Thought Leaders: Enforcement of a Perfected Mechanic’s Lien
Construction companies, contractors, suppliers, and laborers that have provided labor and materials to improve real property, but remain unpaid, can follow specific requirements to perfect a mechanic’s lien in Colorado.
With research on the specific requirements to mechanic’s liens, unpaid claimants can perfect their lien with moderately small costs or fees. However, once those statutory requirements are met, there is a relatively short amount of time before the mechanic’s lien must be enforced. In Colorado, an action to enforce the perfected mechanic’s lien must be commenced within 6 months after the last work or labor is performed, and a notice of commencement of such an action must be filed with the county clerk and recorder in the same county that the Statement of Lien was filed.
If the lien claimant fails to file its lawsuit within this 6-month time period, the claimant will be barred from foreclosing or enforcing its mechanic’s lien. While other collection avenues may still be available to the unpaid construction companies, contractors, suppliers, and laborers, their interests will no longer be protected by the property itself.
Because the commencement period for mechanic’s liens is so short, lien claimants often don’t realize the litigation that lies ahead, and how quickly an unpaid invoice can become the center of a contested lawsuit. The foreclosure process of a mechanic’s lien is no small feat and requires knowledge of the legal system to navigate successfully.
When utilizing a mechanic’s lien, it is advisable to keep in mind the enforcement portion of the lien, and consult an attorney experienced in mechanic’s liens as soon as possible for additional counsel on what to expect from commencing a lawsuit to foreclose a mechanic’s lien.
