Put a Lien On It

Filed Under (Foreclosure, Mechanics Liens, Real Estate) on 16-09-2014

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.

Bradford Publishing Launches Colorado-Only Attorney Directory

Filed Under (Bradford Publishing News & Updates, Business, Child Support, Custody and Visitation, Colorado Deeds, Divorce and Legal Separation, Domestic Partnership, Employment Law, Eviction, Leases and Landlord Tenant, Mechanics Liens, Medical Marijuana, Probate, Real Estate, Wills and Estates) on 08-11-2013

We’re excited to announce our new Colorado Attorney Directory! On November 1st we launched an online directory to link Colorado consumers with Colorado attorneys. Bradford has offered information, products and services for Colorado attorneys, businesses and consumers for more than 100 years.  With changing technology, most of our products and services have moved online to our website.  Now, more than 12,000 people visit our website each month in search of legal resources.

Bradford provides lots of self-help solutions for you to complete a legal procedure on your own, but sometimes it’s not enough and contacting a legal expert is necessary. Now we can connect you to attorneys practicing in your local Colorado community. Deciding whether to hire an attorney is a big decision.  The bottom line is knowing if you’re capable and willing to take on a particular legal task yourself. Sometimes you don’t realize immediately that the task is beyond your capabilities.

The new Colorado-only Attorney Directory can help you find the right attorney. Laws vary by state so it’s important to follow Colorado law. We make sure the attorneys listed are lawyers in good standing with the Colorado Supreme Court. They also have completed profiles on the site, so their expertise and experience is clear and allows you to know as much as possible about the lawyer’s practice before picking up the phone. Our goal is to provide easy access to Colorado attorneys who can help you find legal solutions.

Check out our new Colorado Attorney Directory and let us know what you think!


How Colorado Mechanics’ Liens are Avoided or Prevented

Filed Under (Mechanics Liens) on 25-07-2013

The mechanics’ lien statutes in Colorado give those who work on construction projects an effective mechanism for collecting unpaid past due amounts. The Colorado statutes contain broad remedies and can help resolve many collection problems faced by general contractors, subcontractors, materialmen, and even manual laborers.

If you are an owner of the property or the General Contractor who uses subcontractors and material suppliers, having a mechanics lien filed on the property can be very problematic. There are several legal and practical ways to prevent or avoid having mechanics’ liens filed on your construction projects. The most obvious and well known is payment coupled with a waiver and release of mechanics’ lien rights. Most general contractors, construction lenders and others experienced in the building industry use a waiver and release to terminate mechanics’ lien rights. The waiver and release is normally placed on the back of checks and, accordingly, only affects and is binding on the person endorsing the check. There are also lien waiver forms available at Bradford Publishing Co.

Here are some other ways that result in the prevention or avoidance of a mechanics’ lien:

•    Posting a Bond
If the general contractor posts a bond before beginning a project, mechanics’ liens cannot be filed against the real property and improvements that make up the project. An owner or general contractor can also post a bond after a mechanics’ lien has been threatened or recorded. Lien claimants have the right to seek recovery of the amounts owed them from the bond and the insurance company that posts the bond. Because these bonds are required by Colorado statute to be in the amount of 150% of the cost of construction or the amount of the lien, it is actually preferable, in most cases, for a bond to be posted.

•    Bankruptcy Continue reading “How Colorado Mechanics’ Liens are Avoided or Prevented” »

Should I Hire an Attorney for My Legal Issue?

Filed Under (Business, Colorado Deeds, Divorce and Legal Separation, Eviction, Leases and Landlord Tenant, Mechanics Liens, Power of Attorney, Probate, Real Estate, Small Claims, Starting a Business, Wills and Estates) on 23-05-2013

The decision to hire an attorney depends upon assessing the situation — and then being honest with yourself about your ability to handle the matter on your own.

