DISCLAIMER:
Tradition Software, Inc. makes no warrant, express or implied
for the use of this website. In no event shall Tradition Software,
Inc. be liable to anyone for any problem, claim or loss arising
out of the use of MechLien.com ® or TraditionSoftware.com
® . Tradition Software, Inc. is not engaged in practicing
law nor does Tradition Software, Inc. provide legal advice.
38-22-101
Liens in Favor of Whom - When Filed
38-22-102
Payments - Effect
38-22-103 Attaching of Lien - Enforcement
38-22-104 Lien on Mining Property
38-22-105 Property Subject to Lien - Notice
38-22-105.5 Notice of Lien Law
38-22-106 Priority of Lien - Attachments
38-22-107 Lien Attaches to Water Rights and Franchises
38-22-108 Rank of Liens
38-22-109 Lien Statement
38-22-110 Action Commenced Within Six Months
38-22-111 Joinder of Parties - Consolidation of Actions
38-22-112 Allegations of Complaint
38-22-113 Hearing - Judgment - Summons - Defense
38-22-114 Disposition of Proceeds - Execution
38-22-115 Parties to Action
38-22-116 Costs
38-22-117 Assignment of Lien - Failure to Support Lien
38-22-118 Satisfaction of Lien - Failure to Release
38-22-119 Agreement to Waive - Effect
38-22-120 Rules of Civil Procedure Apply
38-22-121 Liens of Surveyors and Engineers
38-22-122 Lien Under Two Contracts - Effect
38-22-123 Payment to Avoid Invalid
38-22-124 Other Remedies Not Barred
38-22-125 Bona Fide Purchaser
38-22-126 Disburser - Notice - Duty of Owner and Disburser
38-22-127 Moneys for Lien Claims Made Trust Funds - Disbursements
- Penalty
38-22-128 Excessive Amounts Claimed
38-22-129 Principal Contractor May Provide Bond Prior to Commencement
of Work
38-22-130 Payment of Claims by Surety
38-22-131 Substitution of Bond Allowed
38-22-132 Lien to be Discharged
38-22-133 Action to be Brought on Bond or Undertaking
38-22-101
Liens in Favor of Whom - When Filed
(1)
Every person who supplies machinery, tools, or equipment in
the prosecution of the work, and mechanics, materialmen, contractors,
subcontractors, builders, and all persons of every class performing
labor upon or furnishing directly to the owner or persons
furnishing labor materials to be used in construction, alteration,
improvement, addition to, or repair, either in whole or in
part, of any building, mill, bridge, ditch, flume, aqueduct,
reservoir, tunnel, fence, railroad, wagon road, tramway, or
any other structure or improvement upon land, including adjacent
curb, gutter, and sidewalk, and also architects, engineers,
draftsmen, and artisans who have furnished designs, plans,
plats, maps, specifications, drawings, estimates of cost,
surveys, or superintendence, or who have rendered other professional
or skilled service, or bestowed labor in whole or in part,
describing or illustrating, or superintending such structure,
or work done or to be done, or any part connected therewith,
shall have a lien upon the property upon which they have supplied
machinery, tools, or equipment or rendered service or bestowed
labor or for which they have furnished materials or mining
or milling machinery or other fixtures, for the value of such
machinery, tools, or equipment supplied, or services rendered
or labor done or material furnished, whether at the instance
of the owner, or of any other person acting by his authority
or under him, as agent, contractor, or otherwise for the machinery,
tools, or equipment supplied, or work or labor done or services
rendered or materials furnished by each, respectively, whether
supplied or done or furnished or rendered at the instance
of the owner of the building or other improvement, or his
agent; and every contractor, architect, engineer, subcontractor,
builder, agent, or other person having charge of the construction,
alteration, addition to, or repair, either in whole or in
part, of said building or other improvement shall be held
to be the agent of the owner for the purposes of this article.
(2) In case of a contract for the work, between the reputed
owner and a contractor, the lien shall extend to the entire
contract price, and such contract shall operate as a lien
in favor of all persons performing labor or services or furnishing
materials under contract, express or implied, with said contractor,
to the extent of the whole contract price; and after all such
liens are satisfied, then as a lien for any balance of such
contract price in favor of the contractor.
(3) All such contracts shall be in writing when the amount
to be paid thereunder exceeds five hundred dollars, and shall
be subscribed by the parties thereto. The contract, or a memorandum
thereof, setting forth the names of all the parties to the
contract, a description of the property to be affected thereby,
together with a statement of the general character of the
work to be done, the estimated total amount to be paid thereunder,
together with the times or stages of the work for making payments,
shall be filed by the owner or reputed owner, in the office
of the county clerk and recorder of the county where the property,
or the principal portion thereof, is situated before the work
is commenced under and in accordance with the terms of the
contract. In case such contract, or a memorandum thereof,
is not so filed, the labor done and materials furnished by
all persons shall be deemed to have been done and furnished
at the personal instance of the owner, and such persons shall
have a lien for the value thereof.
(4) For the purposes of this article, the value of labor done
shall include, but not be limited to, the payments required
under any labor contract to any trust established for the
provision of any pension, profit-sharing, vacation, health
and welfare, prepaid legal services, or apprentice training
benefits for the use of the employees of any contractors,
and the trustee of any such trust shall have a lien therefore.
(5) All claimants who establish the right to a lien or claim
under any of the provisions of this article shall be entitled
to receive interest on any such lien or claim at the rate
provided for under the terms of any contract or agreement
under which the labor or material was supplied or, in the
absence of an agreed rate, at the rate of twelve percent per
annum.
38-22-102
Payments - Effect
(1)
No part of the contract price, by the terms of any such contract,
shall be made payable, nor shall the same, or any part thereof,
be paid in advance of the commencement of the work, but the
contract price, by the terms of the contract, shall be made
payable in installments, or upon estimates, at specified times
after the commencement of the work, or on the completion of
the whole work; but at least the following percentages of
the total contract price shall be made payable at least thirty-five
days after the final completion of the contract:
(a) Fifteen percent of the first two hundred fifty thousand
dollars of the contract price;
(b) Ten percent of the contract price in excess of two hundred
fifty thousand dollars up to and including five hundred thousand
dollars;
(c) Five percent of the contract price in excess of five hundred
thousand dollars up to and including seven hundred fifty thousand
dollars;
(d) Two percent of the contract price in excess of seven hundred
fifty thousand dollars.
