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An owner wants to transfer a $40,000 claim of lien from the property to a surety bond. Besides the $40,000 and interest at the legal rate for 3 years, what must the bond include?

Correct Answer

C) $10,000, being 25 percent of the amount demanded, since that exceeds $5,000

The fees-and-costs component is the greater of $5,000 and 25% of $40,000. The latter is $10,000, so that amount is added alongside the claimed principal and specified interest. This is the additional component, not the full security amount. Source: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0713/Sections/0713.24.html

Answer Options
A
Nothing further; the amount demanded plus interest is the whole bond
B
$5,000, because the statute names a flat amount for attorney fees and court costs
C
$10,000, being 25 percent of the amount demanded, since that exceeds $5,000
D
$2,000, being 5 percent of the amount demanded

Why This Is the Correct Answer

The fees-and-costs component is the greater of $5,000 and 25% of $40,000. The latter is $10,000, so that amount is added alongside the claimed principal and specified interest. This is the additional component, not the full security amount. Source: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0713/Sections/0713.24.html

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