Home>Levelset Community>Legal Help>GC's on jobs are putting language in the contract that says I cannot file a lien on the job under any circumstances, or send out any notices to the owner without their permission. Is that legal?"
GC's on jobs are putting language in the contract that says I cannot file a lien on the job under any circumstances, or send out any notices to the owner without their permission. Is that legal?"
I believe GC's are just wanting to make sure the communication is there between subs and GC's to get payment situations squared away, but their excuses are always owner hasn't payed. My questions is this legal to put in their contracts ?
1 reply
Jun 29, 2018
Unfortunately, Colorado is one of the very few states where a "no lien clause" (a clause eliminating the right to file a lien) is allowable in a contract. Granted, if it's in the contract, it might be wise to abide by the terms of the contract - plus, any notice that would have to go to the owner to preserve lien rights might be fruitless anyway if lien rights are waived in the contract. It's less clear whether a contract can bar a claimant from sending any notices to the Owner, but that seems excessive and tough to enforce. It's worth noting that not all no lien clauses will be effective to waive lien rights, though. So abandoning attempts at notice might not always be the right call, either. This article from Schunk & Associates provides a solid overview of the issue: No Lien Clause in Contract. While it's truly unfortunate that no lien clauses are enforceable in Colorado, there are other methods for recovery available. This includes legal claims (such as breach of contract or unjust enrichment) or an action in small claims court if nonpayment becomes an issue. Ultimately, the best way to determine the validity of a no lien clause might be to consult a local construction attorney and have them evaluate the contract. They'll be able to provide a more in-depth analysis of the contract in question.