(2) No payment made prior to the time when the same is due,
under the terms and conditions of the contract, shall be valid
for the purpose of defeating, diminishing, or discharging
any lien in favor of any person, except the contractor or
other person to or for whom the payment is made, but as to
such liens, such payment shall be deemed as if not made and
shall be applicable to such liens, notwithstanding that the
contractor or other person to or for whom it was paid may
thereafter abandon his contract, or be or become indebted
to the reputed owner in any amount for damages or otherwise
or for nonperformance of his contract or otherwise.
(3) As to all liens, except those of principal contractors,
the whole contract price shall be payable in money, and shall
not be diminished by any prior or subsequent indebtedness,
offset, or counterclaim in favor of the reputed owner and
against the principal contractor, and no alteration of such
contract shall affect any lien acquired under the provisions
of this article. In case such contracts and alterations thereof
do not conform substantially to the provisions of this section,
the labor done and materials furnished by all persons other
than the principal contractor shall be deemed to have been
done and furnished at the personal instance and request of
the person who contracted with the principal contractor, they
shall have a lien for the value thereof.
(3.5) Any provisions of this section to the contrary notwithstanding,
it shall be an affirmative defense in any action to enforce
a lien pursuant to this article that the owner or some person
acting on his behalf has paid an amount sufficient to satisfy
the contractual and legal obligations of the owner, including
the initial purchase price or contract amount plus any additions
or change orders, to the principal contractor or any subcontractor
for the purpose of payment to the subcontractors or suppliers
of materials or services to the job, when:
(a) The property is an existing single-family dwelling unit;
(b) The property is a residence constructed by the owner or
under a contract entered into by the owner prior to its occupancy
as his primary residence; or
(c) The property is a single-family, owner-occupied dwelling
unit, including a residence constructed and sold for occupancy
as a primary residence. This paragraph (c) shall not apply
to a developer or builder of multiple residences except for
the residence that is occupied as the primary residence of
the developer or builder.
(4) Any of the persons mentioned in section 38-22-101, except
a principal contractor, at any time may give to the owner,
or reputed owner, or to his superintendent of construction,
agent, architect, or to the financing institution or other
person disbursing construction funds, a written notice that
they have performed labor or furnished materials or both to
or for a principal contractor, or any person acting by authority
of the owner or reputed owner, or that they have agreed to
and will do so, stating in general terms the kind of labor
or materials and the name of the person to or for whom the
same was or is to be done or performed, or both, and the estimated
or agreed amount in value, as near as may be, of that already
done or furnished, or both, and also of the whole agreed to
be done or furnished, or both.
(5) Such notice may be given by delivering the same to the
owner or reputed owner personally, or by leaving it at his
residence or place of business with some person in charge;
or by delivering it either to his superintendent of construction,
agent, architect, or to the financing institution or other
person disbursing construction funds, or by leaving it either
at their residence or place of business with some person in
charge. No such notice shall be invalid or insufficient by
reason of any defect of form, provided it is sufficient to
inform the owner or reputed owner of the substantial matters
provided for in this section, or to put him upon inquiry as
to such matters.
(6) Upon such notice being given, it is the duty of the person
who contracted with the principal contractor to withhold from
such principal contractor, or from any other person acting
under such owner or reputed owner, and to whom, by said notice,
the said labor or materials, or both, have been furnished
or agreed to be furnished, sufficient money due or that may
become due to said principal contractor, or other persons,
to satisfy such claim and any lien that may be filed therefore
for record under this article, including reasonable costs
provided for in this article.
(7) The payment of any such lien, which has been acknowledged
by such principal contractor, or other person acting under
such owner or reputed owner in writing to be correct, or which
has been established by judicial determination, shall be taken
and allowed as an offset against any moneys which may be due
from the owner, or reputed owner to such principal contractor,
or the person for whom such work and labor was performed.
38-22-103
Attaching of Lien - Enforcement
(1)
The liens granted by this article shall extend to and cover
so much of the lands whereon such building, structure, or
improvement is made as may be necessary for the convenient
use and occupation of such building, structure, or improvement,
and the same shall be subject to such liens. In case any such
building occupies two or more lots or other subdivisions of
land, such several lots or other subdivisions shall be deemed
one lot for the purposes of this article, and the same rule
shall hold in cases of any other such improvements that are
practically indivisible, and shall attach to all machinery
and other fixtures used in connection with any such lands,
buildings, mills, structures, or improvements.
(2) When the lien is for work done or material furnished for
any entire structure, erection, or improvement, such lien
shall attach to such building, erection, or improvement for
or upon which the work was done, or materials furnished in
preference to any prior lien or encumbrance, or mortgage upon
the land upon which the same is erected or put, and any person
enforcing such lien may have such building, erection, or improvement
sold under execution and the purchaser at any such sale may
remove the same within thirty days after such sale.
(3) Any lien provided for by this article shall extend to
and embrace any additional or greater interest in any of such
property acquired by such owner at any time subsequent to
the making of the contract or the commencement of the work
upon such structure and before the establishment of such lien
by process of law, and shall extend to any assignable, transferable,
or conveyable interest of such owner or reputed owner in the
land upon which such building, structure, or other improvement
is erected or placed.
