The Waters are a Bit Muddier with the Ferguson Decision on Mechanic’s Liens Relating Back to First Work

In the recent case of Ferguson Enterprises, Inc. v. Keybuild Solutions, Inc., Case No. 10CA2234, December 22, 2011, the Colorado Court of Appeals addressed a situation regarding the priority of mechanic’s liens.
 
Backround Summary

To understand the situation, one must understand that mechanic’s liens for certain improvements to a property such as new construction have priority over other earlier liens or mortgages on the land.  CRS 38-22-103(2).  However, a lien for a construction loan which is taken out to do the improvements […]

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New Legislation Passed into Law Regarding Mechanic’s Liens

In Weize Co., LLC v. Colorado Regional Construction, Inc., No. 09CA1369, the Colorado Court of Appeals held that a plumber’s claim to foreclose on a mechanic’s lien had to be dismissed because of the plumber’s failure to file a lis pendens or notice of commencement of action on the title of the property.  The defendant did provide a lien release bond, and the liens were released.  However, while the supplier to the vendor was apparently successful in establishing violation of […]

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Clarification of Liability Under the Excessive Lien Statute, Contrast to Trust Fund Statute

The Colorado Court of Appeals released its opinion in the matter of JW Construction Co., Inc. v. Elliot, No. 10CA0244 (Colo. Ct. App. March 17, 2011) regarding the construction of a custom home.  Specifically, the homeowners asserted that they found discrepancies in the invoices and pay applications provided by the General Contractor.  When the Contractor refused to provide complete records to support the draw requests, the homeowners terminated the contract and proceeding with the work on their own, paying the […]

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Colorado’s Trust Fund Statute

Colorado Revised Statute 38-22-127 provides that all funds disbursed to any contractor or subcontractor under any building, construction, or remodeling contract shall be held in trust to pay subcontractors, laborers, or material suppliers.  Failure to do so is a violation of the civil theft statute at CRS 18-4-401.  Accordingly, the consequences of violating the statute can be an award of treble damages and attorney fees.

A claim can arise even if the subcontractor, supplier, or labor does not have a proper, […]

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