- J. Scott Sweeney
What if a contractor files a lien on my property?
Updated: Nov 7, 2022
In Colorado, contractors, subcontractors, engineers, architects, and others involved in a construction project can file a "mechanic's lien" on your property. This is a tool to help contractors get paid when they add value to a home. This can be a problem when the homeowner and the contractor disagree on whether the contractor added value or whether contractor has just left you with their defective construction to now deal with.
A mechanic's lien is essentially just a document that is "recorded" (filed) with the county's official records and is usually posted on a county's website. Contractors don't need a lawyer to record a lien or draft the lien, so it is done incorrectly and/or filed untimely as opposed to many legal documents.
A lien functions as a notice that the property is "encumbered" by an unpaid debt. Theoretically, a contractor can then "foreclose" on the property to satisfy the debt. The foreclosure process isn't something that happens overnight and/or just because a contractor says you owe him or her money. The foreclosure process requires a lawsuit and is very expensive for a contractor because in most cases they would need to hire a lawyer to prosecute their case in court. Lawsuits usually take at least a year to resolve, but it depends on your case.
Until the lien is resolved by way of settlement and/or trial (or expires), a lien usually won't impact your life and/or property. However, a lien will cause you tremendous problems in the short term if you happen to be trying refinance or sell your home, as well as other circumstances.
There are many requirements that a contractor must satisfy and there are many defenses that exist for a homeowner to stop a foreclosure. If a contractor files a lien on your property, you should take it very seriously and have an attorney review the issue and provide you with advice.