Contractors wishing to avail themselves of Colorado’s mechanics’ lien law (C.R.S. §§ 38-22-101, et. seq.) to collect amounts due and owing under a private construction contract must follow a strict set of rules to preserve their rights. One rule that can trip up an unwary contractor is the requirement that a lien statement must be recorded* within four months (two months where labor and work are performed by the day or piece or the project is a single or double-family dwelling) of the date on which the contractor’s last work was performed on the project.
Let’s assume a contractor completes its work on December 31, 2013. At first blush, it would appear the contractor has until April 30, 2014, or 120 days, to take the necessary action to perfect its lien rights and record the lien. However, if the contractor waits until April 21st or later to comply with Colorado’s mechanics’ lien law, it’s too late. Why? Because Colorado law requires a contractor to give at least ten days’ written notice to the owner and principal contractor of its intent to file the lien before it can be recorded. In our example, this means a contractor has until April 20, 2014, or 110 days, to begin the lien process.
If a contractor finds it has waited too long to give the required ten-day notice before recording its lien within the four-month deadline, the contractor may be able to buy time by recording a notice extending the time to file a lien statement. A notice extending time is valid only if the project is not yet completed, even though the contractor has completed its work. Such notice extends the time for recording a mechanic’s lien statement to four months after completion of the project or six months after the date of filing the notice, whichever occurs first.
The ten-day notice prerequisite is one of many specific requirements a contractor must follow to perfect its rights under Colorado’s mechanics’ lien law. Failure to comply with any one of these seemingly simple rules may render a mechanic’s lien unenforceable. While some contractors have successfully completed and recorded mechanics’ liens on their own, it is advisable to seek legal counsel throughout the process to ensure every legal requirement is met.
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*Lien statements must be recorded in the clerk and recorder’s office of the county where the project is located.