Commercial Mechanic's Liens In Colorado: Frequently Asked Questions

In Colorado commercial construction, a mechanic’s lien is a substantial remedy with real teeth that can help a contractor get paid out on a claim. If you are providing labor, materials, equipment, or services that are incorporated into a commercial project, you likely have lien rights. 

Property owners do not want a lien attaching to their real property, which is exactly why this tool can be so effective at compelling them to release monies owed. But here’s the reality: A single procedural misstep can render the whole thing void, and even seasoned contractors make these mistakes more often than you’d think.

Below are answers to the most common questions I receive about mechanic’s liens and how to avoid mistakes that can blow up your claim.

What is a mechanic’s lien in Colorado, and how does it work?

A mechanic’s lien is a statutory tool that protects contractors, subcontractors, and suppliers on construction projects. Unlike a standard lawsuit, which goes after the person who hired you, a lien attaches to the real estate, itself.

It creates massive leverage because if the owner is trying to sell or refinance the property, a mechanic’s lien can stop them in their tracks. Simply filing a notice of mechanic’s lien is often enough to help you extract the money you’re owed.

Who can file a mechanic’s lien in Colorado?

If you’re providing labor, equipment, services, or supplies, then you may have lien rights. This includes everyone from the general contractor to subcontractors and material suppliers. 

You don’t even need a direct contract with the owner to file a lien on their property. 

How long do you have to file a mechanic’s lien in Colorado?

For most commercial contractors and suppliers, you have exactly four months from your last date of work or last day of supply to record your lien statement. If you are strictly a labor supplier, that window is even shorter—two months.

But before you record the lien, you must serve a Notice of Intent to File a Lien on the owner at least 10 days prior to filing. If you miss these dates by even 24 hours, your lien rights are null and void.

What happens after a mechanic’s lien is filed?

Once the lien is recorded in the county where you did the work, it sits on the title. If the owner or GC still refuses to pay, you have six months from your last date of work to file a lawsuit to foreclose on the lien.

It’s important to note that a lien is leverage, not an automatic paycheck. Most of the time, the mere threat of lien foreclosure is enough to compel a settlement, but there is the possibility that you will need to follow through and file a lawsuit before that six-month deadline hits if you still haven’t been paid.

What are the most common mechanic’s lien mistakes?

Even sophisticated contractors get burned by common mistakes that can result in not only the lien being deemed invalid, but that also put them at risk of having to pay statutory penalties, including the other side’s attorney’s fees and costs. 

Here are the five biggest traps to watch out for:

1. Missing the Strict Notice and Notary Requirements 

Timing is a big one. You have to provide a Notice of Intent to the owner at least 10 days before filing the lien. This isn’t a suggested timeframe; it’s a hard requirement. Furthermore, the documents must be signed and notarized. If your paperwork isn’t notarized correctly or your timing is off by a single day, it is invalid. In addition, if you fail to file a lawsuit within the six-month deadline, you have waived your claim for lien foreclosure.

2. Using the Wrong Legal Description on Partitioned Lots

Commercial properties are often partitioned immediately after purchase. For example, a single parcel might be split into three distinct lots: a gas station, a fast-food restaurant, and a shoe store. If you provide materials for the gas station, but your lien lists the legal description for the shoe store, your lien is defective. An attorney can obtain current title work to ensure your lien attaches to the exact lot where your work was incorporated.

3. Overstating the Lien Amount 

The amount of your lien must be based strictly on work or materials already provided to the project. You cannot include “unearned work” in your statement. For example, say you have a $100,000 contract, complete $50,000 worth of work, and then are terminated. If you put a lien on the property for the full $100,000 (including $50,000 of work that was never complete), not only is your lien now invalid, but you could be stuck paying the other side’s legal fees in releasing the invalid lien.

4. Getting Strung Along Too Long

I regularly see sophisticated GCs keep subcontractors on the hook with promises to pay just to string them along. Sophisticated GCs know the lien deadlines better than most subcontractors do, and they know that if they can get you past that 4-month window without a lien being recorded, your leverage vanishes. At that point, your only option will be a standard lawsuit, which is much slower and more expensive.

5. Relying on Generic or AI Forms

Sometimes people buy generic lien forms online or use AI to draft them. These present a massive risk to lien validity because they often fail to conform to Colorado’s specific statutory language, rendering your lien void.

When should I call a lawyer about a construction payment dispute?

If you haven’t been paid in 60 days, contact an attorney. Don’t wait until you’re nearing the end of your 4-month window.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.