At Bradford Publishing, customers often ask us for lien documents for a variety of reasons. There seems to be a common belief that if someone is owed money but is not being paid, that just putting a lien on the debtor’s property will solve the problem…..and it’s true…..but there is a process. Here are three of the most common reasons to file a lien on property and how to do it.
1. You’re lending someone money. If you are kind enough to lend someone money it is important to protect yourself. Use a Deed of Trust to secure the loan. This document will put a lien on the real property of the borrower. If something should go wrong and you don’t get paid back, you can start the foreclosure process on the property. If the borrower tries to sell the property there will be a cloud on the title and they will be forced to pay the debt.
2. Construction Lien. You did work on someone’s real property and didn’t get paid for it. If this has happened you can file a Mechanic’s Lien. This type of lien will cloud the title and prevent the owners from selling until they pay the debt.
3. If someone owes you money. If you lent someone money and did not file a deed of trust to secure the loan, you will need to file a suit in order to place a lien on the borrower’s real property. If the total amount due is under $7,500, you can use the Small Claims Court. If the total amount is between $7,500 and $15,000 you can file the suit in County Court. If it’s over $15,000 you will have to go to District Court. Wherever you decide to file, you can file a Notice of Lis Pendens with the Complaint form. This will put a temporary cloud on the title of the borrower’s real property until the judgment is issued. Once you have judgment, the transcript can be filed and a permanent lien will be placed on the property.
This is just a brief explanation of your lien options. If you are in one of these situations, it is wise to consult with an attorney. Please check out our local attorney directory to find a trusted Colorado Lawyer.