A mechanic's lien is a means of enforcing payment for construction work in Colorado. When a mechanic's lien is placed on a property, the owner will not be able to sell or refinance the property until they settle the debt or post a separate bond for the amount of the lien. If the debt is not paid for some time, the lien holder may be able to force the sale of the property with the proceeds going to pay off the debt.
Any party providing labor or supplies at a construction site can file a mechanic's lien. This includes the prime contractor, subcontractors, laborers, material suppliers, and others. While subcontractors and others may file a lien against the property even if they had no direct contract with the property owner, they should first check for a payment bond posted by the prime contractor or other party who they did contract with. Payment bonds are often used to protect the property owner and/or prime contractor from claims for nonpayment by subcontractors and laborers. They are easier to place a claim on than it is to enforce a mechanic's lien because cash has already been posted.
Proof of monies owed will be needed to enforce a mechanic's lien. While a written contract is preferred, any proof showing expenditures on the project will be accepted. For example, a day laborer may have had an oral contract to perform services but may be able to prove when they worked via receipts for gas, meals near the job site, or tools or through the testimony of a witness who saw them at the job site.
The deadline depends on why payment is due. Laborers, sub contractors, or contractors who only performed services have two months from the last services performed to file a lien. Those who provided materials or supplies, either as a contractor or sub contractor who also performed services or as a supplier only, have four months from the last delivery of services or materials. In any case, the lien must be enforced within six months after filing.
Before filing a lien, the contractor, sub contractor, supplier, or laborer must provide a notice of intent to file a lien. This notice must be given at least 10 days before the lien is filed. The notice must include the amount owed, specify what services or supplies it is owed for, and include a copy of the lien that will be filed. Don't wait until the last minute to send notice because a lien cannot be filed without notice and both the notice and lien filing must be made within the two or four month deadline.
To learn more about filing a mechanic's lien in Colorado, contact Miller & Law, P.C. today.