Home>Levelset Community>Legal Help>What recourse do we have if it is past the deadline to file a lien?

What recourse do we have if it is past the deadline to file a lien?

We have a customer we completed a roof for in July of 2019. The customer has not paid us. Part of the time, the customer was waiting for his insurance company to release the depreciation so that the customer could turn around and pay us. We do not know how long that took. There were two items that the customer wanted addressed before he would pay us. One, he finally realized was not our responsibility. Once that was resolved, we immediately fixed the second item. That was near the end of October. We still have not been paid and would like to file a lien, but fear that it is too late to do so now. Our contract included that we would charge interest and we would like to also recoup that as well now. What recourse do we have?

1 reply

Dec 17, 2019

First, let's look at Colorado's mechanics lien deadlines to get a clearer picture on the timeframe for filing liens. Then, we'll dip into some other recovery options.

What's the deadline to file a mechanics lien in Colorado?

Colorado's mechanics lien deadline changes depending on role and project type. Generally, though, the deadline to file a mechanics lien will be 4 months from the last day when labor or materials were furnished. Now, that doesn't necessarily mean any presence on the job site will automatically reset the lien clock. Returning to the job site, in and of itself, won't restart the deadline to file a mechanics lien - particularly when all that's being done is punch list work, remedial work, or minor repair work. However, if a would-be lien claimant does return to the job to perform work that helps to fulfill the contractual duties, beyond simple and minor fixes, there's a chance the lien deadline could be restarted. And, considering payment disputes don't usually make it to the courtroom, a strong argument may be all that's needed to make steps toward recovering payment. For further discussion: I Returned to a Job – Does that Change the Lien Deadlines?

Recovery options other than a mechanics lien

Of course, filing a mechanics lien isn't the only way to get paid. Let's break down some other recovery tools that might be valuable.

Invoice reminders

Invoice reminders act as a simple nudge to remind a customer that payment is overdue. They provide an opportunity to give a friendly reminder before a payment issue turns into a payment dispute. And, sometimes, a little push in the right direction is all that's needed.

Demand letters

Escalating things a bit can be helpful, too. Payment demand letters let recipients know that nonpayment won't be tolerated, and that if the dispute isn't resolved soon, then claims or legal actions may be necessary. As a result, demand letters can be a helpful payment recovery tool.

Notice of Intent to Lien

A Notice of Intent to Lien can make things real for a nonpaying customer. Mechanics liens are a powerful tool, and that means the mere threat of a lien claim is powerful, too. Plus, since a Notice of Intent to Lien is a part of Colorado's mechanics lien process, sending the document will generally be understood as a real threat and can push a customer to pay what's owed. Of course, it's not necessarily good form to threaten a lien if the right to lien doesn't exist. But, as mentioned above, if there's a fair argument that a lien claim might be timely, then sending a Notice of Intent to Lien may well be appropriate and even effective, by itself, to force payment. More on the document here: What Is a Notice of Intent to Lien and Should You Send One?

Legal recovery tools

Finally, while nobody likes dealing with lawsuits or lawyers, there are usually legal avenues available for recovery. For instance - payment is a crucial term of every contract, and failure to pay could very well give rise to a breach of contract claim. Though, to determine what legal options might be most appropriate, it'd probably be wise to reach out to a local construction attorney - they'll be able to review your documentation and circumstances then advise on how best to proceed in your shoes. What's more, if the payment claim is less than $7,500, Colorado small claims court may be an option for a more efficient recovery process.

Recovering interest on a contract

First, it's worth noting that Colorado actually allows mechanics lien claimants to claim interest in their lien claims (when allowed under contract) - which is relatively rare. What's more, note that a claimant can always demand that interest charges be paid when attempting to resolve the dispute without an actual claim filing - like through the invoice reminders, demand letters, or even via Notice of Intent to Lien, described above. And finally, if interest is owed under the contract, and if legal action must be taken to recover payment, then interest would very likely be recoverable there, as well.

Additional Colorado resources

I hope this has been helpful! For further discussion on Colorado mechanics liens and other payment claims, here are some great resources: - Colorado Mechanics Lien Guide and FAQs - What Is a Colorado Notice of Intent to Lien? - Can’t File a Lien? Here Are Some Other Options For Recovery - Don’t Want to File a Mechanics Lien? Here Are 5 Other Options

0 people found this helpful

Helpful