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 the Trust Fund Statute, C.R.S. 38-22-127, it appears that the dismissal of the foreclosure action prevented the plaintiffs from being successful in their claims for damages against the bond because of the lack of filing a lis pendens.
In the 2011 session of the Colorado Legislature, S-264 was introduces to clarify the requirement of a lis pendens. Specifically, the bill modified the statutes to clarify that when a release bond is approved by the court, the lis pendens is to be released along with the mechanic’s lien, and a claim on the bond is to be substituted for the foreclosure action.
The bill was passed by the Legislature in June of 2011. Accordingly, going forward, if a release bond is approved by the court, its effect is that no lis pendens is required, and if already recorded, must be released, along with the mechanic’s lien on the property.