Construction Collections Attorney

If you are a Colorado contractor or subcontractor, then payment is the life blood of your business. There is nothing more frustrating and detrimental to a small business than working on a project and not getting paid. If you have found yourself in this position, you may want to consult with a Colorado construction lien lawyer. As a Colorado real estate attorney, I have helped contractors, subcontractors, and material suppliers recover full compensation for the work and materials provided. I also help homeowners defend against invalid and spurious liens. Following is a brief overview of Colorado's construction lien laws and how I can be of service to you.

Colorado Mechanics Lien Statute

Colorado's Mechanics Lien Statute is codified at C.R.S. § 38-22-101, et seq. This law provides substantial recourse for Colorado contractors, subcontractors, and material men in situations where they have not been paid for their labor or materials on a construction project. In the event of non-payment, a contractor can file a "mechanics lien" against the construction project or property. After filing this lien, they can then file a lawsuit to foreclose on the property and obtain payment from the sale.

Mechanics Lien Timeline

Notice of Intent to Record Lien Statement: The first step to assert and enforce a Colorado mechanics lien is to file a "Notice of Intent to Record Lien Statement." Under C.R.S. 38-22-109(3), a contractor, subcontractor, or material man must provide the property owner and the general contractor notice of their intent to file a mechanics lien against the property ten days prior to filing the lien statement with the county clerk and recorder. This step is critical, as the failure to serve both the homeowner and prime contractor will void the construction lien. This notice must be personally served or sent via certified mail.
The Lien Statement: After filing the Notice of Intent to Record Lien Statement, the next step in the process is to file and record the Lien Statement. For day laborers, this must be recorded within two months after the last day of labor was provided. For all others, this must be completed within fourth months after the last day of labor was performed or materials were furnished.
Extending the Lien Statement: The Mechanic’s Lien statute does allow a contractor to extend the time to file the Lien Statement by filing a “Notice Extending Time to File a Lien Statement” in the county where the property is located. This notice must include: (1) the legal description and/or address of the property; (2) the name of the person with whom the lien claimant has contracted; and (3) the lien claimant’s name, address, and telephone number. Upon filing this notice, the claimants' deadline to file a Lien Statement will be extended to 4 months after completion of the structure/improvements or 6 months after the date the Notice was filed, whichever occurs first. The Notice automatically terminates 6 months after filing. If the structure/improvements have not been completed by that time, then prior to the termination date, the lien claimant may file an amended Notice that will be effective for an additional 6 months, or 4 months after the completion of the structure/improvements, whichever occurs first.
Foreclosure: After serving the Notice of Intent to Lien and filing the Lien Statement, the final step is initiating a foreclosure lawsuit. This lawsuit must be filed within 6 months from the last day that labor was provided or materials were furnished. If a lawsuit to foreclose a mechanic’s lien is not filed within that time, the contractor loses the right to foreclose the lien. C.R.S. 38-22-110.

Common Defenses to Mechanics Liens

Untimely Lien: A common defense to the assertion of a construction lien is that the procedural requirements of C.R.S. 38-22-101 were either not followed or were untimely. Because this statute requires a construction professional to strictly comply with its requirements, the failure to do so will act as a complete bar to foreclosure a mechanics lien. As such, it is always advisable to consult with an experienced Colorado construction lien lawyer to ensure that you are meeting all necessary requirements.
Excessive and Invalid Liens: Like the failure to follow the procedural requirements of the statute, a common defense to a mechanics lien is that the lien is excessive. Under C.R.S. 38-22-128, knowingly filing a mechanics lien for an amount greater than what is reasonably due will forfeit all lien rights and subject the lien claimant to liability for the owners attorney fees and costs.
Homeowner Defense: C.R.S. 38-22-102(3.5) provides the owner of a single family dwelling with an affirmative defense to a mechanics lien when they have paid the general contractor the full price for the work performed by a subcontractor or other lien claimant.

Colorado Construction Trust Fund Statute

Beyond the ability to file a construction lien against the property, subcontractors and material suppliers may have a claim against a general contractor who fails to pay under the Colorado Construction Trust Fund Statute. Under C.R.S. 38-22-127, general contractors must hold in trust all funds disbursed to them for the payment of subcontractors, laborers, and material suppliers. The contractor must also maintain separate records of account for each project or contract that accounts for the funds they have received for the benefit of subcontractors and suppliers. The failure of the contractor to do so will make them liable to the subcontractor or supplier for civil theft. Under Colorado's Civil Theft Statute, the contractor will be liable for attorney fees and three times the amount not held in trust.

Conclusion

As you can see, the mechanics of Colorado's mechanics lien statute are not always straightforward. There are often nuances to the statute. If you are a contractor or subcontractor, I would encourage you to speak with a qualified construction lien attorney to go over the project details and the statute. Additionally, if you are a homeowner faced with a mechanics lien, it would likewise be advisable to speak with a qualified real estate attorney to help guide you through the process. As a Colorado construction lien attorney, I have helped many homeowners and contractors effectively resolve mechanics lien disputes. I would be happy to discuss your project with you. If you would like to set up a time to personally speak with me, you may do so by clicking the link below. I look forward to the opportunity to work with you.