A.R.S. 33-1004: Bonding a Recorded Mechanics Lien Off Your Arizona Home

A recorded mechanics lien can freeze a sale or a loan closing while you are still fighting over whether the money is even owed. Section 33-1004 gives you an escape hatch. You can move the lien off your property and onto a surety bond, so your title clears and the dispute carries on against the bond instead of your home.

What the statute allows

An owner, or anyone with a legal or equitable interest in the land, along with a contractor, subcontractor, or mortgagee, can discharge a recorded lien by recording a surety bond. The release of the property is immediate and does not wait on the claimant:

the property shall be discharged of such lien whether or not a copy of the bond is served on the claimant.

So the moment the bond is recorded, your real estate is free of that lien, even before the claimant is told it happened.

The 150 percent bond

The bond is not dollar for dollar with the lien. Arizona sets it higher:

in an amount equal to one hundred fifty percent of the demand set forth in and secured by the notice and claim of lien.

That extra fifty percent cushions the claimant for the interest, costs, and fees they could win on top of the base claim. Like the up-front payment bond, this one has to be written by a surety company authorized to do business in Arizona, never an individual.

How 33-1004 differs from the other lien tools

This is the after-the-fact version of the up-front payment bond in 33-1003. Section 33-1003 keeps most liens from ever attaching, while 33-1004 removes one that is already on record. It is also different from a release after payment under 33-1006. A release happens once the lien is actually paid or resolved. A 33-1004 bond clears your title while the fight is still live and the debt is still disputed.

What it means for your build

Suppose a stucco subcontractor records a fifty thousand dollar mechanics lien on your finished home, and you are two weeks from closing your permanent loan. You believe the sub was already paid through your builder, but you cannot wait out a lawsuit. A surety issues a bond of seventy-five thousand dollars, which is 150 percent of the fifty thousand claim, and you record it. Your title clears, your loan closes on time, and the subcontractor now has to prove the debt against the bond rather than against your house.

How this connects to the rest of your lien protection

Section 33-1004 is the release valve for when prevention did not hold. The payment bond, the trust-fund rule, and your lien waivers all failed to keep a lien from landing. Keep the six-month foreclosure deadline in mind too, since a claimant who never sues to foreclose can leave a lien to expire. To act on a lien already clouding your title, walk through how to remove a mechanics lien from your Arizona home. The bond-discharge procedure is set out in A.R.S. 33-1004.

The bond's form, the surety's authorization, and the exact amount all have to be right for the discharge to hold. This page explains the rule in general terms. A construction attorney or your title company is who works those details out on a live claim.