First, always consult an attorney for:

•    Criminal charges
•    If you are sued
•    Bankruptcy
•    Employment issues (whether you are a business or an employee)
•    Personal injuries
•    Entering a franchise agreement
•    Selling a business, or bringing new owners into a business.

Individuals may effectively handle family law matters, business transactions, estate planning, and tax issues. However, one has to consider the costs of time and expertise when deciding to act without an attorney.

Advantages of handling a legal issue yourself:
•    There are Court-approved forms and books to help you.
•    You can move quickly, not waiting for an attorney to get to your matter.
•    You save money by not hiring an attorney.

Disadvantages of handling a legal issue yourself: Continue reading “Should I Hire an Attorney for My Legal Issue?” »

My Colorado Mechanics’ Lien is Filed, Now What?

Filed Under (Mechanics Liens) on 24-05-2012

Filing the Lawsuit

If recording a lien doesn’t result in payment, you must file a lawsuit in order to enforce your mechanics’ lien rights. One of the most common misconceptions about Colorado mechanics’ lien law is that a lien will bind the project and the real property without you taking any other steps. This is not correct! Your mechanics’ lien will automatically evaporate if a lawsuit to foreclose on the lien is not filed within 6 months after completion of ALL work on the project. This is different than the time frame for filing the Statement of Mechanics’ Lien.

In addition, a notice called a Lis Pendens, Bradford form No. 137, must be filed with the County Clerk and Recorder within the same 6 month time period. Lis Pendens means lawsuit pending and it provides a warning to anybody who inspects the title to the real property that there is a lawsuit pending that affects the property.

What will it cost to file a lawsuit?

Lawsuits to foreclose on mechanics’ liens are quite complicated and most often an attorney is engaged to assure that the lawsuit is properly prepared and prosecuted. Hiring an attorney and pursuing a lawsuit to recover on your mechanics’ lien can be expensive. You must weigh the costs and benefits carefully before undertaking a lawsuit.

The costs for a mechanics’ lien foreclosure action can vary, depending on the number of parties involved, what issues are disputed, whether or not you have an attorney, and other factors. But the costs always include obtaining a foreclosure certificate from the title company, filing fees, and service of process fees. If the quality of your services or materials is challenged in the lawsuit, you may also need to hire an expert to testify on these issues. Experts are expensive and elevate the costs. The attorney’s fees are the largest unknown cost. A contested mechanics’ lien lawsuit over a large construction project can be very expensive.

Where do I file the lawsuit and how long will it take?

On larger construction projects, you may find that multiple mechanics’ liens will be recorded with the County Clerk and Recorder. If more than one mechanics’ lien claimant files a lawsuit on the same project, the lawsuits will generally be joined together with a single judge handling the consolidated cases. If this is the situation, the lawsuit would be brought to District Court to seek foreclosure on the mechanics’ lien. This will take quite a bit more time than if you’re a single claimant filing in a lower Court, because the Court in this case will need to determine two things: the validity and the amount owed to each of the lien claimants; and the “ranking” or priority of all of the persons who have a recorded interest in the property. Once the matter of ranking, validity and amounts are determined the Court essentially orders the real property and improvements sold at a public sale to the highest bidder. The proceeds of the sale are divided in accordance with the ranking established by the Court.

You always have the right to bring a suit on your contract with the owner or the general contractor. Such a suit may be brought in County Court or District Court. County Court proceedings are less expensive than District Court, and normally take no longer than 6 months from beginning to end. If the claim is worth more than $15,000 it must be brought in the District Court. County Court proceedings do not require you to hire an attorney, but having one is advisable. The County Court has a small claims division that handles matters of up to $7,500 in value, and no attorneys are allowed.

For information on how to file in small claims court, get Bradford’s book “Winning Big in Colorado Small Claims Court”.  To understand the entire Mechanics’ Lien process, you will find Bradford’s booklet “Know Your Mechanics’ Lien Rights:  A Guide to Colorado Law” , to be a helpful resource.

