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How do I protect my rights on a public job when the site is shut down because of COVID?

I was hired by a Colorado GC to install as specified in the plans provided by the architect (this included which specific products to install). There is an issue with the manufacture of the products themselves, but they were installed properly. I am being told that I have punch list items to complete because the products are not working correctly. The products are defective, but install was correct. The GC should have already received 3 draws on this project, but is saying they have not received any payment. There is a pay when paid clause in the contract. The project is in CO. Due to the corona virus, the site (it is a visual arts center owned by a university) is shut down so I couldn't do the punch list even if I wanted to. What steps do I need to take to preserve my lien rights? How can I send an NOI when they aren't even open?

17 replies

Mar 19, 2020

Construction sites all over the country will be shutting down to COVID-19, and there isn't all that much precedent for situations like this one. But, there are some general principles we can draw from. Additionally, it sounds like there are some other topics worth looking into.

How will COVID-19 closures affect requirements?

There isn't really a playbook for this sort of thing. In extreme situations, it's possible that timing and deadlines for documentation could become more lenient. However, hope isn't a strategy. Assuming that your deadline and other requirements will be strictly enforced, regardless of the outbreak, will be the safest way to proceed. Regarding sending a Notice of Intent - if a lien claim will be the appropriate remedy (more on that below), then it's important to follow the required steps for preserving that lien right. In Colorado, that means sending a Notice of Intent to Lien. And, again, it's a good idea to assume that all requirements will be strictly enforced. So, mailing a Notice of Intent, as required, should still be done if a lien claim will be pursued. And, ultimately, whether or not the recipient is closed for business is more or less irrelevant since it's entirely out of your hands. If they don't receive the mail, then at least that won't be because it wasn't mailed, as required. What's more, keep in mind that Colorado's Notice of Intent rules never actually require actual receipt. Rather, when properly mailed to the correct address, an NOI is effective once it's been mailed.

Is the project public or private?

For one, it's worth looking into whether the project should be considered public or private. When work is being done which permanently improves publicly owned property, mechanics lien rights generally won't be available - and a bond claim or a claim on contract funds may be the more appropriate remedy. Though, when both public and private resources are being used, it can be hard to determine whether the job should be considered public o private, for the purposes of securing payment. To determine whether the job is subject to bond claims or subject to mechanics lien claims, it might be worth asking the GC or architect whether the project has a payment bond present. Alternatively, looking into the ownership of the property will help to clear things up since, typically, if the land is public owned then a bond should be present. But, if the job is public, then this resource should be valuable: Colorado Bond Claim Guide and FAQs

When is your deadline?

The deadlines are different for public and private projects in Colorado.

Colorado's mechanics lien deadlines

If the project is private and a mechanics lien is appropriate, then the deadline will typically be 4 months after your last furnishing date. However, if you've only provided labor to the project (and no materials, equipment, etc.), then the deadline changes to 2 months after the completion of the project. In either case, punch list work will usually not work to extend the deadline. And, it's typically safer to play things conservatively and assume the lien deadline will be sooner than later.

Colorado's deadlines for bond claims and claims on funds

There isn't actually a deadline for sending a bond claim to a surety. Instead, the state of Colorado allows claimants to proceed directly to filing a lawsuit against the bond. That lawsuit must be filed within 6 months of the completion of the project - but, providing the surety and GC notice of the claim well before that can help to avoid the dispute getting out of hand. For claims on funds, the timeframe for making a claim doesn't have a hard deadline, either. Rather, the claim must simply be made within 90 days of the completion of the contract.

What to do about defective materials?

If the materials are defective, then the parties who arranged for those materials to be used (i.e. the party supplying those materials and the party who hired that material supplier) will have to sort things out. Generally, there should be a warranty on the supplies. So, if it can clearly be shown that the materials were faulty, then someone should coordinate how to remedy that situation with the supplier. But, it may be an uphill battle to clearly show that the issues are being caused by the material and not the installation.

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Apr 6, 2023

To preserve your lien rights, you should serve a Notice of Intent to Lien (NOI) to the GC and property owner within the statutory time frame. The NOI should include the amount owed, the work done, and the property's description. If the site is closed, you may serve the NOI via certified mail or email. You should consult a local attorney for specific guidance. https://www.gmglobalconnect.me/

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