Which type of bond guarantees that liens cannot be placed against the owner's property for payment of services?

Prepare for the Arkansas NASCLA Contractors Exam. Use flashcards and multiple choice questions, each with hints and explanations, to master your exam material.

The correct choice is a lien bond, as it specifically serves to protect a property owner from claims that could arise from liens due to unpaid services or materials. A lien bond is essentially a guarantee that will ensure that if a contractor or subcontractor has not been paid, they cannot place a lien on the property. Instead, the bond provides financial security by ensuring that payment obligations are fulfilled, thus preventing any legal encumbrances on the owner's property.

In construction and contracting, lien laws allow parties involved in the project to claim a lien against the property if they are not paid for their work or materials supplied. By obtaining a lien bond, property owners can mitigate this risk, ensuring that construction projects can proceed without the threat of future liens. This is particularly important in maintaining clear title to the property and ensuring that owners are not held liable for the non-payment of a contractor or subcontractor that they did not directly employ.

Other types of bonds, while essential in their respective contexts, do not provide this specific protection against liens. Performance bonds assure completion of work according to contractual terms, payment bonds guarantee that workers and subcontractors are paid, and indemnity bonds protect against losses or damages incurred during a project. However, none of these provide the direct guarantee

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