Mechanic's liens affect all aspects of construction in Colorado. When a contractor finishes their work and the owner refuses to pay, the only option may be to file and enforce a mechanics lien. Conversely, owners must understand how mechanics lien works to protect themselves against contractors who file those liens. Subcontractors, who do not always have contracts with the owner, also need mechanics liens to recover payment if the general contractor or owner refuses to pay them.
Depending on the type of work that you perform the rules vary, but no matter where you are in the lien process, you can get help.
If you’re feeling overwhelmed, you’re not alone. The confusion swirling around mechanic's liens is what keeps many contractors from asserting their rights and getting paid. Our goal is to make this process easier to understand and help contractors get the payment they are owed.
As you explore your rights and plan your next steps, keep these tips in mind:
1. Know Your Timeline for Filing a Lien or Extending Your Filing Time
There are a lot of factors that influence when you can file a lien. Misunderstanding your role in a project or the variety of factors at play could cause you to forfeit your right to a lien. Factors that affect the deadline include what your role in the project was, whether or not the improvement is complete, and which type of structure you worked on.
2. Make Sure You Have All the Right Paperwork and Documentation
The Lien Statement and the Notice Extending Time to File Mechanic’s Lien are two documents you may need—although you’ll only need the latter if you extend your lien. However, before you actually record the Lien Statement, you must serve a Notice of Intent to File a Lien. Only after that has been served can you move forward with the Lien Statement and, if necessary, the extension of the statement. If you miss a step in the process, you could sabotage your efforts to get paid.
3. Document Everything
As a contractor, you already know the importance of thorough documentation. However, it’s crucial to keep copies of contracts, work logs showing when work is started and completed, and contact logs indicating your efforts to get paid. Spending more time keeping thorough records can actually help you spend less time on the lien process down the road, so put the work in upfront.
Filing a lien can seem intimidating and confusing. But, in truth, filing a lien is a relatively straight forward process. This infographic will help you gain the confidence to pursue the compensation you deserve for your work. Simply follow the arrows, choosing the situation that applies to you, and you will gain an understanding of your proper course of action.
We know that unpaid projects can be a major setback for any contractor, and in many cases, they can cause hardworking contractors to lose their businesses. If you want to cover all your bases and avoid any potential errors or delays, we’re here to provide you with more specialized advice and guidance. Learn more from Griffiths Law, PC.