Mechanic’s Liens – Protecting Your Time and Investment - Hackstaff, Snow, Atkinson & Griess, LLC

Mechanic’s Liens – Protecting Your Time and Investment

Mechanic's Liens Construction projects open up general contractors, subcontractors and materials suppliers to a fair amount of financial risk, even with a thorough construction contract in place. As labor hours and materials costs ratchet up, contractors and suppliers need to have some recourse for recouping unpaid expenses. In Colorado, that protection comes in the form of mechanic’s liens.

Any contractor, subcontractor or materials supplier can file a mechanic’s lien against a property if they have not been fully compensated for the work performed or supplied materials within the contractually agreed upon timeframe. In some cases, architects, engineers and surveyors can also file mechanic’s liens in Colorado, if they can show their work was used in a specific project. A mechanic’s lien is separate from the construction contract, but may be mentioned in the payment terms as a possible action if payments aren’t timely.

Related: See Construction Contracts – 5 Key Provisions to Mitigate Risk 

Timing is crucial when filing a mechanic’s lien. Failure to follow the correct timeline can result in loss of lien rights. If you performed labor and supplied materials, the deadline is four months from the last date of work or delivery of materials. If you only provided labor, the deadline is two months after the last date of work. There are instances where these deadlines may be extended through a Notice of Extension through the county clerk. Properly calculating your timeline and including enough buffer if needed is the surest way to success.

Step 1 – Notice of Intent

A minimum of 10 days notice must be given to the owner or owner’s agent and the principal or primary contractor (or their agent). This notice must be served in person or through registered or certified mail, with return receipt, to the recipient’s last known address. An affidavit of personal service or the mailing must be recorded with the lien statement.

Step 2 – Preparing and Filing a Mechanic’s Lien

After the 10 day notice period, the lien may be recorded with the county clerk and recorder that corresponds with the property location. Here’s where the timing is crucial: You must ensure that the notice of intent and the 10-day period do not end after the four-month deadline for filing the lien. Otherwise, your lien rights will be forfeit.

Lien statements must include the names of the property owner and lien claimant, as well as the general contractor if the lien is being filed by a subcontractor. It should also include the property address and description and full amount due, and should be signed and sworn in front of a notary. 

Though you aren’t required to provide proof to the property owner that the lien was filed, it does show that you followed through with the process and are intent upon collecting the money owed.

It’s important to be accurate with the costs and amounts you are claiming, as overstating the amount owed can result in penalties, and possibly responsibility of the other party’s attorney fees.

Step 3 – Canceling the Lien or Enforcing Foreclosure

In many cases, the act of filing the lien leads to a positive resolution and the collection of funds. If that is the case, you must notify the county clerk of your satisfaction within 10 days of receipt of funds.

If the property owner does not pay the money owed or ignores the lien, you have six months to initiate collection, which may ultimately go before a judge for resolution.

Given the importance of deadlines and lien statement accuracy, it’s a good idea to have a knowledgeable attorney assist you through the process. Mistakes can cost time and ultimately, money. 

The attorneys at Hackstaff, Snow, Atkinson and Griess are well-versed in construction law and contracts, and can help you navigate the complexities. Contact us today for a free consultation.