Understanding Colorado mechanics lien laws
Colorado’s mechanics lien laws provide substantial protection for contractors and suppliers. However, there are many requirements that must be followed in order for a construction participant to qualify for, maintain, perfect, and enforce lien rights. This page provides frequently asked questions about Colorado’s mechanics lien laws and rules, the lien statutes, and a breakdown of the lien and notice details for contractors and suppliers in Colorado.
You may want to consult our Step-by-Step Guide on How to File a Colorado Mechanics Lien
Who can file a Colorado mechanics lien
Colorado law is extremely expansive in the parties it allows to file mechanics liens. Mechanics liens in Colorado are available to any “person who furnishes or supplies laborers, machinery, tools, or equipment in the prosecution of the work, and mechanics, materialmen, contractors, subcontractors, builders, and all persons of every class performing labor upon or furnishing directly to the owner or persons furnishing labor, laborers, or materials to be used in construction, alteration, improvement, addition to, or repair, either in whole or in part of any building.”
Architects, engineers, draftsmen and artisans are also allowed to file a mechanics lien in Colorado, and even personnel agencies who supply labor. Further, those who furnish specially fabricated materials may be entitled to file a mechanics lien even if the contract is canceled pre-installation and the materials are never incorporated into the property.
Two categories of CO mechanics liens: Section 101 & Section 105
Colorado has two categories of mechanics liens. One is referred to as the Section 101 mechanics lien, and this is what contractors and suppliers file when the work is commissioned directly by the property owner.
If, on the other hand, the work is commissioned by a tenant, the filing is referred to as a Section 105 mechanics lien. The property owner has the burden of posting a “Notice of Non-Liability” within 5 days of the start of the project (or becoming aware of the start of construction) to avoid lien liability.
Colorado notice requirements
There are no “preliminary notice” requirements at the outset of the construction project to secure mechanics lien rights. However, all potential claimants are required to give the property owner, reputed owner, or owner’s agent, a Notice of Intent to Lien (as well as a copy of the Statement of Lien that will be filed) at least 10 full days prior to the filing of the Colorado mechanics lien. Sending a Notice of Intent will not extend your lien deadline. Accordingly, you must plan to send this Notice of Intent to Lien with sufficient time (at least 11 days later) to file your mechanics lien.
Also, any party other than the prime contractor is allowed to file a Notice to Owner that has the effect of requiring the owner to withhold funds to ensure payment of the notifying party.
Filing a mechanics lien in Colorado
Filing a Colorado mechanics lien is a fairly simple process. This involves filling out a Colorado Statement of Lien and sending a copy of the claim along with a Notice of Intent to Lien at least 10 days prior to filing. Once the 10-day period has passed, the Statement of Lien needs to be filed in the county clerk’s office where the property is located.
Information to include in a Colorado lien form
To properly file a Colorado mechanics lien, the claim must contain all of the required information. This includes:
- Owner’s information
- Claimant’s information
- General contractor’s information (note: if you don’t have this information, include a statement that the identify of the GC is unknown)
- Property description
- Lien amount
- Affidavit of service (of Notice of Intent to Lien)
Deadline to file a Colorado mechanics lien
In Colorado, the deadline to file a mechanics lien depends on the claimant’s role and the type of project.
- For all lien claimants except laborers who don’t provide any materials to the project, Colorado law requires that a Statement of Lien must be filed by no later than 4 months after the last day labor or materials were provided to the project – punch list items and remedial work do not count to extend the time period.
- For laborers who did not provide materials to the project, the lien must be filed after the last labor was performed and within 2 months of the completion of the improvement.
- For a one or two family home, the normal 4-month period in which a mechanics lien may be filed is shortened to 2 months if there is a bona fide purchaser of the dwelling.
Releasing a Colorado mechanics lien
If you’ve been paid, you will be required to file a lien release (known as an Acknowledgment of Satisfaction) within 10 days of receiving written request from the owner to do so. Failure to release the lien within that time period can make the claimant liable for $10 per day until the claim is released.
Enforcing a Colorado mechanics lien
If you haven’t been paid, a Colorado mechanics lien must be enforced through a lien foreclosure action within 6 months of the date the project was completed, or the last date labor or materials were furnished to the project; whichever is earlier.