When a contractor or subcontractor does not receive payment on a construction project in the District of Columbia it has several options on how to proceed, including, in some circumstances, recording a Notice of Mechanic’s Lien against the subject property where the work was performed. The Notice of Mechanic’s Lien is recorded with the District of Columbia’s Office of Recorder of Deeds. The mechanic’s lien is a cloud on title of the property until such time as the lien is released or bonded off.
A property owner may bond off a mechanic’s lien in one of two ways: 1) depositing cash with the Court; or 2) obtaining a surety bond and filing a written undertaking with the Court. Specifically, D.C. Code 40-303.16 [Payment into court and release.] provides as follows:
- (a) In any suit to enforce a lien under this chapter, the owner of the building and premises to which the lien may have attached may be allowed to either:
- (1) Pay into court the amount claimed by the lienor, and such additional amount, to cover interest and costs, as the court may direct; or
- (2) File a written undertaking, with one or more sureties, to be approved by the court, to the effect that he or she and they will pay the judgment that may be recovered, which may include interest and costs; provided, that:
- (A) Where the surety is to be provided by bond, only one bond shall be required; and
- (B) The judgment shall be rendered against all the persons so undertaking.
- (b) On the payment of the money into court, or the approval of the undertaking pursuant to subsection (a)(2) of this section, the property shall be released from the lien, and any money so paid in shall be subject to the final decree of the court.
- (c)(1) No undertaking pursuant to subsection (a)(2) of this section shall be approved by the court until the complainant shall have had at least 5 days notice of the defendant’s intention to apply to the court for the approval, which notice shall give the name and residence of the person to be offered as surety, or persons if the court determines more than a single surety is required, and the time when the motion for the approval will be made.
- (2) Any surety shall make oath, if required, that he or she is worth, over and above all debts and liabilities, double the amount of the lien.
- (3) The complainant may appear and object to the approval.
Pursuant to D.C. Code 40-303.16, a lien claimant has the right to object to the surety if the claimant has concerns about the surety or believes the surety is not creditworthy. There is no statutory right to object to bonding off a mechanic’s lien using cash. When this occurs, the cash is deposited into the Court registrar until such time as the Court orders how the funds should be disbursed.
D.C. Code 40-303.17 [Undertaking to discharge liens before suit.]
Such an undertaking as above mentioned may be offered before any suit brought in order to discharge the property from existing liens, in which case notice shall be given as aforesaid to the parties whose liens it is sought to have discharged, and the same proceedings shall be had as above directed in relation to the undertaking to be given after the commencement of the suit, and said undertaking shall be to the effect that the owner and his said sureties will pay any judgment that may be rendered in any suit that may thereafter be brought for the enforcement of said lien.
Mike Bramnick has experience bonding off mechanic’s liens on behalf of owners and general contractors. If you would like to schedule a consultation with Mr. Bramnick regarding a mechanic’s lien issue, please contact him by email at Mike@BramnickCreed.com or by phone at (301) 547-3647.