What is the best method for a homeowner to protect their property from being liened when signing a Home Improvement contract?

What is the best method for a homeowner to protect their property from being liened when signing a Home Improvement contract?

• A. Require the contractor to provide a written guarantee
• B. Hire an attorney to review the contract
• C. Require the contractor to supply a performance and payment bond
• D. Pay in cash to avoid third-party claims

Answer: (C)

Requiring the contractor to supply a performance and payment bond is a highly effective method for homeowners to protect their property from being liened when signing a Home Improvement contract. A performance bond ensures that the contractor will complete the work as agreed, and if they fail to do so, the bond provides financial assurance to the homeowner that they can recover losses. A payment bond specifically guarantees that the materials and labor used in the project will be paid for, thereby preventing any lien claims from subcontractors or suppliers. This is crucial because if the contractor doesn't pay the subcontractors or suppliers, those parties can place a lien on the homeowner’s property for the unpaid amounts. By requiring these bonds, the homeowner adds a layer of security that minimizes the risk of facing lien issues, making it one of the best strategies for protection in a construction contract scenario. Other approaches like hiring an attorney or paying in cash might provide some level of protection, but they do not directly address the risk of liens as effectively as requiring bonds. An attorney can help with contract review and advise on legal matters, while paying in cash does not guarantee that subcontractors or suppliers will not file liens if their payments are not made by the contractor. Thus, performance and payment bonds specifically target the problem of

Requiring the contractor to supply a performance and payment bond is a highly effective method for homeowners to protect their property from being liened when signing a Home Improvement contract. A performance bond ensures that the contractor will complete the work as agreed, and if they fail to do so, the bond provides financial assurance to the homeowner that they can recover losses. A payment bond specifically guarantees that the materials and labor used in the project will be paid for, thereby preventing any lien claims from subcontractors or suppliers.

This is crucial because if the contractor doesn't pay the subcontractors or suppliers, those parties can place a lien on the homeowner’s property for the unpaid amounts. By requiring these bonds, the homeowner adds a layer of security that minimizes the risk of facing lien issues, making it one of the best strategies for protection in a construction contract scenario.

Other approaches like hiring an attorney or paying in cash might provide some level of protection, but they do not directly address the risk of liens as effectively as requiring bonds. An attorney can help with contract review and advise on legal matters, while paying in cash does not guarantee that subcontractors or suppliers will not file liens if their payments are not made by the contractor. Thus, performance and payment bonds specifically target the problem of