CSLB Law & Business ExamInsurance and LiensMedium
A property owner disputes a subcontractor's recorded mechanics lien for $80,000 and wants to record a lien release bond to clear title so the property can be sold. Under California law, what minimum bond amount must the owner obtain?
- A$40,000, which is 50% of the lien amount
- B$100,000, which is 125% of the lien amount
- C$120,000, which is 150% of the lien amount
- D$80,000, equal to the exact amount of the lien
Show answer & explanationAnswer & explanation
Correct answer: B. $100,000, which is 125% of the lien amount
California Civil Code requires a lien release bond to be in an amount equal to 125% of the amount of the claim of lien. Here, 125% of $80,000 = $80,000 × 1.25 = $100,000. This ensures sufficient funds are available to cover the claim plus potential costs if the lien claimant prevails.
Why the other options are wrong
- A. 50% is far below the statutory requirement and would not release the lien.
- C. 150% overstates the statutory multiplier, which is 125%, not 150%.
- D. Equal to the lien amount is insufficient; the statute requires an additional 25%.
Lien Release Bond Amount
A bond used to remove a mechanics lien from title must be in an amount equal to 125% of the recorded lien claim.
- 125% multiplier is set by Civil Code
- Allows property to be sold/refinanced while lien dispute is litigated
- Lien transfers from the property to the bond
Memory trick: 125% — a quarter more to cover costs