(4) Whenever any person furnishes any materials or performs
any labor, or both, for the erection, construction, addition
to, alteration, or repair of two or more buildings, structures,
or other improvements, when they are built and constructed
by the same person and under the same contract, it is lawful
for the person so furnishing such materials or performing
such labor to divide and apportion the same among the buildings,
structures, or other improvements in proportion to the value
of the materials furnished for and the labor performed upon
or for each of said buildings, structures, or other improvements
and to file with his lien claim therefore a statement of the
amount so apportioned to each building, structure, or other
improvement. This lien claim when so filed may be enforced
under the provisions of this article in the same manner as
if said materials had been furnished and labor performed for
each of said buildings, structures, or other improvements
separately; but if the cost or value of such labor and materials,
or either, cannot be readily and definitely divided and apportioned
among the several buildings, structures, or other improvements,
then one lien claim may be made, established, and enforced
against all such buildings, structures, or other improvements,
together with the ground upon which the same may be situated,
and in such case for the purposes of this article, all such
buildings, structures, and improvements shall be deemed one
building, structure, or improvement, and the land on which
the same are situated as one tract of land.
38-22-104
Lien on Mining Property
The
provisions of this article shall apply to all persons who
do work or furnish materials, or mining, milling, or other
machinery or other fixtures, as provided in section 38-22-101,
for the working, preservation, prospecting, or development
of any mine, lode, or mining claim or deposit yielding metals
or minerals of any kind, or for the working, preservation,
or development of any such mine, lode, or deposit, in search
of any such metals or minerals; and to all persons who do
work upon or furnish materials, mining, milling, and other
machinery or other fixtures, as provided in section 38-22-101,
upon, in, or for any shaft, tunnel, mill, or tunnel site,
incline, adit, drift, or any draining or other improvement
of or upon any such mine, lode, deposit, or tunnel site; and
to every miner or other person who does work upon or furnishes
any coal, power, provisions, timber, powder, rope, nails,
candles, fuse, caps, rails, spikes, or iron, or other materials
whatever, as provided in section 38-22-101, upon any mine,
lode, deposit, mill, or tunnel site. But when two or more
lodes, mines, or deposits owned or claimed by the same person
are worked through a common shaft, tunnel, incline, adit,
drift, or other excavation, then all the mines, mining claims,
lodes, deposits, and tunnel and mill sites so owned and worked
or developed, for the purpose of this article shall be deemed
one mine. This section is not applicable to the owner of any
mine, lode, mining claim, deposit, mill, or tunnel where the
work or labor has been performed for or the materials furnished
to a lessee.
38-22-105
Property Subject to Lien - Notice
(1)
Any building, mill, manufactory, bridge, ditch, flume, aqueduct,
reservoir, tunnel, fence, railroad, wagon road, tramway, and
every structure or other improvement mentioned in this article,
constructed, altered, added to, removed to, or repaired, either
in whole or in part, upon or in any land with the knowledge
of the owner or reputed owner of such land, or of any person
having or claiming an interest therein, otherwise than under
a bona fide prior recorded mortgage, deed of trust, or other
encumbrance, or prior lien shall be held to have been erected,
constructed, altered, removed, repaired, or done at the instance
and request of such owner or person, including landlord or
vendor, who by lease or contract has authorized such improvements,
but so far only as to subject his interest to a lien therefore
as provided in this section.
(2) Such interest so owned or claimed shall be subject to
any lien given by the provisions of this article, unless such
owner or person within five days after he has obtained notice
of the erection, construction, alteration, removal, addition,
repair, or other improvement, gives notice that his interests
shall not be subject to any lien for the same by serving a
written or printed notice to that effect, personally, upon
all persons performing labor or furnishing skill, materials,
machinery, or other fixtures therefore, or within five days
after he has obtained the notice aforesaid, or notice of the
intended erection, construction, alteration, removal, addition,
repair, or other improvement gives such notice by posting
and keeping posted a written or printed notice to the effect
aforesaid, in some conspicuous place upon said land or upon
the building or other improvements situate thereon.
(3) This section shall not apply to co-owners of unincorporated
canals, ditches, flumes, aqueducts, and reservoirs nor to
the enforcement of article 23 of this title. The provisions
of this section shall not be construed to apply to any owner
or person claiming any interest in such property, the interest
of whom is subject to a lien pursuant to the provisions of
section 38-22-101.
38-22-105.5
Notice of Lien Law
(1)
Upon issuing a building permit for the improvement, restoration,
remodeling, or repair of or the construction of improvements
or additions to residential property, the agency or other
authority issuing the permit shall send a written notice,
as set forth in subsection (2) of this section, by first-class
mail addressed to the property for which the permit was issued.
(2)
The notice shall be in at least ten-point bold-faced type,
if printed, or in capital letters, if typewritten, shall identify
the contractor by name and address, and shall state substantially
as follows:
“IMPORTANT
NOTICE TO OWNERS: UNDER COLORADO LAW, SUPPLIERS, SUBCONTRACTORS,
OR OTHER PERSONS PROVIDING LABOR OR MATERIALS FOR WORK ON
YOUR RESIDENTIAL PROPERTY MAY HAVE A RIGHT TO COLLECT THEIR
MONEY FROM YOU BY FILING A LIEN AGAINST YOUR PROPERTY. A LIEN
CAN BE FILED AGAINST YOUR RESIDENCE WHEN A SUPPLIER, SUBCONTRACTOR,
OR OTHER PERSON IS NOT PAID BY YOUR CONTRACTOR FOR HIS LABOR
OR MATERIALS. HOWEVER, IN ACCORDANCE WITH THE COLORADO GENERAL
MECHANICS’ LIEN LAW, SECTIONS 38-22-102 (3.5) AND 38-22-113
(4), COLORADO REVISED STATUTES, YOU HAVE AN AFFIRMATIVE DEFENSE
IN ANY ACTION TO ENFORCE A LIEN IF YOU OR SOME PERSON ACTING
ON YOUR BEHALF HAS PAID YOUR CONTRACTOR AND SATISFIED YOUR
LEGAL OBLIGATIONS. YOU MAY ALSO WANT TO DISCUSS WITH YOUR
CONTRACTOR, YOUR ATTORNEY, OR YOUR LENDER POSSIBLE PRECAUTIONS,
INCLUDING THE USE OF LIEN WAIVERS OR REQUIRING THAT EVERY
CHECK ISSUED BY YOU OR ON YOUR BEHALF IS MADE PAYABLE TO THE
CONTRACTOR, THE SUBCONTRACTOR, AND THE SUPPLIER FOR AVOIDING
DOUBLE PAYMENTS IF YOUR PROPERTY DOES NOT SATISFY THE REQUIREMENTS
OF SECTIONS 38-22-102 (3.5) AND 38-22-113 (4), COLORADO REVISED
STATUTES. YOU SHOULD TAKE WHATEVER STEPS NECESSARY TO PROTECT
YOUR PROPERTY.”
