Mechanic’s Liens in Colorado: Protecting Payment Rights in Construction
At Higgins, Hopkins, McLain & Roswell, LLC (“HHMR”), we understand the complexities of Colorado’s mechanic’s lien laws and their critical role in ensuring fair compensation for those in the construction industry. Whether you are a contractor, subcontractor, supplier, or property owner navigating lien-related disputes, our firm provides strategic guidance and proactive legal solutions to protect your interests.
Colorado Mechanic’s Lien Primer
A mechanic’s lien is a statutory security interest that allows contractors, subcontractors, and material suppliers to secure payment for work performed on private construction projects. The law enables those who contribute labor, materials, or services to file a lien against the property if they are not paid for their work. However, strict compliance with procedural requirements is necessary to preserve and enforce lien rights.
Key steps in Colorado’s mechanic’s lien process include:
- Pre-Lien Notice Requirements
- Subcontractors & Suppliers: Must serve a Notice of Intent to Lien at least 10 days before filing a mechanic’s lien.
- General Contractors: No pre-lien notice is required unless contracted directly with a tenant rather than the property owner.
- Filing the Mechanic’s Lien
- The lien must be recorded within four months after the last date of work or materials supplied (reduced to two months for laborers).
- The lien must include a statement of the claim, amount due, property description, and claimant details.
- Foreclosing on a Lien
- If payment is not received, lienholders must initiate foreclosure proceedings within six months of the last date of work or materials supplied.
- A properly perfected lien takes priority over subsequent property interests and can force the sale of the property to satisfy unpaid claims.
Colorado Mechanic’s Lien Trust Fund Statute
In addition to traditional lien rights, Colorado’s Mechanic’s Lien Trust Fund Statute (C.R.S. § 38-22-127) provides another layer of protection for contractors and subcontractors. This statute mandates that funds received for a construction project are held in trust for those who provided labor or materials.
- Contractors and subcontractors are fiduciaries of funds paid for a construction project and cannot divert those funds for other purposes before paying downstream parties.
- Misuse of trust funds—such as using construction payments for unrelated business expenses—can result in personal liability and potential civil and criminal penalties for company owners and officers.
Understanding and complying with these lien and trust fund requirements is crucial to ensuring payment security while avoiding legal exposure.
How HHMR Can Help
Navigating Colorado’s mechanic’s lien laws requires precision and experience. At HHMR, our attorneys assist with:
- Filing & Enforcing Mechanic’s Liens to secure rightful payment
- Defending Property Owners & General Contractors against improper lien claims
- Mechanic’s Lien Foreclosures & Priority Disputes
- Trust Fund Statute Compliance & Defense against fiduciary claims
Our firm is dedicated to protecting the financial interests of Colorado’s construction industry. If you need assistance with mechanic’s lien matters, contact us today for a consultation.
