Everybody knows that Colorado a beautiful state. And there are a lot more folks that are enjoying that beauty first-hand, since Colorado is home to Denver which is one of the country’s fastest growing large cities. There are also several other metro areas in Colorado that are bursting at the seams such as Boulder, Colorado Springs, and even some of the once sleepier mountain towns.
Love it or hate it, all of that growth means that Colorado’s construction industry is also experiencing tremendous growth, and it shows no signs of slowing down anytime soon.
When it comes to getting paid on a Colorado construction project, there are several things that people in the industry must know, including certain rules and requirements that must be followed, and certain documents that must be used.
One of those “important-in-Colorado” documents is the Notice of Intent to Lien, a document that’s required in Colorado. Please read on for an overview of this notice and why it matters in the state of Colorado.
What Is a Notice of Intent to Lien?
The Notice of Intent to Lien is best thought of as the construction industry’s equivalent of a demand letter or dunning letter, with one notable exception: unlike a typical demand letter, sending a Notice of Intent to Lien actually works!
Notices of Intent are so effective at prompting payment for money owed on construction projects because the fear of having a lien filed on a project is just that great. After all, a successful mechanics lien claim could mean that the property owner ends up losing their property to satisfy the debt.
Because of this, the upper-tiered parties on a project (typically, the owner and the general contractor) will do just about anything in their power to prevent a lien from being filed. The Notice of Intent gives the paying parties one last chance — one final warning — to get the payment issue settled before a mechanics lien is filed.
Therefore, a Notice of Intent is a great way to get everyone’s attention and prompt a payment.
Sending a Notice of Intent is Required in Colorado
Before a mechanics lien can be filed in the state of Colorado, the future claimant must send a Notice of Intent to Lien. This requirement is strictly enforced.
This puts Colorado in the minority of states nationwide that require a Notice of Intent be sent before a mechanics lien can be filed.
However, the Notice of Intent to Lien document is so effective at prompting payment (as discussed above), that here at Levelset, we recommend that construction companies send a Notice of Intent on every project where they’re experiencing payment issues.
In Colorado, the Notice of Intent must be sent 10 days before a mechanics lien can be filed. And sending the Notice of Intent does not extend or change the deadline to file a mechanics lien in any way.
This means that in the state of Colorado, the practical deadline to file a mechanics lien is really 10 days earlier than what the law says. So, waiting until the last minute to file a mechanics lien can be disastrous, since the real deadline is even earlier than the deadline that’s spelled out in the law.