Lien On Me: 3 Steps to Filing Your Mechanic's Lien

So, you’re a contractor or subcontractor who has completed a construction project for someone. Everything you’ve done on your end has been completed on schedule and with the utmost care and professionalism. There’s just one problem, though. The owner of the property has not paid you. Under the law, you have a right to recover payment from the owner. The solution? A mechanic’s lien. What exactly is a mechanic’s lien, though, and what is the proper process for filing one? This blog answers these questions. 

What is a mechanic’s lien?

Mechanic’s liens are devices that allow an unpaid contractor to record a lien (a security interest) on the property which the contractor worked on without being paid.   

A mechanic’s lien is a lien granted by Colorado statute to any person who supplies labor, materials, equipment, machinery, or services that enhance the value of the property. Under Colorado law, the right to a mechanic’s lien arises at the beginning of the work. The moment that a contract is executed with any of these professionals is when the work begins. Thus, the beginning of work can reach back as far as when the property owner hires professionals to assist in the design of the project.

There are two different kinds of liens. A Section 101 lien is one that a construction professional files if the work was commissioned directly by the property owner. In contrast, a Section 105 lien is the lien a construction professional files if the work was commissioned by a renting tenant.

 What does a Mechanic’s Lien entitle you to collect?

As a contractor, you can claim a mechanic’s lien for the entire contract price of the project. You are also entitled to receive interest at the rate specified in the contract, or in the absence of an agreed rate of interest, at the rate of 12% per annum. However, you cannot file a statement of lien for more than is due.

How do you file a mechanic’s lien?

Lien claimants in Colorado must follow three steps to record a mechanic’s lien. They must fill out the appropriate mechanic’s lien form, send a Notice of Intent to Lien to the property owner, and file the Lien Claim with the county clerk.

Step 1: Filling out the Form

A mechanic’s lien form is a standard form that must contain: (1) the name of the property owner; (2) the lien claimant (i.e. the person claiming the lien); (3) a description of the property against which the lien is being filed; and (4) a statement of the amount due or owed. 

Step: 2 Send a Notice of Intent to Lien to the Property Owner

The Notice of Intent to File a Lien Statement must be served on the owner of the property at least ten (10) days prior to the actual recording of the Lien Claim. This notice must be served on the owner by personal service, or by registered or certified mail, return receipt requested, addressed to the last known address of the owner.

Step 3: Filing the Lien Claim

Next, you must have your signature notarized to the contents of the Lien Claim and record it with the Clerk and Recorder’s Office of the appropriate county. 

As the contractor, you must remember to include an “affidavit of service” as proof that you complied with the ten-day prior service period in Step 2. Failure to do so will invalidate your claim! 

If the work supplied was for work by the day or piece labor, then the contractor must file its lien within two (2) months after the day on which the last labor was performed. If the work supplied was for any other type of work, labor, or materials, then the contractor must file its lien within four (4) months after the day on which the last labor, work, or materials are supplied.

You must file a foreclosure action for your lien within six (6) months of the last work completed or you lose your right to do so. Without an affidavit, liens will automatically terminate within one (1) year and thirty (30) days.

Who cannot use a Mechanic’s Lien? 

Contractors can only claim a mechanic’s lien if they perform the specific types of work specified by Colorado statute. Types of work that do not qualify include periodic maintenance contracts for garden/lawn services, house cleaning services, and janitorial services.

Mechanics liens must be strictly complied with or else you may lose your security interest in the property and your work. GLO has specializes in Colorado construction law and can guide you through the mechanic’s lien process to make sure you get paid for your work. If you are dealing with a construction issue, fill out an interest form today to see if GLO can help you.

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GLO has prepared this blog to provide general information on legal issues that may be of interest. This blog does not provide legal advice for any specific situation and this does not create an attorney-client relationship between any reader and GLO or its attorneys. GLO engages clients only through specific signed fee agreements. GLO does not guarantee any results.