Colorado Notice to Owner Form

Yes, it is okay to send a Colorado preliminary notice (especially a voluntary one) before work begins on a job. There are some states where sending a preliminary notice too early can actually invalidate it, but that is not the case in Colorado. If you send a preliminary notice before work begins on a Colorado job -- such as with your estimate -- this is perfectly okay.

Colorado's Notice of Intent to Lien is a tricky document - I think an explanation the requirements for a valid Notice of Intent to Lien will provide some clarity. In Colorado, under § 38-22-109(3) of the lien statute, a Notice of Intent to Lien must be given to the owner at least 10 days prior to filing a Colorado mechanics lien. Plus, the deadline to file a Colorado lien is unaffected by the Notice of Intent to Lien. This means the process for a lien filing really starts 10 days before the deadline provided by statute. If a Notice of Intent to Lien is properly served (more on that in a second), a lien claimant will have the right to file a mechanics lien once 10 days have passed - provided, of course, that any other applicable notice and deadline requirements were also followed. The Notice of Intent to Lien must either be served by (1) personal service, or (2) certified or registered mail, return receipt requested. Regarding the Affidavit of Delivery - this affidavit is a document submitted by the party sending the Notice of Intent to Lien. By submitting an Affidavit of Delivery, the noticing party swears that the Notice of Intent to Lien was properly served. Along with the Notice of Intent, a notifying party must also provide a copy of the Statement of Lien that will after 10 days have passed. If the notice requirements outlined here were not followed, the Notice of Intent to Lien may very well be insufficient by the Colorado mechanics lien statute. If that is the case, an action to challenge a later-filed mechanics lien would likely be effective to invalidate a mechanics lien filing. Note, however, that mechanics liens that have imperfections are actually filed all the time - a recorder's office often lacks the bandwidth or even the authority to scrutinize every lien claim. Thus, it may take legal action to remove such a lien, even if the lien is invalid. However, sending the potential claimant a notice or even a threat of contesting the lien for failure to adhere to statutory requirements could be effective in preventing a lien claim. Further, if an owner notifies a claimant that a false or fraudulent claim could result in serious legal penalty, a claimant may think twice about filing a questionable claim for payment.

This question gives rise to a couple of things to consider: 1) whether the estimate and the estimate fee clause is sufficient to obligate payment, and 2) whether filing intent forms will work (or whether it is appropriate).

Regarding point 1, there is not enough information to determine if the estimate contract and specific clause is sufficient to obligate payment. However, from a general high-level view, the clause would likely work better if you charged a specifically defined estimate fee (due in 10 or so days from the date of estimate) that was waived if the quote/estimate/bid was accepted within 7 days. As it stands, there may be too much confusion surrounding what the other party actually agreed to for it to work as you want it to. You may want to have a local attorney draft up a quick new estimate contract to accomplish what you want it to do.

Regarding point 2, if you are referring to sending Notice of Intent to Lien to the property owner pursuant to Colorado lien requirements whether it will work (result in payment) is a different inquiry than whether it will work (protect lien rights). Sending a notice of intent in this type of situation may provide some incentive for the property owner to pay to amount claimed to be due (to avoid the necessity of dealing with a lien or escalating situation whether or not a subsequent lien would be valid), but would likely not result in protection of lien rights.

In Colorado, like most states, parties who are provided lien protection are parties who were "performing labor" or "furnishing labor, laborers, or materials to be used in construction" of a building. There generally needs to be an actual improvement made and a project commenced in order to give rise to mechanics lien rights (some exceptions exist for architects, and parties who created specially fabricated material, among others). Giving an estimate for work, but not actually performing work, generally would not give rise to mechanics lien rights.