Giving Notice and Recording a Colorado Mechanics’ Lien

Filed Under (Mechanics Liens) on 24-04-2012

Completing a Colorado Mechanics’ Lien form, providing the required advance notice of the intent to file the lien, and recording the lien all require strict adherence to Colorado law and great attention to detail. Because Colorado courts strictly construe these rules, you will lose your lien rights if mistakes are made regarding the form or timing of these documents.

What form do I need?

The Statement of Mechanics’ Lien with Notice of Intent to File a Lien Statement, form No. 180A, is available from Bradford Publishing. The front of the form is the Lien Statement that details the names and addresses of the person or company filing the lien and the general contractor. It also describes the property and the amount of the claim. The reverse side of the form contains the Notice of Intent to File a Lien Statement and the Affidavits as to when notice was sent.

How do I give notice that I’m filing a mechanics’ lien?

After you complete the front of the Statement of Mechanics’ Lien, you must complete the Notice of Intent to File a Lien Statement on the back. This part gives notice to the general contractor and owner that you intend to record your lien if you are not paid within 10 days. After both have been completed, copies of the form must be given to the owner and the general contractor (unless you are the general contractor) either by personal delivery, or by registered or certified mail, return receipt requested. This must happen at least 10 days before the lien can be filed. This 10 day period begins to run only upon actual delivery of the form to both the property owner and the general contractor. After the entire form has been served on the owner and the general contractor, you may complete the 3 affidavits of service on the back of the form.

When and where do I record my lien?

In order to complete and secure your mechanics’ lien rights, the original or a copy of the proposed lien and the Affidavits must be filed with the Clerk and Recorder in the county in which the construction project is located.  Generally, material men, general contractors and subcontractors must record their Lien no later than 4 months after they last provided material, work or services to the project. Warranty work, and even “punch list” items, may not count as the last work performed on a project. If you leave the project for any reason before completing your contract, the 4 month period still begins at the time you left the project.

To learn more about mechanics’ liens, see other Bradford blogs on Filing a Colorado Mechanics’ Lien, or get the details from Bradford’s booklet, Know Your Mechanic’s Lien Rights :A Guide to Colorado Law.

The Benefits of Filing a Mechanics’ Lien in Colorado

Filed Under (Mechanics Liens) on 19-03-2012

If you haven’t been paid for work you did on a construction project, filing a Colorado mechanics’ lien is a potent weapon at your fingertips. There are few collection tools more effective in Colorado law than filing a mechanic’s lien.

A mechanics’ lien (sometimes called a construction lien) is a security interest in the title of a property for the benefit of those who have worked on the property. When it is recorded in county real estate records it attaches to the property. If your mechanics’ lien rights have been properly asserted, the property owner cannot sell any part of the property without clearing up the recorded and outstanding mechanics’ liens.

If your dispute is with a project under construction, the developer may not be able to get permanent financing if a mechanic’s lien is recorded against the project. That means the owner/ developer cannot sell the project or any units and cannot finance it. In short, filing a Colorado mechanic’s lien forces the developer to address your unpaid bills.

Which liens get paid first?

Under Colorado real estate law, liens, deeds of trust, and mortgages get paid in the order in which they were recorded. Colorado mechanics’ lien law says that mechanics’ liens are held as recorded as of the time that the first work began on the project. Architects, engineers, surveyors, or soil testing experts often complete the first work on a construction project and this type of preliminary work often occurs before the construction loan is put in place.

As a result, mechanics’ liens have priority over a deed of trust or mortgage recorded after the work was commenced and can take precedence over the construction loan. Because banks and lending institutions will not permit mechanics’ liens to be placed ahead of the deed of trust securing the construction loan, the mere recording of a mechanics’ lien will often cause the construction lender to pressure the owner or developer to pay their bills.

To learn more about mechanic’s liens, get Bradford Publishing’s helpful booklet, “Know Your Mechanics’ Lien Rights: A Guide to Colorado Law,” that will give you an overview of the legal process, and provide guidance and instructions about basic mechanics’ lien forms.