(3)
The notice prescribed by this section shall not be required
when a building permit is issued for new residential construction
or for residential property containing more than four living
units.
(4)
As used in this section:
(a)
“New residential construction” means the construction
or addition of living units on real property that was previously
unimproved or was used for nonresidential purposes.
(b)
“Residential property” means any real property,
including improvements, containing living units used for human
habitation.
(5)
To offset the cost of issuing the notice required by this
section, the appropriate authority may raise the fee for a
building permit by one dollar.
(6)
The failure of the agency or other authority which issues
building permits to provide the notice required by this section
shall not be an affirmative defense to any lien claimed pursuant
to the provisions of this article; nor shall the agency or
any employee of the agency incur liability as a result of
such failure.
(7) The agency or other authority which issues building permits
may deliver the notice required by this section personally
to the owner of the property, in lieu of mailing the notice
as provided by subsection (1) of this section.
38-22-106
Priority of Lien - Attachments
(1)
All liens established by virtue of this article shall relate
back to the time of the commencement of work under the contract
between the owner and the first contractor, or, if said contract
is not in writing, then such liens shall relate back to and
take effect as of the time of the commencement of the work
upon the structure or improvement, and shall have priority
over any lien or encumbrance subsequently intervening, or
which may have been created prior thereto but which was not
then recorded and of which the lienor, under this article,
did not have actual notice. Nothing contained in this section,
however, shall be construed as impairing any valid encumbrance
upon any such land duly made and recorded prior to the signing
of such contract or the commencement of work upon such improvements
or structure.
(2) No attachment, garnishment, or levy under an execution
upon any money due or to become due to a contractor from the
owner or reputed owner of any such property subject to any
such lien shall be valid as against such lien of a subcontractor
or materialmen, and no such attachment, garnishment, or levy
upon any money due to a subcontractor or materialmen of the
second class, as provided in section 38-22-108 (1) (b), from
the contractor shall be valid as against any lien of a laborer
employed by the day or piece, who does not furnish any material
as classified in this article.
38-22-107
Lien Attaches to Water Rights and Franchises
Such liens likewise shall attach to rights of water and rights-of-way
that may pertain in any manner to any kind of property specified
in this article and to which such liens attach. In the case
of corporations such liens shall attach to all the franchises
and charter privileges that may pertain in any manner to said
specified property.
38-22-108
Rank of Liens
(1) Every person given a lien by this article whose contract,
either express or implied, is with the owner or reputed owner
or his agent or other representative, is a principal contractor
and all others are subcontractors; and in every case in which
different liens are claimed against the same property, the
rank of each lien, or class of liens, as between the different
lien claimants, shall be declared and ordered to be satisfied
in the decree or judgment in the following order named:
(a) The liens of all those who were laborers or mechanics
working by the day or piece, but without furnishing material
therefore, either as principal or subcontractors;
(b) The liens of all other subcontractors and of all materialmen
whose claims are either entirely or principally for materials,
machinery, or other fixtures, furnished either as principal
or subcontractors;
(c) The liens of all other principal contractors and all funds
realized in any actions for the satisfaction of liens against
the same improvements or structures shall be paid out in the
order above designated.
38-22-109
Lien Statement
(1) Any person wishing to avail himself of the provisions
of this article shall file for record, in the office of the
county clerk and recorder of the county wherein the property,
or the principal part thereof, to be affected by the lien
is situated, a statement containing:
(a) The name of the owner or reputed owner of such property,
or in case such name is not known to him, a statement to that
effect;
(b) The name of the person claiming the lien, the name of
the person who furnished the material or performed the labor
for which the lien is claimed, and the name of the contractor
when the lien is claimed by a subcontractor or by the assignee
of a subcontractor, or, in case the name of such contractor
is not known to a lien claimant, a statement to that effect;
(c) A description of the property to be charged with the lien,
sufficient to identify the same; and
(d) A statement of the amount due or owing such claimant.
(2) Such statement shall be signed and sworn to by the party,
or by one of the parties, claiming such lien, or by some other
person in his or their behalf, to the best knowledge, information,
and belief of the affiant; and the signature of any such affiant
to any such verification shall be a sufficient signing of
the statement.
(3) In order to preserve any lien for work performed or materials
furnished, there must be a notice of intent to file a lien
statement served upon the owner or reputed owner of the property
or his agent and the principal or prime contractor or his
agent at least ten days before the time of filing the lien
statement with the county clerk and recorder. Such notice
of intent shall be served by personal service or by registered
or certified mail, return receipt requested, addressed to
the last known address of such persons, and an affidavit of
such service or mailing at least ten days before filing of
the lien statement with the county clerk and recorder shall
be filed for record with said statement and shall constitute
proof of such service.
(4) All such lien statements claimed for labor and work by
the day or piece, but without furnishing material therefore,
must be filed for record after the last labor for which the
lien claimed has been performed and at any time before the
expiration of two months next after the completion of the
building, structure, or other improvement.
(5) Except as provided in subsections (10) and (11) of this
section, the lien statements of all other lien claimants must
be filed for record at any time before the expiration of four
months after the day on which the last labor was performed
or the last material furnished by such lien claimant.
(6) New or amended statements may be filed within the periods
provided in this section for the purpose of curing any mistake
or for the purpose of more fully complying with the provisions
of this article.
