I am trying to get information on a project in the state of Colorado. My company is a general contractor and we have done work for a public/government job. I am trying to find out if a lien can be filed against this project.
1 reply
May 6, 2019
That's a good question. Generally, when performing work for public projects and/or on publicly owned land, lien rights will not be available - public property is typically not susceptible to lien claims. Payment bonds provide much of the security that mechanics lien rights provide on private jobs, but payment bonds are very typically secured by the project's prime contractor and only provide payment security for subs, suppliers, or other down-the-chain parties. For prime contractors on public jobs, there aren't really any great options for payment security since it's assumed that the public entity will pay their debts and generally pay on time. Rather than tools like mechanics liens and bond claims, prime contractors on public projects typically must go straight to leveraging, and potentially filing, legal claims when payment problems occur. Of course, Colorado's prompt payment laws help to make sure prime contractors are paid on time for their work on public projects. And, if payments aren't made on time, the public entity may have to pay interest on top of what they owe to their prime contractor (at a rate typically around 8% in Colorado). But if worse comes to worst on a Colorado public project, merely threatening a legal claim (like a prompt payment claim or breach of contract claim) if payment isn't made might be enough to compel payment before legal action becomes necessary.