "any person who has a legal or equitable interest in the land which is subject to the lien, a contractor, subcontractor, mortgagee or other lien creditor, may, either before or after the commencement of an action to foreclose such lien, cause to be recorded in the office of the county recorder, in the county in which the land is located, an Arizona lien discharge bond together with a power of attorney disclosing the authority of the person executing the same on behalf of the surety." Filing of the surety bond immediately relieves the lien.

Section (B) of the statute offer instruction for determining the surety bond penalty (bond amount). The lien release bond must be executed "by a surety company or companies holding a certificate of authority to transact surety business in Arizona, issued by the director of the department of insurance pursuant to title 20, chapter 2, article 1. The bond shall be for the sole protection of the claimant who perfected such lien. The bond shall be in an amount equal to one hundred fifty per cent (150%) of the demand set forth in and secured by the notice and claim of lien and shall be conditioned for the payment of the judgment which would have been rendered against the property for the enforcement of the lien."

The Arizona lien release bond must be filed within a "reasonable period of time". Upon filing, "if a suit is pending to foreclose the lien the claimant, within ninety days after receipt thereof shall cause proceedings to be instituted to add the surety and the principal as parties to the lien foreclosure suit." The surety bond and surety company are released from the obligation upon any of the following, pursuant to Section (D) of the statute:

• The failure of the lien claimant to commence a suit within the time allowed pursuant to section 33-998.
• Failure of the lien claimant to name the principal and sureties as parties to the action seeking foreclosure of the lien if a copy of the bond has been served upon claimant. If the bond is served upon the claimant within less than ninety days from the date claimant would be required to commence his action pursuant to section 33-998, the claimant shall have ninety days from the date he receives a copy of such bond to add the principal and the sureties as parties to the lien foreclosure suit.
• The dismissal of the foreclosure suit with prejudice as to the claimant or the entry of judgment in such suit against claimant.

If proper notice by service of process (serving a copy of the surety bond) on the claimant is not made then the claimant's response period is tolled. "The claimant shall have six months after the discovery of such bond to commence an action thereon, except that no action may be commenced on such bond after two years from the date it was recorded as provided in this section."

Arizona surety bond leader, Surety One, Inc. is THE most responsive underwriter of lien discharge bonds in the nation. Our expertise in manuscripting surety bond forms acceptable to county recorders and registers of deeds, same day underwriting, immediate bond execution and delivery are unmatched. We underwrite mechanic's lien discharge bonds in all fifty states, Puerto Rico and U.S. Virgin Islands. Contact us any time to discuss your Arizona mechanic's lien release bond.

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