If you work in the building trades or you’re a general contractor in the Durango area, it could very well happen to you one day—a client doesn’t pay. Once you have exhausted all efforts to secure the money you’re owed, it could be time to file a mechanics lien in La Plata County. This is a legal tool designed to help you get properly compensated for labor and/or materials for a construction project.
Though it can be a bit confusing, the process is not difficult. Just pay attention to the three D’s: deadlines, documents, and details.
The first thing to know about filing is the time periods set by the state of Colorado. The state mandates you must file:
- Within four months (120 days) of the last date you provided labor and/or materials
- Within two months if you only provided labor
In some cases, it’s possible to be granted an extension, but it’s best not to count on this. Conversely, the filing period can be shortened to two months for a one- or two-family home if it is being sold.
You may eventually need to file three documents:
- A notice of intent (NOI) to lien, to be sent to the property owner at least 10 days before filing the lien
- The mechanics lien document
- A lien release, also called a notice of satisfaction
Since Colorado requires you include the lien statement with the NOI, you should prepare the first two documents at the same time. You can wait to work on the lien release until later. If you are fortunate enough to get paid within the 10-day notification period, you won’t have to actually file the lien and create a lien release.
The NOI can be a letter to the property owner. It should include your company name, the amount outstanding, the name of the property owner, who hired you for the job, and a description of the property. If you don’t want to serve the notice personally, you can mail it to the owner by certified mail with a return receipt requested.
The lien statement itself includes most of that information and a bit more. Note that there are two lien forms in Colorado, one for general contractors and one for subcontractors. You can find the forms here. Leave a 1” margin around the edges of all documents for county use.
In order to preserve your lien rights in Colorado, it’s critical to be accurate with the information you provide. It’s especially important to ensure that the amount you’re owed by the property owner is correct. In most cases you cannot claim additional fees, such as attorney fees and late fees.
Filing a mechanics lien in La Plata County can be done in person or by mail or a delivery service at the County Recorder’s office. There’s also a 24-hour drop box available. If you did not receive payment within the 10-day notification period, deliver these documents to county staff after making copies for yourself:
- The NOI
- Proof of NOI receipt by the property owner from the Postal Service
- The mechanics lien statement
- $13 recording fee for the first page, $5 for each additional page
- A self-addressed, stamped envelope for returning the originals to you
This information is subject to change, so you may want to call the Clerk Recorder’s office for any updates before you file. They can also help you understand the process, (though they don’t offer advice). The number is 970-382-6280.
It may seem a bit odd, but you’re not required to notify the property owner that the lien has been filed. Most experts recommend you do so, however, to increase your chances of getting paid.
Should you receive payment after the lien has been recorded, you’ll need to file a lien release form—Colorado requires it and you should file it within 10 days to avoid possible penalties. You can find a sample form here.
If the property owner still can’t or won’t settle their debt, you’ll need to consider hiring a construction attorney to enforce the lien. Essentially this means foreclosing on the property. In Colorado, mechanics liens expire after 6 months, so don’t wait too long to start the process. If you’ve kept accurate records and filed the NOI and lien documents correctly, it may very well not come to this.
There are firms that can help you through filing a mechanics lien; a simple online search will offer several alternatives. You can take on the process yourself, however, and we encourage you to consider doing so to preserve funds in case you need an attorney down the road.
Best of luck to you!