A mechanics lien has been filed against a property. The property owner wants to sell the property. What must happen to clear the lien for closing?
Correct Answer
B) Pay the lien amount or post a bond
To clear a mechanics lien for property sale, the owner must either pay the claimed amount or post a bond equal to 125% of the lien amount to discharge the lien.
Why This Is the Correct Answer
To clear a mechanics lien so a property can be sold or refinanced, the owner must either (1) pay the full claimed lien amount to satisfy and release the lien, or (2) post a surety bond equal to 125% of the lien amount to discharge the lien from the title. The bond substitutes for the property as security, allowing the sale to proceed while the underlying payment dispute is resolved separately.
Why the Other Options Are Wrong
Option A: Wait for the lien to expire
Waiting for the lien to expire is not a practical solution for a pending sale. SC mechanics liens can remain enforceable for up to six months (or longer if suit is timely filed), and no title insurer will close over an active lien. Sellers cannot simply wait.
Option C: Obtain a court order
Obtaining a court order alone does not discharge the lien. A court order might be sought as part of litigation to contest the lien's validity, but that process takes much longer than a closing timeline allows and is not the standard mechanism for clearing a lien at closing.
Option D: File a counter-claim
Filing a counter-claim is a litigation strategy that disputes the underlying debt but does not remove the lien from the title. Title companies will not close with a lien in place simply because a counter-claim has been filed.
Memory Technique
Remember 'Pay or Post': to close a sale with a lien on title, the owner must Pay the lien off or Post a 125% bond. Either action discharges the lien from the property so the deed can transfer clean.
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