What is a Mechanics’ Lien?
In Colorado, if a person or company provides services, labor, or materials to a property, but does not receive payment, a Mechanics’ Lien may be an appropriate route to attempt to recoup those losses. This legal tool empowers contractors, subcontractors, suppliers, and others in the construction industry to enforce their right to payment by placing a claim on the property itself.
This article is designed to give an overview of what a Mechanics’ Lien is and how it can serve as a valuable remedy for those seeking payment for their work. We do advise you to seek legal counsel if you are at the stage where you are considering using a Mechanics’ Lien.
WHO CAN RECORD A MECHANICS’ LIEN:
If you are a contractor, subcontractor, laborer, material supplier, or equipment supplier you may have the right to record a Mechanics’ Lien against a property for lack of payment. The law is quite broad as it relates to whom may have the right to file a Mechanics’ Lien.
WHEN TO RECORD A MECHANICS’ LIEN:
Mechanics’ Liens are very time-sensitive and require prompt action on the part of the party attempting to record a lien on a property. If you are attempting to record a Lien, it is best to begin the lien notice process within 2 months of the last day you provided work or material to the property. If you miss a deadline, you lose the right to record a Mechanics’ Lien against the property.
WHY RECORD A MECHANICS’ LIEN:
A Mechanics' Lien is a legal claim against another person's property, officially recorded with the county clerk and recorder where the property is located. However, Mechanics’ Liens do not remain attached to a property for an indefinite amount of time. The property owner either pays the lien amount, or the holder of the lien must begin a foreclosure action on the property within 6 months from the date that the last work or material was provided by them. If foreclosure is not initiated, the lien “dies,” and the property is no longer subject to it. A foreclosure proceeding can be time-consuming and costly but can result in your receipt of payment for work or materials provided. If you decide to let the lien die, you may still have the ability to recover your losses in Court via the initiation of litigation.
If you have questions about recording a Mechanic’s Lien, give our office a call at 970-241-5500.
Written by Rachel Awalt