(7) No trivial imperfection in or omission from the said work
or in the construction of any building, improvement, or structure,
or of the alteration, addition to, or repair thereof, shall
be deemed a lack of completion, nor shall such imperfection
or omission prevent the filing of any lien statement or filing
of or giving notice, nor postpone the running of any time
limit within which any lien statement shall be filed for record
or served upon the owner or reputed owner of the property
or his agent and the principal or prime contractor or his
agent, or within which any notice shall be given. For the
purposes of this section, abandonment of all labor, work,
services, and furnishing of materials under any unfinished
contract or upon any unfinished building, improvement, or
structure, or the alteration, addition to, or repair thereof,
shall be deemed equivalent to a completion thereof. For the
purposes of this section, “abandonment” means
discontinuance of all labor, work, services, and furnishing
of materials for a three-month period.
(8) Subject to the prior termination of the lien under the
provisions of section 38-22-110, no lien claimed by virtue
of this article shall hold the property, or remain effective
longer than one year from the filing of such lien, unless
within thirty days after each annual anniversary of the filing
of said lien statement there is filed in the office of the
county clerk and recorder of the county wherein the property
is located an affidavit by the person or one of the persons
claiming the lien, or by some person in his behalf, stating
that the improvements on said property have not been completed.
(9) Upon the filing of the notice required and the commencement
of an action, within the time and in the manner required by
said section 38-22-110, no annual affidavit need be filed
thereafter.
(10) Within the applicable time period provided in subsections
(4) and (5) of this section and subject to the provisions
of section 38-22-125, any lien claimant granted a lien pursuant
to section 38-22-101 may file with the county clerk and recorder
of the county in which the real property is situated a notice
stating the legal description or address or such other description
as will identify the real property; the name of the person
with whom he has contracted; and the claimant’s name,
address, and telephone number. One such notice may be filed
upon more than one property, and, in the case of a subdivision,
one notice may describe only the part thereof upon which the
claimant has or will obtain a lien pursuant to section 38-22-101.
The filing of said notice shall serve as notice that said
person may thereafter file a lien statement and shall extend
the time for filing of the mechanic’s lien statement
to four months after completion of the structure or other
improvement or six months after the date of filing of said
notice, whichever occurs first. Unless sooner terminated as
provided in subsection (11) of this section, the notice provided
for in this subsection (10) shall automatically terminate
six months after the date said notice is filed. In the event
that said structure or other improvements have not been completed
prior to the termination of said notice, a claimant, prior
to said termination date, may file a new or amended notice
which shall remain effective for an additional period of six
months after the date of filing or four months after the date
of completion of said structure or other improvements, whichever
occurs first.
(11) Upon termination of agreement to provide labor or materials,
the owner, or someone in his behalf, may demand from the person
filing said notice a termination of said notice, which termination
shall identify the properties upon which labor has not been
performed or to which materials have not been furnished and
as to which said notice is terminated. Upon the filing of
said termination in the office of the county clerk and recorder
in the county wherein said property is situated, such notice
no longer constitutes notice as provided in subsection (10)
of this section as to the property described in said termination.
(12) The notices provided for in subsections (10) and (11)
of this section shall be recorded in the office of the county
clerk and recorder of the county wherein the real property
is located.
38-22-110
Action Commenced Within Six Months
No lien claimed by virtue of this article, as against the
owner of the property or as against one primarily liable for
the debt upon which the lien is based or as against anyone
who is neither the owner of the property nor one primarily
liable for such debt, shall hold the property longer than
six months after the last work or labor is performed, or materials
furnished, or after the completion of the building, structure,
or other improvement, or the completion of the alteration,
addition to, or repair thereof, as prescribed in section 38-22-109,
unless an action has been commenced within that time to enforce
the same, and unless also a notice stating that such action
has been commenced is filed for record within that time in
the office of the county clerk and recorder of the county
in which said property is situate. Where two or more liens
are claimed of record against the same property, the commencement
of any action and the filing of the notice of the commencement
of such action within that time by any one or more of such
lien claimants in which action all the lien claimants as appear
of record are made parties, either plaintiff or defendant
shall be sufficient.
38-22-111
Joinder of Parties - Consolidation of Actions
(1) Any number of persons claiming liens against the same
property and not contesting the claims of each other may join
as plaintiffs in the same action; and when separate actions
are commenced, the court may consolidate them upon motion
of any party in interest or upon its own motion.
(2) Upon such procedure for consolidation, one case shall
be selected with which the other cases shall be incorporated;
and all the parties to such other cases shall be made parties
plaintiff or defendant as the court may designate in said
case so selected. All persons having claims for liens, the
statements of which have been filed as provided in this article,
shall be made parties to the action.
(3) Those claiming liens who fail or refuse to become parties
plaintiff, or for any reason have not been made such parties,
shall be made parties defendant. Any party claiming a lien,
not made a party to such action, at any time within the period
provided in section 38-22-109, may be allowed to intervene
by motion, upon cause shown, and may be made a party defendant
on the order of the court, which shall fix by such order the
time for such intervenor to plead or otherwise proceed. The
pleadings and other proceedings of such intervenor thus made
a party shall be the same as though he had been an original
party. Any defendant who claims a lien, in answering, shall
set forth by cross complaint his claim and lien. Likewise
such defendant may set forth in said answer defensive matter
to any claim or lien of any plaintiff or codefendant or otherwise
deny such claim or lien. The owner of the property to which
such lien has attached, and all other parties claiming of
record any right, title, interest, or equity therein, whose
title or interests are to be charged with or affected by such
lien, shall be made parties to the action.
38-22-112
Allegations of Complaint
It is sufficient to allege in the complaint in relation to
any party claiming a lien whom it is desired to make a defendant,
that such party claims a lien under this article upon the
property described; and in case of the intervention of parties,
or of the making of new parties, or of the consolidation of
actions, so that the issues are in any manner changed or increased,
any party to the action shall be allowed to amend his pleadings,
or file new pleadings, as the nature of the case may require.
38-22-113 Hearing - Judgment - Summons - Defense
(1) The court, whenever the issues in such case are made up,
shall advance such cause to the head of the docket for trial
and may proceed to hear and determine said liens and claims
or may refer the same to a magistrate to ascertain and report
upon said liens and claims and the amounts justly due thereon.
