A significant part of my civil ligation practice is acting as construction collections attorney. Many disputes arise involving payment in construction cases and my commercial litigation practice has seen a wide variety of construction collections actions including mechanics liens, breach of contract cases and claims and litigation involving payment bonds (including federal court litigation under the Miller Act).
Colorado construction contractors know their mechanic’s lien rights, but employing the process in a timely matter more than half the battle. Besides liens, the unpaid construction professionals in Colorado may maintain breach of contract claims, claims on payment bonds, or assert claims under other legal or equitable theories your construction attorney can come up with. Put differently, the expiration of for failure to exercise mechanic’s lien rights is not the end of the road.
The following focuses only on the mechanic’s lien and its critical deadlines a contractor faces in putting a lien in place.
This is intended to be a general overview only and does not cover specific requirements or the nature and content required for each notice or filing type. Deadlines and time-frames presented herein may have changed by the time you read this.
□Notice of Intent to File a Mechanic’s Lien Statement (to property owner and upper tier contractor):
- Providing notice to the contractor/owner of the job site is needed before a mechanic’s lien can be filed — must be provided eleven (11) days before the mechanic’s lien can be recorded. Section §38-22-109(3), C.R.S. (2015) (at least 10 days).
□ Record Mechanic’s Lien Statement with the county Clerk and Recorder’s Office:
- Ten (10) days after mailing the notice to the contractor/owner, a lien statement can be filed. Section §38-22-109(3), C.R.S. (2015).
- There are deadlines within which the lien statement needs to be filed, so calendaring and serving the prior notice (above) before these deadlines is critical.
- If you are a laborer—who only supplies labor and not materials—the lien statement needs to be filed within two months after completion* of the improvement. Section §38-22-109(4), C.R.S. (2015).
- All others, including general contractors, subcontractors, and suppliers, need to file their mechanic’s lien statement within four months after the last day on which the labor is performed* or the material furnished* by the person filing the lien. Section §38-22-109(5), C.R.S. (2015).
- If the lien statement is being recorded against a one or two family dwelling, then the lien statement should be filed no later than two months after the improvement is completed. Section §38-22-125, C.R.S. (2015).
□Notice to Extend Time to Record Mechanic’s Lien: If you need more time to file the mechanic’s lien statement, one may file a notice of extension with the office of the county clerk and recorder where the job site was located.
- This notice of extension must be filed within the time limit allowed for filing the mechanic’s lien statement itself. Section §38-22-109(10) , C.R.S. (2015).
- For laborers, no later than two months after improvement is completed. Section §38-22-109(4), C.R.S. (2015).
- For all others, no later than four months after the last day on which the labor is performed or materials furnished by that claimant. Section §38-22-109(5), C.R.S. (2015).
□ Deadline to File a Court Action (Foreclosure) on the Recorded Mechanic’s Lien:
- Once you have filed the mechanic’s lien, you then have six months within which to file a court action to foreclose on the property.
- This six-month time period is measured from the date the lien was filed or the construction project was completed, whichever date is later. Section §38-22-110, C.R.S. (2015).