Page 9 - State Law Summary of Mechanic's Lien Law

Colorado CO

What is the statutory authority? Is there a procedure to bond over the mechanic’s lien(s)?
Colorado Revised Statutes Annotated, § 38-22-101 through § 38-22-133. Colorado provides for filing a bond with the Clerk of the District Court of the county
where the property is located. The bond must be in the amount equal to 1 1/2 times
What is the Attachment Date of the Mechanic’s Lien? the amount of the lien plus costs and shall be approved by a judge. Upon the filing
A mechanic’s lien is considered to relate back from the date work began under of this bond the lien is discharged and then released in full by a certificate of
the contract between the property owner and the first contractor, or if there release executed by the Clerk of the District Court. This certificate of release must
is no written contract, then from date work actually started on the building or be recorded in the real estate records. Co. St.. § 38-22131; Co. St.. § 38-22-132.
improvements. Co. St. § 38-22-106.
Are the ALTA 32/33 Series Endorsements available for the Loan Policy?
What constitutes visible commencement of construction? Yes.
In Colorado non-site work such as preliminary plans and drawings prepared by
the architect, engineering services, surveying, superintendence or delivery of
materials constitutes commencement. See Sontag v. Abbott, 140 Colo. 351, 344
P.2nd 961 (1959), State Bank of Chicago v. Plummer, 54 Colo. 144, 120 P.819 (1913) and
Bankers Trust Company v. El Paso Pre-Cast Company, 192 Colo. 468. (1977).

What is the priority of the insured construction mortgage/
deed of trust?
It is virtually impossible for a Deed of Trust to obtain legal priority over subsequently
filed mechanic’s liens. Mechanic’s liens relate back to the “time of commencement
of work under the contract between the owner and the first contractor, or if said
contract is not in writing, then…the time of commencement of work…” Co. St. §
38-22-106(1).
If priority of the insured mortgage/deed of trust is lost, is there a
statutory procedure to regain priority?
No.

When does a mechanic’s lien have to be filed for claimant to maintain
lien rights?
If the lien is claimed for labor or work performed by the day or piece without
providing any materials (commonly known as laborers work), the claimant
(laborer) must record the lien statement within two months after completion of
the improvement. Co. St. § 38-22-109(4).

For all other claimants, the claimant must record the lien statement within four
months after the last day that claimant performs labor or furnishes laborers or
materials at the property. Co. St. § 38-22-109(5).

What is the period of enforcement of a filed mechanic’s lien?
A foreclosure of mechanic’s lien must be commenced before the earlier of 6
months after completion of construction of the entire project or after last work
is performed or materials furnished. The statute provides that if construction of
the project is not complete within 1 year after the statement of lien is recorded, an
affidavit stating that construction is not complete may be recorded within 30 days
after the annual anniversary of recording the lien statement. Because it cannot
always be determined that the date of completion of construction for purposes of
the 6 month period it is common practice to follow a general rule that mechanic’s
liens are valid for a period of 13 months after date of recording. Co. St. § 38-22-
109(8); Co St. § 38-22-110.

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