Connecticut House Bill HB05428

Connecticut 2020 Regular Session

• Introduced: 3/3/20
• Refer: 3/3/20

Caption

An Act Concerning Issues Relating To Mortgages And Mechanic's Liens.

Impact

In terms of legislative impact, this bill will revise current statutory provisions, effectively modernizing the way mortgage payments are accepted and the means of releasing liens. The introduction of rules that allow mortgages to be settled using a variety of payment methods—such as bank checks and wire transfers—aims to facilitate smoother transactions for property buyers. Moreover, the new guidelines concerning the acceptance of partial payments on residential mortgage loans seek to provide flexibility for borrowers struggling to meet full payment conditions.

Summary

House Bill 05428, titled 'An Act Concerning Issues Relating To Mortgages And Mechanic's Liens,' is designed to amend and streamline the process surrounding mortgage releases and mechanic's liens in Connecticut. The bill mandates that a mortgagee must promptly deliver a release to the town clerk and provide a certified copy to the mortgagor upon satisfaction of the mortgage. This provision is intended to ensure that all parties involved are effectively notified when a mortgage obligation has been fulfilled, minimizing disputes related to property encumbrances.

Contention

Notably, some points of contention have arisen around the proposed substitution of a bond for a mechanic's lien. Critics may raise concerns about the adequacy of protections for lienors, presenting the case that the substitution process could potentially favor property owners at the expense of those who provide labor and materials for property improvements. The requirement for the bond to be at least 125% of the claimed lien will also be scrutinized, as it reflects a balance between ensuring lienor security while providing property owners an avenue to contest liens without lengthy judicial intervention.