How can builders limit liens filed by subcontractors and suppliers?

Filing a surety bond is a reliable strategy for builders to limit liens that may be filed by subcontractors and suppliers. A surety bond acts as a financial guarantee that ensures the contractor will fulfill their obligations, including making payments to subcontractors and suppliers. In the event that the contractor fails to pay, the surety bond can cover the unpaid amounts, thus providing a layer of protection for the subcontractors and suppliers. This assurance can deter them from filing liens against the property because they have a recourse through the bond if payment issues arise.

The other options do not offer viable solutions to limit liens effectively. Increasing project costs may lead to financial strain and does not address the underlying payment issues. Providing cash bonuses might incentivize performance but would not directly influence the risk of liens. Shortening project timelines could potentially lead to rushed work and overlooked payment schedules, which might increase rather than decrease the likelihood of disputes and liens. Therefore, the best answer in this context is the surety bond, as it directly mitigates the risk of liens through enhanced financial security and assurance for all parties involved.