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Mechanics’ Liens:

Private Construction:

 

A materialman or contractor may lien a construction project for all materials and labor which are incorporated into improvements on the land.  Lienable items do not include most tools, gloves, and other items which are not consumed on the job.  In order to file a mechanics’ lien against any project, a claimant must generally prove completion of work and materials supplied to the site.  This is usually done by producing invoices and contracts showing the specific address of the job site where the work was performed or the materials were delivered.

The amount of a mechanics’ lien must be very accurately stated, which means that all credits and partial payments must be taken into account to calculate the amount due.  To prepare a Statement of Lien, a lawyer needs to know the owner of the project and the name of the general contractor.  Any information a client can provide saves time.  Beware:  a mechanics’ lien that overstates the amount owed may be deemed invalid by the Court.


Construction b smCommercial Buildings
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A supplier of materials or subcontractor must file a mechanics’ lien within 4 months after its last delivery of materials or work performed is made to a project.  To determine the date of last delivery, you must inspect the sales order or labor records and not rely on the invoice date, as the information may have been input several days after actual date of the work on the job. In order to file a valid mechanics’ lien, a Notice of Intent must first be filed (ten days prior to recording Statement of Lien), so it is important that you provide your lawyer with the necessary information, at the latest, 110 days after the date of the last delivery of materials or work performed.

A mechanics’ lien is not the final action and does not guarantee payment.  A mechanics’ lien must be foreclosed on in the District Court not later than 6 months from your last work or 6 months from completion, whichever is later. Lawyers do not automatically foreclose on liens without instructions from a client.


Single Family Residences
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Colorado law imposes restrictions on liening single-family homes which are the primary residence of the person who paid to have the home remodeled or built.  The law protects homeowners who have paid their contractors in full for the work performed against subsequent liens by suppliers or sub-contractors.

Since many homes may be completed soon after a supplier provides drywall, millwork or roofing materials, this information should be supplied to your attorney within at least 75 days from the date of delivery.

It is recommended that you carefully monitor your accounts that do residential remodeling and roofing.

 Is a Job Worth Liening?:

 

Any debt over $1,000.00 is worth liening.  Many times an owner, bank, or buyer will pay off liens to secure permanent financing on new jobs or to refinance loans.

It is rarely worth foreclosing on a mechanics’ lien in an amount of less than $10,000.00.  However, you may still sue a solvent customer in the County Court for breach of contract.

 

Bankruptcy/Business Failures:

 

If a claimant receives notice that its customer filed bankruptcy, it is very important to turn over to your attorney all invoices for goods supplied to that customer so that all work can be immediately liened.  A mechanics’ lien secures the claim and allows a claimant to get paid even when the unsecured creditors do not get paid.

State, County, and Municipal Public Works Bond Claims:

 

A claimant may not file a general mechanics’ lien against government-owned projects.  Instead, a claimant must file a verified claim with the government and/or sue the bonding company for the amount due.  Verified claims should be filed before the advertised settlement date of the project.  This date can be obtained from the contract officer working on the project for the public entity.  As a general rule, information concerning past due accounts for labor or goods supplied to government jobs should be supplied to your attorney the sooner of 60 days after last invoice or 30 days before the date of completion. The government entity must be sued within 90 days of the advertised settlement date. Claims against the bonding company must be filed, as stated in the bond; it is usually within six months after completion of the work.

Federal Construction Projects:

Under the Federal Miller Act, a claimant who furnished labor or materials to a subcontractor must give written notice to the principal contractor of the amounts due and owing within 90 days from the last date of delivery of materials or work performed.  Contractors who deal directly with the principal contractor do not have to give notice.

Action against the bonding company must be filed within one year (generally) of the last work performed on the project.

 

All of the above are general rules and guidelines.  You should contact an attorney immediately if you have any questions concerning mechanics’ lien issues that you have in Colorado.