Home>Levelset Community>Legal Help>My client whom I filed a lien on his property has an attorney that responded to the lien. He said my lien was fraudulent and that the work I did was a simple proposal. That with out actual work on the site I had no lien rights. Is this correct?
My client whom I filed a lien on his property has an attorney that responded to the lien. He said my lien was fraudulent and that the work I did was a simple proposal. That with out actual work on the site I had no lien rights. Is this correct?
Waiting to get paid and an attorney contacted me with a threat of fraud
Aug 8, 2018
First, it's worth noting that alleging a lien claim as fraudulent is often a knee-jerk reaction from a claimant's customer, the GC, or the property owner. We wrote about that idea here: My Lien Was Challenged — What Do I Do?.
Anyway, as a very broad rule, typically mechanics liens should only be filed when property has been improved by the claimant resulting from construction work performed at the site. Of course, some (but not all) states provide the ability to lien for professional services prior to construction. Even then, that work must be authorized in order to be lienable - if the work was not agreed to by the property owner (or their agent - such as the GC), then the work will not be lienable. And finally, regarding lien claims for pre-construction work, typically the improvement must actually be built/undertaken in order to give rise to lien rights.
Regarding Colorado's lien statute: certain parties who perform pre-construction work may have the right to lien. This includes, under § 38-22-101 of the CO lien statute, "architects, engineers, draftsmen, and artisans who have furnished designs, plans, plats, maps, specifications, drawings, estimates of cost, surveys, or superintendence, or who have rendered other professional or skilled service, or bestowed labor in whole or in part, describing or illustrating, or superintending such structure, or work done or to be done, or any part connected therewith..."
These parties will have a lien on the given project property when they have "furnished laborers or supplied machinery, tools, or equipment or rendered service or bestowed labor or for which they have furnished materials or mining or milling machinery or other fixtures, for the value of such laborers, machinery, tools, or equipment supplied, or services rendered or labor done or laborers or materials furnished, whether at the instance of the owner, or of any other person acting by the owner’s authority or under the owner, as agent, contractor, or otherwise..."
The bottom line here is that, under specific scenarios, a lien might be filed for pre-construction work that was performed. However, amounts for work that was not authorized or amounts for work not performed will not serve as the basis for a valid lien. Regarding assertions of fraud - there's a difference between an honest mistake and a fraudulent lien. But, in Colorado, "Any person who files a lien under this article for an amount greater than is due without a reasonable possibility that said amount claimed is due and with the knowledge that said amount claimed is greater than that amount then due..." may forfeit their lien rights and become liable for the owner's costs and attorney fees. Because the stakes are raised, and because the property owner appears to have retained their own legal counsel, it would be wise to consult a local construction attorney familiar with Colorado lien claims. They will be able to review all of the relevant information, documentation, and communications and provide advice on how to proceed.
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