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In Colorado, as with most states, liens are created by statute. As a result, for a party to take advantage of the protections and rights afforded by liens, there must be strict compliance with the required statutory steps to impress a lien on a non-complying party.
Liens can be placed on personal and real property in a variety of situations. A judgment lien occurs after trial or by default and can encumber real or personal property, by the recording of the transcript of judgment. By law, the lienor is entitled to statutory interest of 8.0% or at the rate of interest as agreed to by the parties. A mechanic's or materialman's lien is a result of providing services or product, which remains unpaid after demand. Commonly, these liens occur in the area of construction law by suppliers of materials or subcontractors performing day labor or project labor. While not often contemplated, liens can result for automotive services, laundry services, and even for farming and ranching services.
If the steps are correctly and timely followed, liens can be a powerful and effective negotiating tool for a party to obtain payment. As an example, by placing a valid lien on property, the party can effectively avoid an imminent transfer of title and obligate the non-paying party to satisfy the amounts in controversy.
For purposes of brevity, I will restrict my general and brief synopsis to the most often-used lien which arises in the field of construction law- the mechanic's and materialman’s liens.
Lienors, within a relatively short period of time, must give proper Notice of the Intent to File a Lien to the non-paying party. Those requirements of proper notice are set forth in the lien statute, C.R.S. § 38-22-101, et seq. In the event the non-paying party fails to address the issues as set forth in the Notice, the lienor then is entitled to file and record a Lien Statement with the Clerk and Recorder in the county in which the services were performed. However, a cautionary note: failure to properly and timely follow the steps to impress a lien on property can result in attorney’s fees and costs being assessed against you.
Unfortunately, when a lienor represents themselves what commonly occurs after compliance with the statutory notice provisions of the lien, is that the lienor fails to commence litigation within six months after the last day of services performed. As a result, the lien must be removed and the party must commence litigation based on other legal theories of relief, such as contract (oral or written), quantum meruit, or unjust enrichment.
At Schunk & Dunn, we accept local and out-of-state construction law cases, including those involving non-payment of services or materials. We represent owners, architects, general contractors, subcontractors, day laborers, suppliers, and other third parties, such as realtors, appraisers, and surveyors.
Our primary focus at Schunk & Dunn is to maximize your return and achieve of the benefits of your work as fully permitted by law. We accept cases on a straight fee, contingency fee, flat fee, and/or a hybrid of contingency and straight fee basis.
Call Schunk & Dunn, LLC for an initial 30 minute free consultation.