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Validity of mechanical lien, unlicensed contractor, no written contract, incomplete work

I live in Colorado. I hired an unlicensed contractor install flooring and baseboard/ trim in my basement 3 weeks ago. The flooring installation was complete. They were paid $2000. I found out the follow day jewelry was stolen by one of the workers, who eventually confessed. I stopped the project and fired them. A police report was filed. No baseboards installed. Now contractor is threatening to put a lien on my house because I owe him $1700. No written contract. Is this lien valid and how can I fight this?

3 replies

Feb 19, 2020

The Colorado mechanics lien statute doesn't impose any sort of licensing requirement in order to preserve the right to lien. So, generally, an unlicensed contractor could be fully entitled to mechanics lien rights. Regarding written contracts - § 38-22-101(3) of the Colorado mechanics lien statute specifically calls for written contracts when work exceeds $500. However, the statute doesn't explicitly state that lien rights won't be available if the agreement isn't a formal, written contract. So, it's possible that a lien claim could still be appropriate if there's documentation to support the claim. Finally, regarding the completion of work: A Colorado mechanics lien claimant doesn't need to wait until the project is complete in order to file their mechanics lien. Of course, lien rights will only be available for work that's actually been performed. So, if a claimant wasn't fully paid for the work they did perform - that might give rise to a valid mechanics lien. But, the claimant wouldn't be able to just lien amounts that were agreed to but not actually owed for the work that they did or materials that they provided.

How to fight off a Colorado mechanics lien

The easiest way to fight off a Colorado mechanics lien is to prevent it from being filed in the first place. Discussing the matter with the contractor and convincing them to refrain from filing a lien would likely be a good first step. And, negotiating some partial payment in exchange for a lien waiver could help here too. If talking out the issue won't work, it might also be helpful to point out any flaws with the prospective lien claims. If a contractor's lien claim would be improper for some reason - like for including exaggerated amounts or failing to abide by the Colorado mechanics lien rules - an owner might be able to convince the claimant to drop the idea of filing a lien. To be sure, under CRS § 38-22-128, exaggerated mechanics liens will result in the loss of lien rights and even additional damages if the owner has to challenge the lien claim. The threat of a mechanics lien claim is very serious, though. So, if a lien claim has been threatened against your property, then it might be time to consult a local Colorado construction attorney. They'd be able to review the threat of lien as well as the relevant project documents and details, then advise on how best to move forward and avoid a lien claim. Lastly, these resources might be helfpul: (1) I Just Received a Notice of Intent to Lien – What Should I Do Now?; and (2) A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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Feb 19, 2020

In this situation, the contractor did not disclose an amount prior to completion of work and payment was to be determined upon completion of work. Once cost of stolen jewelry was disclosed, he inflated cost of floor prep to $1700 which was applying self leveler That I bought. That seems pretty exaggerated. If there is no documentation, his claim does not seem valid. Wouldn’t he have to prove the work that he did?

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Feb 19, 2020

Also, isn’t theft a breach of oral contract?

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