Iowa Mechanic's Lien Release Bond

Property owners or contractors (the bond principal) can file this bond to discharge a mechanic's lien that has been filed against their real property. This is commonly used when there's a payment dispute with a subcontractor, material supplier, or laborer. By posting the bond, you can clear the lien from your property title without having to pay the disputed claim immediately, which is especially useful if you're trying to sell or refinance the property while the dispute is being resolved in court.

After the bond is filed with and approved by the administrator, you must notify the Iowa Secretary of State by posting a specific document to the Mechanics' Notice and Lien Registry (MNLR). Once this notification is complete, the bond serves as a definitive release of the mechanic's lien from your property. The lien claimant can then pursue their claim against the bond instead of your property. If the claimant wins a judgment in court, the surety will pay up to the bond amount, and you'll be responsible for reimbursing the surety.

The bond amount must be exactly twice (2x) the amount of the lien claim you're bonding off, as required by Iowa Code § 572.15. For example, if the lien is for $50,000, you need a $100,000 bond. The premium you pay to the surety company is typically 1-5% of the bond amount annually, depending on your credit and financial strength. For a $100,000 bond, expect to pay $1,000-$5,000. The bond must be approved by the administrator (typically the Secretary of State) before it can discharge the lien.