(2) Judgments shall be rendered according to the rights of
the parties. The various rights of all the lien claimants
and other parties to any such action shall be determined and
incorporated in one judgment or decree. Each party who establishes
his claim under this article shall have judgment against the
party personally liable to him for the full amount of his
claim so established, and shall have a lien established and
determined in said decree upon the property to which his lien
has attached to the extent stated in this section.
(3) Proceedings to foreclose and enforce mechanics’
liens under this article are actions in rem, and service by
publication may be obtained against any defendant therein
in a manner as provided by law, and personal judgment against
the principal contractor or other person personally liable
for the debt for which the lien is claimed shall not be requisite
to a decree of foreclosure in favor of a subcontractor or
materialman.
(4) In such proceedings, it shall be an affirmative defense
that the owner or some person acting on his behalf has paid
an amount sufficient to satisfy the contractual and legal
obligations of the owner, including the initial purchase price
or contract amount plus any additions or change orders, to
the principal contractor or any subcontractor for the purpose
of payment to the subcontractors or suppliers of materials
or services to the job, when:
(a) The property is an existing single-family dwelling unit;
(b) The property is a residence constructed by the owner or
under a contract entered into by the owner prior to its occupancy
as his primary residence; or
(c) The property is a single-family, owner-occupied dwelling
unit, including a residence constructed and sold for occupancy
as a primary residence. This paragraph (c) shall not apply
to a developer or builder of multiple residences except for
the residence that is occupied as the primary residence of
the developer or builder.
38-22-114
Disposition of Proceeds - Execution
(1) The court shall cause said property to be sold in satisfaction
of said liens and costs of suit as in case of foreclosure
of mortgages; and any party in whose favor a judgment for
a lien is rendered, may cause the property to be sold within
the time and in the manner provided for sales of real estate
on executions issued out of any court of record, and there
shall be the same rights of redemption as are provided for
in the case of sales of real estate on executions. And if
the proceeds of such sale, after the payment of costs, are
not sufficient to satisfy the whole amount of such liens included
in the decree of sale, then such proceeds shall be apportioned
according to the rights of the several parties. In case the
proceeds of sale amount to more than the sum of said liens
and all costs, then the remainder shall be paid over to the
owner of said property; and each party whose claim is not
fully satisfied in the manner provided in this section shall
have execution for the balance unsatisfied against the party
personally liable, as in other cases.
(2) In the first instance without a previous sale of said
property to which such liens have attached, an execution may
issue in behalf of any such lien claimant for the full amount
of his claim against the party personally liable, and he may
thereafter enforce such lien for any balance of such judgment
remaining unsatisfied. A transcript of the docket of said
judgment and decree may be filed with the county clerk and
recorder of the county where such property is situated or
in any other county, and thereupon said judgment and decree
shall become a lien upon the real property in such county
of each party so personally liable in favor of any such lien
claimant holding any such judgment against any such party
so personally liable, as in other cases of recording transcripts
of judgment.
38-22-115
Parties to Action
Principal contractors and all other persons personally liable
for the debt for which the lien is claimed shall be made parties
to actions to enforce liens under this article, and service
of summons shall be made either personally or by publication
in the same manner and with like effect as is provided by
law in cases of attachment and other proceedings in rem.
38-22-116
Costs
The court shall divide the costs between the parties liable
therefore, according to the justice of the case.
38-22-117
Assignment of Lien - Failure to Support Lien
Any party claiming a lien may assign in writing his claim
and lien to any other claimant or other person who shall thereupon
have all the rights and remedies of the assignor for the purpose
of filing and for the enforcement of any such lien by action
under this article, and the assignment shall be a sufficient
consideration as to all other parties for the purpose of such
action. Such assignment may be made before or after the filing
of the statement of lien. Any such claimant, whether as assignee
or otherwise, may include all the liens he may possess against
the same property in any such statement, and when more than
one such claim is included in one such statement, one verification
thereto shall be sufficient. Any person may file separate
statements of two or more claims. If, on the trial of a cause
under the provisions of this article, the proceedings will
not support a lien, the plaintiff and all lien claimants entitled
thereto may proceed to judgment as in an action on contract,
and executions may issue as provided in such cases, and said
judgment shall have all the rights of a judgment in a personal
action.
38-22-118
Satisfaction of Lien - Failure to Release
The claimant of any such lien, the statement of which has
been filed, on the payment of the amount thereof, together
with the costs of filing and recording such lien, and the
acknowledgment of satisfaction, and accrued costs of suit
in case a suit has been brought thereon, at the request of
any person interested in the property charged therewith, shall
enter or cause to be entered an acknowledgment of satisfaction
of the same of record, and if he neglects or refuses to do
so within ten days after the written request of any person
so interested, he shall forfeit and pay to such person the
sum of ten dollars per day for every day of such neglect or
refusal, to be recovered in the same manner as other debts.
A valid tender of payment, refused by any such claimant, shall
be equivalent to a payment for the purpose of this section.
Any such statement may be satisfied of record in the same
manner as mortgages.
38-22-119
Agreement to Waive - Effect
No agreement to waive, abandon, or refrain from enforcing
any lien provided for by this article shall be binding except
as between the parties to such contract. The provisions of
this article shall receive a liberal construction in all cases.
38-22-120
Rules of Civil Procedure Apply
The provisions of the Colorado rules of civil procedure, insofar
as the same are applicable and not in conflict with the provisions
of this article, shall be observed in proceedings to establish
and enforce mechanics’ liens.
38-22-121
Liens of Surveyors and Engineers
The provisions of this article shall apply to surveyors, civil
and mining engineers doing any work of surveying or plotting
of any mines, mining claims, lodes, or mineral deposits, and
they shall have like lien and claim as other persons under
the provisions of this article.
38-22-122
Lien Under Two Contracts - Effect
In case the act of doing such work or of furnishing such materials
is continuous, said lien shall attach as in other cases, even
though such work is done or materials have been furnished
under two or more contracts between the same parties.
