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Damien Bosco
Damien Bosco, Attorney
Category: Real Estate Law
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We are in discussions to do a construction project in Hawaii

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We are in discussions to do a construction project in Hawaii for a general contractor. The Owner's lender wants us to sign a "Contractor Indemnity Agreement Subordination". It looks as if the lender is having the title company issue an insurance policy against any possible lien claims on the project. We have never signed anything like this and wanted to know more about it.

Hello. My name is***** am an attorney. I will review your question. I may need to clarify facts first. I will answer & we can discuss issues.

By signing the it, you effectively state that any lien you would have on the home would be subordinate to the lender's lien. If you did not sign it and the owner failed to pay you, your lien would have priority. By signing it, your lien would not have priority. In other words, it is the contractor’s consent subordinating both (i) payment obligations under the construction contract to the payment obligations under the loan, and (ii) any mechanic’s liens to the lender’s deed of trust. We can discuss more if you would like to do so.

Customer: replied 6 days ago.
Thank you! I will start with this. Appreciate it!

You are welcome!

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