In Colorado, as with most states, liens are created by statute. As a result, for a party to take advantage of the protections and rights afforded by liens, there must be strict compliance with the required statutory steps to impress a lien on a non-complying party. Failure to strictly follow the statute can result in fees and costs being assessed against the lienor.
Liens can be placed on personal and real property in a variety of situations. A judgment lien occurs after trial or by default and can encumber real or personal property, by the recording of the transcript of judgment. By law, the lienor is entitled to statutory interest of 8.0% or at the rate of interest as agreed to by the parties. A mechanic’s or materialman’s lien is a result of providing services and/or product, which remains unpaid after demand.
If the contractor only provides services, the notice of intent to file a mechanics lien must be filed within 2 months of the last date of services performed. If the Contractor provided goods and services, he has 4 months to file a notice of intent to file a mechanics lien from the date of the last day of services performed or substantial performance, whichever occurs first.
Commonly, the application of mechanics liens occur in the area of construction law by suppliers of materials or subcontractors performing day labor or project labor, but often errors occur in the legal description of the property where improvements occurred, improper and/or untimely notice, excessive charges, and or improperly filing. While not often contemplated, liens can result for automotive services, laundry services, and even for farming and ranching services.
If the steps are correctly and timely followed, liens can be a powerful and effective negotiating tool for a party to obtain payment. As an example, by placing a valid lien on property, the party can effectively avoid an imminent transfer of title and obligate the non-paying party to satisfy the amounts in controversy.
Often misunderstood is that suit on the lien must be filed within 6 months of substantial performance or the date of last services performed, whichever occurs first; otherwise, the lien is not enforceable.
For purposes of brevity,
this brief synopsis discusses the most often-used lien which arises in the field of construction law- the mechanic’s and materialman’s liens.
Lienors, within a relatively short period of time, must give proper Notice of the Intent to File a Lien to the non-paying party. Those requirements of proper notice are set forth in the lien statute, C.R.S. § 38-22-101, et seq. In the event the non-paying party fails to address the issues as set forth in the Notice, the lienor then is entitled to file and record a Lien Statement with the Clerk and Recorder in the county in which the services were performed. However, a cautionary note and as mentioned above, failure to properly and timely follow the steps to impress a lien on property can result in attorney’s fees and costs being assessed against you.
Unfortunately, when lienors represent themselves, what commonly occurs after compliance with the statutory notice provisions of the lien, is that the lienor fails to commence litigation within six months after the last day of services performed or substantial performance, whichever occurs first. As a result, the lien must be removed and the party must commence litigation based on other legal theories of relief, such as contract (oral or written), quantum meruit, or unjust enrichment.
If you have legal questions regarding mechanics and or judgment liens, we represent local construction companies, roofers, materialmen, suppliers, involving non-payment of services or materials. We represent owners, architects, general contractors, subcontractors, day laborers, and other third parties, such as realtors, appraisers, and surveyors. We also assist aggrieved parties, such as homeowners, property owners who are subject to improper and/or excessive liens.
Our primary focus is to maximize your return and achieve of the benefits of your work as fully permitted by law. We may accept cases on a straight fee, contingency fee, flat fee, and/or a hybrid of contingency and straight fee basis.