Home>Levelset Community>Legal Help>I have obtained a "Release of Lien Bond" but the lien claimant has filed suit to foreclose on the lien. Do I need to file the lien with the court for approval and then obtain a specific document from the court to record, or just record the release of lien bond?

I have obtained a "Release of Lien Bond" but the lien claimant has filed suit to foreclose on the lien. Do I need to file the lien with the court for approval and then obtain a specific document from the court to record, or just record the release of lien bond?

I have just obtained a bond to satisfy a lien but the lien claimant has already filed suit to foreclose on the lien. I would like to record my "Release of Lien Bond" with the county recorder but the lien statutes are confusing. The statutes suggest that I need to have the court "approve" my bond , then the clerk issues some sort of certificate that I would then record.

1 reply

Jul 24, 2018

That's understandable - mechanics lien laws can be plenty confusing on their own, and bonding off a lien throws another wrench into that process. Under § 38-22-131(1) of the Colorado mechanics lien statute, to bond off a lien, an interested party may "file with the clerk of the district court of the county wherein the property is situated a corporate surety bond or any other undertaking which has been approved by a judge of said district court." So, to be effective, the bond must be filed with the clerk of the district court. But, based on § 38-22-131(2), the bond must also be approved by a judge. That section states: "Such bond or undertaking plus costs allowed to date shall be in an amount equal to one and one-half times the amount of the lien plus costs allowed to date and shall be approved by a judge of the district court with which such bond or undertaking is filed." While the statute states that the bond must both be filed with the clerk of the district court and that it must be approved by a judge of the district court - the timing of these actions aren't particularly clear under the Colorado mechanics lien statute. If you abide by the order in which each action is listed in the lien statute, it would appear that the bond would need to be recorded with the clerk of court first. However, logically, it might make more sense to seek approval of the bond before recording it. § 38-22-132 of the lien statute doesn't provide much clarity either, unfortunately. It states: "...upon court approval of a bond or undertaking as provided in section 38-22-131, and upon the issuance and recording of a certificate of release as specified in this section, the lien against the property, and any notice of lis pendens or notice of the commencement of any action relating to such lien, shall be immediately discharged and released in full..." In that section, it sounds like the court approval might come first and the recording with the clerk might come after. Ultimately, though, the statute does not provide a definitive answer here. So, it will be up to a claimant's discretion as to which to attempt first. Reaching out to a local construction litigation attorney should help provide some insight here - they will be able to provide advice on how to proceed. Plus, considering a lien enforcement action is in play, an attorney should be hired anyway. Battling a lawsuit without legal aid is typically a very bad idea.

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