Colorado mechanics lien law – how long does a lien last?
Many people become confused about the length of time a Colorado mechanics lien affects property.
Colorado mechanics lien lawyer
Brian Stutheit tries to clarify the law and practical effects of a lien in this blog.
A mechanics lien foreclosure lawsuit must be brought within six months after the lien holder’s last work on the property. Any foreclosure lawsuit brought later than that is invalid. Of course, there could be a foreclosure suit filed followed by argument in the court about when was the date of last work. Just because it is too late to sue to foreclose the lien does not mean no lawsuit may be filed. A lawsuit for breach of contract or unjust enrichment may be filed later than six months. But those lawsuits do not allow the creditor to foreclose on the property.
By statute, no lien claimed shall hold the property longer than one year from the filing of such lien, unless within thirty days after each annual anniversary of the filing of said lien statement there is filed in the office of the county clerk and recorder of the county wherein the property is located an affidavit by the person claiming the lien, or by some person in his behalf, stating that the improvements on said property have not been completed. In other words, the law says a lien should not encumber property for more than 13 months after it is recorded.
However, in actuality title companies and lenders follow policies which treat liens as a valid encumbrances for as much as two years after the lien is recorded. The property owner can argue that the lien is stale, but the title company or bank will nevertheless ask that it be taken care of. Title companies and banks are very cautious about paying out money, then finding out later that the mechanics lien is valid and superior to their own mortgage or promissory note. A property owner trying to sell or refinance can expect to have trouble with a recorded mechanics lien for up to two years after the recording date. Property owners should shop title companies or lenders, because they follow different internal policies as to the length of time a lien is considered an problem.