38-22-123
Payment to Avoid Invalid
No payment made by any owner to any contractor for the purpose
of avoiding any anticipated lien of any subcontractor shall
be valid; and if any person files either of said statements
for a lien for a larger sum than is due or to become due,
in fact, or in probability, as the case may be, with intent
to cheat or defraud any other person, and that fact appears
in any proceeding under this article, such person shall forfeit
all rights to such lien under this article.
38-22-124
Other Remedies Not Barred
No remedy given in this article shall be construed as preventing
any person from enforcing any other remedy which he otherwise
would have had, except as otherwise provided in this article.
In case of two or more owners, contractors, or subcontractors
interested in the same contract, the rule of procedure shall
be the same as in the case of one such.
38-22-125
Bona Fide Purchaser
No lien, excepting those claimed by laborers or mechanics
as defined in section 38-22-108 (1) (a), filed for record
more than two months after completion of the building, improvement,
or structure shall encumber the interest of any bona fide
purchaser for value of real property, the principal improvement
upon which is a single- or double-family dwelling, unless
said purchaser at the time of conveyance has actual knowledge
that the amounts due and secured by such lien have not been
paid, or unless such lien statement has been recorded prior
to conveyance, or unless a notice as provided in section 38-22-109
(10) has been filed within one month subsequent to completion
or prior to conveyance, whichever is later; except that nothing
in this section shall extend the time for recording lien statements
as provided in section 38-22-109 (4), (5), and (10). For the
purposes of this section, the dwelling shall be deemed complete
upon conveyance and occupancy if not completed before. The
lien for items of labor, work, or material which shall thereafter
be furnished shall be effective and may be claimed within
the time thereafter as provided in section 38-22-109 (4),
(5), and (10), and their priority shall not be affected by
this section.
38-22-126
Disburser - Notice - Duty of Owner and Disburser
(1) For the purposes of this section, the word “disburser”
means any lender who has agreed to make any loan to the owner
or contractor, the proceeds of which are to be disbursed from
time to time as work upon a structure or other improvement
progresses, or any part of which is to be withheld until all
or any part of such work is completed; or, any person who
receives funds from any lender, contractor, or owner to be
disbursed from time to time as work upon a structure or other
improvement progresses, or any part of which is to be withheld
until all or any part of such work is completed; or, any owner
who has agreed to pay any sum to any contractor from time
to time as work upon a structure or other improvement progresses,
or any part of which is to be withheld until all or any part
of such work is completed.
(2) It is the duty of the disburser, prior to the first disbursement,
to see that there has been recorded in the office of the county
clerk and recorder of the county where the land to be improved
is situated, a notice stating the name and address of the
owner, the names, addresses, and telephone numbers of the
principal contractor, if any, and the disburser, and the legal
description of the land and its address, if any. One notice
may include as many parcels as desired, providing that all
the information is stated as to each parcel. Such notice shall
be indexed by the county clerk and recorder under the name
of the owner and each principal contractor as grantors and
according to address.
(3) It is the duty of any person upon ordering or contracting
for any labor, services, machinery, tools, equipment, or materials
to be used as provided in section 38-22-101, upon demand of
the person from whom he is so ordering or with whom he is
so contracting, to furnish to such person a statement of the
names, addresses, and telephone numbers of the owner or reputed
owner of the land to be improved, the principal contractor,
if any, and the disburser, if any, as defined in subsection
(1) of this section, together with a legal description or
the address, if any, of the land to be improved.
(4) Any lien claimant who is entitled to a lien under this
article may give notice to the disburser stating the property
by address or legal description, or by such other description
as will identify the real property; the claimant’s name,
address, and telephone number; the person with whom he has
contracted; and a general statement of his contract.
(5) Such notice shall be in writing and shall be served upon
the disburser by certified mail or by delivering the same
personally to such disburser, or by leaving a copy at his
residence or at his place of business with some person in
charge.
(6) Upon such notice being received by the disburser, it is
the duty of the disburser, before disbursing any funds to
the person designated in said notice with whom said claimant
has contracted, to ascertain the amount due to the claimant
on any disbursement date, and to pay such amount directly
to the claimant out of any undisbursed funds available for
and due to said person designated in said notice on such date;
except that any amounts actually paid by the disburser to
others for labor, services, machinery, tools, equipment, and
material performed, supplied, or furnished for such structure
or improvement which are chargeable to said person designated
in said notice shall not be deemed available for said person
designated in said notice; and further except that if the
amount claimed by said claimant is disputed by said person
designated in said notice, the disburser may impound such
amount until the amount due is settled by agreement or final
judicial determination.
(7) If the disburser fails to comply with subsection (6) of
this section and the said claimant suffers loss by reason
of said failure the disburser shall be liable to said claimant
for the amount which the disburser should have paid claimant
to the extent of claimant’s loss.
38-22-127
Moneys for Lien Claims Made Trust Funds - Disbursements -
Penalty
(1) All funds disbursed to any contractor or subcontractor
under any building, construction, or remodeling contract or
on any construction project shall be held in trust for the
payment of the subcontractors, material suppliers, or laborers
who have furnished materials, services, or labor, who have
a lien, or may have a lien, against the property, or who claim,
or may claim, against a principal and surety under the provisions
of this article and for which such disbursement was made.
(2) This section shall not be construed so as to require any
such contractor or subcontractor to hold in trust any funds
which have been disbursed to him for any subcontractor, material
supplier, or laborer who claims a lien against the property
or claims against a principal and surety who has furnished
a bond under the provisions of this article if such contractor
or subcontractor has a good faith belief that such lien or
claim is not valid or if such contractor or subcontractor,
in good faith, claims a setoff, to the extent of such setoff.
(3) If the contractor or subcontractor has furnished a performance
or payment bond or if the owner of the property has executed
a written release to the contractor or subcontractor, he need
not furnish any such bond or hold such payments or disbursements
as trust funds, and the provisions of this section shall not
apply.
(4) Every contractor or subcontractor shall maintain separate
records of account for each project or contract, but nothing
contained in this section shall be construed as requiring
a contractor or subcontractor to deposit trust funds from
a single project in a separate bank account solely for that
project so long as trust funds are not expended in a manner
prohibited by this section.