When it’s NOT OK to File

Filed Under (Mechanics Liens) on 23-02-2012

In most circumstances, if you have provided labor, materials, equipment, or services to a construction project, and you have not been paid, you are entitled to a lien on the project and the related real property. There are a few types of projects, however, where Colorado law prohibits the filing of a mechanics’ lien.

What about government projects?

Colorado statutes prohibit the filing of a mechanics’ lien on construction projects involving the State of Colorado, Colorado counties and towns, and other state agencies. This prohibition applies to buildings, the construction of roads and bridges, and any other similar projects undertaken by the State of Colorado or any of its political subdivisions. Fortunately, Colorado’s “Public Works Bonding Act” requires any contractor performing work for the State of Colorado to obtain a bond. So, if you have not been paid, you are entitled to make a claim against the bond. You may be required to bring a lawsuit against the bond company or other surety or insurance company that provided the bond. Such a lawsuit must be brought within six months after completion of the entire project for which you are owed money.

The Miller Act, a federal law, provides similar rights and remedies for construction projects undertaken by the federal government. It requires the posting of a “payment bond” against which you can make a claim if you are not paid.

Can you record a lien against a single-family residence?

In 1987, the Colorado legislature created an important exception to the general rule that mechanics’ liens attach to every kind of property. The exception applies to single-family residences. If the owner of a single-family residence has paid the general contractor in full, then no one can record a mechanics’ lien. The residence may be either new or existing, but it must be occupied or intended to be occupied by the owner as a primary residence. With the exception of owner occupied single-family residences and public works, however, Colorado mechanics’ liens may be filed in all types of construction projects.

To learn more about mechanics’ liens, get Bradford Publishing’s helpful booklet “Know Your Mechanic’s Lien Rights: A Guide to Colorado Law,” that will give you an overview of the legal process, and provide guidance and instructions about basic mechanics’ lien forms.

Job Done, But No Pay. Now What?

Filed Under (Mechanics Liens) on 31-01-2012

What is a mechanics’ lien?

Colorado law provides a powerful tool for contractors, subcontractors, suppliers and others involved with construction or repair of improvements on real property, to collect money owed to them – a mechanics’ lien. In most circumstances, if you provided labor, materials, equipment, or services for a construction project and you haven’t been paid, you are entitled to a lien on the project and the related real property.

A mechanics’ lien is a security interest, much like a mortgage or a deed of trust, on real property (land) and any construction or improvements on the real property. Like a deed of trust, a mechanics’ lien is paid out of the proceeds of the sale of the real property against which the lien has been filed.

Although it says it is for a mechanic, it is not for use by an auto mechanic who has not been paid for work on a vehicle. Mechanics’ liens can be attached to undeveloped land, existing structures, partially or fully completed new construction projects, and commercial or residential projects.

Who can file a mechanics’ lien?

Lumberjack Lumber Company provided the decking materials for a new apartment complex but didn’t get paid by the subcontractor who ordered the materials to build the decks. The subcontractor who was hired to do all the bathroom tile work didn’t get paid by Premier Construction Management Company who is responsible for the entire project. A-1 Landscaping Company planted 20 new trees at the entrance to the local golf course, but hasn’t been paid. In each of these examples the companies or individuals who provided the materials or did the work and didn’t get paid have a right to file a mechanics’ lien to collect what they are owed.

Does it work?

If you follow precisely all the rules and requirements of the Colorado statutes, your mechanics’ lien will give you a security interest in the construction project and the real property, and will require the owner, developer or general contractor to pay the amounts you are owed. You must, however, follow the laws exactly, and you may have to file a lawsuit.

Bradford Publishing’s helpful booklet “Know Your Mechanic’s Lien Rights: A Guide to Colorado Law,” will give you an overview of the legal process, and provide guidance and instructions about basic mechanics’ lien procedures and forms.