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What's a mechanic's lien?

A mechanic's lien usually applies to real estate construction projects, and they rarely have to do with an actual mechanic. These liens are placed on the value of a Colorado property, when the property owner fails to pay a contractor for specific work that was completed.

Imagine a contractor involved in a large building project. Perhaps it's a construction company that installed all of the windows on the property. The problem is that after the construction company bought all the supplies and performed the labor required to do the installation, the company didn't get paid per the contract. In this circumstance, the unpaid contracting company may file legal paperwork to place a mechanic's lien on the value of the property. Essentially, the property may not be sold without the contractor getting part of the proceeds. In some cases, the contractor owed money could even force the liquidation of the property in order to get paid.

Mechanic's liens get particularly complicated when a homeowner pays the general contractor for work completed but the general contractor does not pay the subcontractor. If the subcontractor files a mechanic's lien on your property, it could result in you needing to pay the subcontractor -- essentially paying for the work twice -- or being forced to sell your home.

If you are a contractor or subcontractor that hasn't been paid for work performed, or if you are a property owner facing the threat of a mechanic's lien, you may need help from a Colorado real estate lawyer. A lawyer can help you pursue a mechanic's lien and/or defend against a mechanic's lien in a legally appropriate manner given the circumstances.

Source: FindLaw, "Understanding Mechanic's Liens," accessed July 26, 2017

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