(5) Any person who violates the provisions of subsections
(1) and (2) of this section commits theft, as defined in section
18-4-401, C.R.S. 1973.
38-22-128
Excessive Amounts Claimed
Any person who files a lien under this article for an amount
greater than is due without a reasonable possibility that
said amount claimed is due and with the knowledge that said
amount claimed is greater than that amount then due, and that
fact is shown in any proceeding under this article, shall
forfeit all rights to such lien plus such person shall be
liable to the person against whom the lien was filed in an
amount equal to the costs and all attorney’s fees.
38-22-129
Principal Contractor May Provide Bond Prior to Commencement
of Work
(1) Except as provided in subsection (4) of this section,
the provisions of section 38-22-101 (1) shall not apply if,
at the commencement of any work upon any construction project
for the improvement of real property as described in section
38-22-101 (1), a performance bond and a labor and materials
payment bond, each in an amount equal to one hundred fifty
percent of the contract price, are executed by the principal
contractor and one or more corporate sureties authorized and
qualified to do business in this state, for the protection
of all contractors, subcontractors, materialmen, and laborers
supplying labor or material in the prosecution of the work
on such construction project for the use of each contractor,
subcontractor, materialman, or laborer.
(2) All subcontractors, materialmen, mechanics, and others
who would otherwise be entitled to a lien under the provisions
of section 38-22-101 (1) shall have a right of action directly
against the principal contractor and his surety for the full
amount due. Such action shall be brought within six months
after completion of the last work on such project.
(3) In order to be effective, a notice of such bond shall
be filed with the county clerk and recorder of the county
wherein such project is situate prior to the commencement
of any work on the project and shall be indexed according
to both the street address and the legal description of the
property to be improved. The principal contractor shall post
a notice on the property that notice of such bond has been
filed with the county clerk and recorder and shall make available
copies of the bond to every contractor, subcontractor, materialman,
mechanic, or laborer upon request.
(4) If any claimant files for record a lien statement or other
notice, pursuant to section 38-22-109, such lien shall be
deemed released upon the filing for record of a notice executed
by both the principal and all sureties acknowledging the existence
of the bond furnished for such project and that said lien
claimant is entitled to claim the benefits of said bond. Such
acknowledgment shall be executed by the principal and sureties
upon demand of the owners or any person filing a lien statement.
Said notice may be delivered personally to the surety or its
agent and the principal or his agent or may be mailed by certified
or registered mail. If the principal and all sureties on any
such bonds fail or refuse to execute and record such acknowledgment
within thirty days after written demand is made upon them,
all lien claimants shall be entitled to enforce their lien
claims in the same manner as if no bond had been filed as
provided in subsection (1) of this section.
(5) In the event that any corporate surety on any bond filed
pursuant to the provisions of subsection (1) of this section
becomes subject to an order for relief under the federal bankruptcy
code of 1978, Title 11 of the United States Code, is the subject
of any state or federal corporate reorganization proceedings,
makes any assignment for the benefit of creditors, or otherwise
is unable to meet its financial obligations as they become
due, the provisions of this section shall not apply, and any
lien claimant shall be entitled to enforce such lien claim
in the same manner as if no bond had been filed as provided
in subsection (1) of this section.
38-22-130
Payment of Claims by Surety
(1) Subcontractors, materialmen, mechanics, and others who
have claims aggregating two thousand dollars or less each
on construction projects for the improvement of real property
as described in section 38-22-101 (1) for which a bond was
executed pursuant to section 38-22-129 shall serve upon the
principal contractor and his surety an affidavit, supported
by all reasonably available documentary evidence, that a claimant
has furnished labor or materials used or performed in the
prosecution of the work on such project, that he has been
unpaid therefore, and the amount of such claim. If after forty-five
days such affidavit remains uncontroverted, such surety shall
pay to such claimant forthwith the full value of his claim.
(2) Service of such affidavit may be accomplished by certified
or registered mail, by personal delivery to such person, or
by leaving a copy at his residence or at his place of business
with some person in charge.
38-22-131
Substitution of Bond Allowed
(1) Whenever a mechanic’s lien has been filed in accordance
with this article, the owner, whether legal or beneficial,
of any interest in the property subject to the lien may, at
any time, file with the clerk of the district court of the
county wherein the property is situated a corporate surety
bond or any other undertaking which has been approved by a
judge of said district court.
(2) Such bond or undertaking plus costs allowed to date shall
be in an amount equal to one and one-half times the amount
of the lien plus costs allowed to date and shall be approved
by a judge of the district court with which such bond or undertaking
is filed.
(3) The bond or undertaking shall be conditioned that, if
the lien claimant shall be finally adjudged to be entitled
to recover upon the claim upon which his lien is based, the
principal or his sureties shall pay to such claimant the amount
of his judgment, together with any interest, costs, and other
sums which such claimant would be entitled to recover upon
the foreclosure of the lien.
38-22-132
Lien to be Discharged
Notwithstanding the provisions of section 38-22-119, upon
the filing of a bond or undertaking as provided in section
38-22-131, the lien against the property shall be forthwith
discharged and released in full, and the real property described
in such bond or undertaking shall be released from the lien
and from any action brought to foreclose such lien, and the
bond or undertaking shall be substituted. The clerk of the
district court with which such bond or undertaking has been
filed shall issue a certificate of release which shall be
recorded in the office of the clerk and recorder of the county
wherein the original mechanic’s lien was filed, and
the certificate of release shall show that the property has
been released from the lien and from any action brought to
foreclose such lien.
38-22-133
Action to be Brought on Bond or Undertaking
When
a bond or undertaking is filed as provided in section 38-22-131,
the person filing the original mechanic’s lien may bring
an action upon the said bond or undertaking. Such action shall
be commenced within the time allowed for the commencement
of an action upon foreclosure of the lien, and the statute
of limitations applicable to a lien foreclosure shall apply
to the action upon the bond or undertaking as it would had
no bond or undertaking been filed. |
