A Modest Proposal for Change

Construction people and lawyers who become involved in mechanic's lien problems frequently criticize Colorado's lien laws. One construction-related trade group or another always appears to be at the legislative doorstep seeking statutory changes.

What these people fail to appreciate is the fact that Colorado's mechanic's lien laws are generally understandable and workable. Any change could make them worse rather than better. There is, however, one small change to the laws which would benefit everyone concerned. This change would require that anyone furnishing labor, services, or materials to be used in construction who does not have a direct contract with the property owner be required to give written notice to the owner and general contractor that he is supplying lienable labor, services, materials or other items for a particular project.

The effect of this notice would permit the owner and contractor to protect against liens of unknown parties. The penalty for failing to give that notice within a fixed number of days after the potential lien claimant be comes involved in the project would be the denial of his right to recover on a lien claim. In making payments or disbursement, the owner or general contractor would need only to examine their notice files to identify the possible lien claimants and satisfy themselves that those business concerns or individuals have been paid and have waived or released their lien claims.

The statutory revisions necessary to accomplish this change should be in simple language and may be borrowed from other states, notably California, which have adopted prior-notice requirements. The notice itself might be just a simple statement that labor, materials or services are being furnished for an identified project by a named individual or company. Certified return receipt mailing to both the owner and general contractor should be required.

Perhaps it would be well to amend statutory provisions relating to the notice of intent, requiring that the affidavit of service of the notice of intent be expanded to include the prior-notice requirement. Any industry group lobbying or suggesting legislative changes should be fully aware of legislative attitudes toward mechanic's liens in general and know about other laws under consideration by the legislature affecting mechanic's lien rights. The modest change suggested would create no undue hardship on potential lien claimants and would provide excellent protection for owners and general contractors against liens of claimants whose work or materials on a particular job might have otherwise remained a mystery until too late. If the owner and general contractor know of the existence of all potential lien claimants, those people are more likely to be paid sooner and mechanic's lien claims may therefore be avoided.