Transferring a Construction Lien to a Lien Transfer Bond

On a private project, unless the owner requires the general contractor to furnish a payment bond, the owner’s property is subject to construction liens from suppliers and subcontractors. If a lien is recorded, however, the owner has an option to transfer that lien to the security of a lien transfer bond by recording a lien transfer bond in the public records.  This will remove the lien from the real property and transfer it to the bond, hence the name lien transfer bond.  This option is a statutory option under Florida’s Lien Law that allows the owner to transfer the construction lien to the lien transfer bond before a lien foreclosure lawsuit is filed or after the lien foreclosure lawsuit is filed. It is really the owner’s call.

When a lien transfer bond is recorded before a lien foreclosure lawsuit is filed, the lienor still has one year from final furnishing to sue the lien transfer bond. However, if the lien transfer bond is recorded after a lien foreclosure lawsuit is filed, the lienor must amend its lawsuit to sue the lien transfer bond within one year from the transfer.

If you are an owner and a construction lien is recorded, consult with counsel regarding your options including recording a lien transfer bond.

If you are a contractor, etc. and receive notification of the lien transfer bond, consult with counsel regarding your options to pursue your claim against the bond.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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