When the contractor on a commercial project fails to pay one or more of its subcontractors, the aggrieved subcontractor can seek a mechanic’s lien to help set things right.
A mechanic’s lien is a legal claim to the property on which the subcontractor worked. This gets the property owner involved, on the theory that a subcontractor’s need to get paid for its labor is greater than the owner’s need to have clear title to their improved property. A subcontractor, supplier or other entity has the right to ask the court for a mechanic’s lien even when the property owner has paid the contractor in full. A subcontractor does not need to be licensed to file a mechanic’s lien.
The mechanic’s lien process
In Colorado, the process starts with the subcontractor serving the property owner with a Notice of Intent to Lien. As the claimant, you must wait at least 10 days after serving the notice before filing it with the court in the county where the property is located.
Once that is done, the law gives you four months to file the lien with the court. This gives you, the contractor and the property owner time to negotiate a possible settlement. If negotiations fail or the contractor refuses to respond within four months, you can then file the lien. You then have six months to enforce the lien by filing a lawsuit. The six-month clock starts from the date the job was completed or when you finished providing your subcontractor services, whichever is later.
Legal help when your business needs it
Most subcontractors in the Lakewood area cannot afford to do business without compensation. An attorney who practices real estate law can help you work to get paid under the terms of the contract.