A release of lien bond, also known as a lien discharge bond or a lien removal bond, is a financial instrument used in the construction industry and real estate transactions to remove a lien from property records, while still protecting the claimant's rights. Liens are claims or legal rights against assets that are typically used as collateral to satisfy a debt. In the context of construction, a lien can be placed on a property by a contractor, subcontractor, or materials supplier who has not been paid for work performed or materials provided.

Here's how a release of lien bond works:

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Purpose: The bond is posted by a property owner or a general contractor to contest or remove a lien from the property records. This might be done to facilitate the sale of the property, refinance a mortgage, or simply clear the title.

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Protection for Claimant: Although the lien is removed from the property, the bond serves as a substitute to ensure that the claimant (e.g., contractor or supplier) still has a form of security for the claimed amount. Essentially, the bond guarantees payment to the claimant if their claim is found to be valid.

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Amount: The amount of the bond typically equals the sum claimed in the lien plus any additional costs that might accrue during the dispute resolution process, such as interest and legal fees. This amount varies by jurisdiction but is often set by statute or court order.