Sending a Colorado preliminary notice is an effective way to speed up payment on a construction project. A preliminary notice is an informational document typically sent to the property owner near the beginning of a construction project. Here's what you need to know about the rules and requirements for sending preliminary notice in Colorado.
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Notice of intent to lien
Colorado preliminary notice requirements for:
General contractors are not required to submit notice on private projects.
General contractors are not required to submit notice on public projects.
Since GCs will not make a claim against their own payment bond for non-payment, they do not have bond claim rights, and have no preliminary notice requirement.
Subcontractors and suppliers are not required to send a preliminary notice on private projects. However, they can send an optional Notice to Owner which requires them to withhold that amount from payments to the prime contractor.
If you're sending Colorado pre-lien notices, it's important to get all the details right. If you're receiving prelims, it's important to know what you're looking at and know what to do in followup. Since prelims are subject to a lot of complex rules and requirements, this can all be difficult. And, since there may be different rules, requirements, and even notices depending on job or role, it can be even more complicated. These are some frequently asked questions about the Colorado notice process.
A Colorado Notice to Owner isn’t required to secure mechanics lien rights. However, sending this notice has the effect of requiring the owner to withhold the amount claimed from the prime contractor. This notice is available for any potential lien claimant who did not contract directly with the property owner.
Note: the only actually required notice, for the purposes of Colorado mechanics’ liens, is the Notice of Intent to Lien.
Who do I need to send the Colorado preliminary notice to?
The Notice to Owner must be given to the property owner or reputed owner, or the superintendent of construction, agent, architect, to the financial institution or other person disbursing construction funds.
Note: any defects in the notice will not invalidate the notice as long as it is “sufficient to inform the owner or reputed owner of the substantial matters provided in this section, or to put him upon inquiry as to such matters.”
How Should the Colorado preliminary notice be sent?
A Notice to Owner may be given by personal delivery, by leaving the notice at the owner’s (or superintendent of construction’s, agent’s, architect’s, or financing institution’s) residence or place of business with some person in charge.
What if I Send the Colorado Preliminary Notice Late?
Notice to Owner is not required in Colorado, so there is no penalty to sending the notice late, if it is given at all. However, practically speaking, the earlier the better as this notice only applies to “undisbursed funds.”
Colorado does not require that a preliminary notice be provided prior to, or shortly after beginning to perform work or furnish materials on a project. However, Colorado does contemplate the sending of a best-practice preliminary notice that provides real effects on payment rights, and mandates that a notice of intent to lien be provided to the property owner in the event payment disputes escalate to the point that a lien is required.
In Colorado, any party other than the prime contractor is allowed to file a Notice to Owner. This notice, while not required, has powerful effects. Once the notice has been provided, “it is the duty of the [property owner] to withhold from such principal contractor . . . sufficient money due or that may become due to said principal contractor, or other persons, to satisfy such claim and any lien that may be filed therefor.” This means that if a sub-tier participant gives a preliminary notice prior to furnishing labor or materials to a Colorado project, the owner is obligated to withhold the amount referenced in the sub-tier participants notice to satisfy any claim that party may have for payment.
Additionally, any project participant may give a Disburser Notice pursuant to CO Rev Stat § 38-22-126to, in effect, skip up the payment chain. If the disburser notice is provided appropriately, the disburser of funds is required to pay the claimant directly, or, if it doesn’t is directly liable for any damages suffered by the noticing party. For example, if a GC does not pay a subcontractor that has provided a proper notice to the disburser (generally the construction lender or owner), the disburser is required to pay the subcontractor directly from the construction loan or other funds, or will be directly liable if the sub remains unpaid.
Finally, in the event that a payment dispute exists to the extent that it appears a mechanics lien will need to be filed. Any such potential lien claimant is required to give the property owner, reputed owner, or owner’s agent, a Notice of Intent to Lien as well as a copy of the Statement of Lien that will be filed at least 10 full days prior to the filing of the mechanics lien itself.
The generic notice form can be used in Colorado, or any other state where notice is not required. It provides information about your company to the property owner, general contractor, and other parties in charge of payment on a construction project.
Fill out the form
Be careful! Accuracy is important.
The next step is to fill out your form completely and accurately. GCs and owners often rely on this document to communicate with you, so mistakes on this form could cause payment delays.
Deliver your form
Colorado doesn’t have any specific notice delivery requirements. You can deliver the notice however you see fit.
How to send a Preliminary Notice with Levelset
Select Preliminary Notice document.
Provide basic job information.
Levelset sends the document for you. Postage included!
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Colorado Preliminary Notice Statutes
Colorado’s mechanic’s lien statute can be found in Colorado Revised Statutes, §38-22-101 through §38-22-133. And, the rules and requirements specifically related to the Notice to Owner requirements can be found under §38-22-104(4)-(6). Updated as of 2020.
Colorado Notice to Owner Statute
§ 38-22-102(4)-(6): Payments - effect
(4) Any of the persons mentioned in section 38-22-101, except a principal contractor, at any time may give to the owner, or reputed owner, or to the superintendent of construction, agent, architect, or to the financing institution or other person disbursing construction funds, a written notice that they have performed labor or furnished laborers or materials to or for a principal contractor, or any person acting by authority of the owner or reputed owner, or that they have agreed to and will do so, stating in general terms the kind of labor, laborers, or materials and the name of the person to or for whom the same was or is to be done, or performed, or both, and the estimated or agreed amount in value, as near as may be, of that already done or furnished, or both, and also of the whole agreed to be done or furnished, or both.
(5) Such notice may be given by delivering the same to the owner or reputed owner personally, or by leaving it at his residence or place of business with some person in charge; or by delivering it either to his superintendent of construction, agent, architect, or to the financing institution or other person disbursing construction funds, or by leaving it either at their residence or place of business with some person in charge. No such notice shall be invalid or insufficient by reason of any defect of form, provided it is sufficient to inform the owner or reputed owner of the substantial matters provided for in this section, or to put him upon inquiry as to such matters.
(6) Upon such notice being given, it is the duty of the person who contracted with the principal contractor to withhold from such principal contractor, or from any other person acting under such owner or reputed owner, and to whom, by said notice, the said labor, laborers, or materials, have been furnished or agreed to be furnished, sufficient money due or that may become due to said principal contractor, or other persons, to satisfy such claim and any lien that may be filed therefor for record under this article, including reasonable costs provided for in this article.