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.
“Levelset takes something that is pretty complex and makes it easy.”
Ready to send?
$19Free for a limited time
Start a job
Escalate payment problem
Notice of intent to lien
Colorado preliminary notice requirements for:
General contractors are not required to submit notice on private projects.
However, GCs are required to file a notice of intent 10 days before filing a lien.
General contractors are not required to submit notice on public projects.
Since GCs will not make a claim against their own 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, a notice of intent to lien is required in order to retain your lien rights.
Must be sent within 10 days before filing a lien
Notice cannot be sent late
NOI is sent to the owner, the prime contractor, or their respective agents
Note that the notice of intent must include a copy of the lien that will be filed.
Subs and suppliers are not required to send a preliminary notice to preserve the right to make a claim against a payment bond on a public project.
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.
Colorado does not require any notice prior to performing work on the project. However, any party other than the prime contractor is allowed to file a Notice to Owner that has the effect of requiring the owner to withhold funds to ensure payment of the notifying party.
A Colorado mechanics 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.
When do I Need to Send a Colorado Preliminary Notice?
If given, the Notice to Owner may be given to the owner at any time, either prior to performing work or after performing work and prior to giving Notice of Intent to Lien.
The Notice of Intent to Lien, along with a copy of the Statement of Lien to be filed, must be given to the owner at least 10 full days prior to the filing of the Statement of Lien. The timeframes here are very important, as discussed in Colorado’s Notice of Intent to Lien Requires Planning.
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 someone in charge.
A Notice Intent to Lien, may be given by personal service, or by registered or certified mail return receipt requested addressed to the last known address of such persons.
Is the Colorado Preliminary Notice Requirement met when sent or delivered?
The preliminary notice is considered delivered when either delivered in person, or when the notice is properly addressed, registered, and mailed. No requirement exists that a mailed notice must be received in order to be effective.
In Colorado, even where a mechanics lien statement must be sent by certified mail, return receipt requested, proving that the mail piece was sent according to the requirement is enough. In 6S Corp. v. Martinez the Court reasoned that otherwise, “adding the implied requirement of actualreceipt to this statutory scheme would likely have the paradoxical effect of creating uncertainty and controversy, if not rendering meaningless the alternative to personal service which the statute expressly authorizes.”
We are GCs in Colorado and want to send preliminary notices with our estimateIs it okay to send a voluntary preliminary
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.
what is proper service considered for “intent to file mechanics lien”? What is this about an affidavit being necessary to prove service?
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.
I have done estimates. I never have advertized “free quotes.” On my first estimate i send it says clear as ever. “May be subject to estimate fee if quote not accepted im 7 days.” So I send a bill and naturally people don’t want to pay. I’m filing intent forms tomorrow. Will it work or not?
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.
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!