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Is the Lender required to file and record a Disburser's Notice prior to our first draw being funded to our GC?

Colorado
Anonymous Contractor

We are a Lender starting to offer construction financing in the CO area and have been told that it is our obligation to file a "Disburser's Notice" prior to advancing any funds to our GC on M&M Lien Contract. If this is the case, where I can locate the Disburser's Notice to be used? Any assistance regarding this matter would be very helpful.

2 replies

Attorney at Pivotal Legal Ltd
| 85 reviews
Oct 26, 2021

There is no standared form disburser notice. You speak with construction counsel and they draft it. Once you have the form, you can revise as necessary for each project. The information required in that notice is in C.R.S. § 38-22-126(2). However, there is no penalty for failing to do this notice. It can create potential risks down the road if a notice to disburser is received. 

You really should have experienced counsel to help with this as construction lending is extremely complicated and requires solid agreement and advice. If this business has multiple members or shareholders, your attorney will also advise you about a proper written shareholders' or opearting agreement. Reach out and get a consultatation. Most of us offer free consultations. 

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Managing Member at Abrams & Associates, LLC
| 9 reviews
Oct 27, 2021
Title 38 has the disburser's notice.
Robert (303) 322-4115
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