Colorado Mechanics Liens – when should contractor file a release?

Posted by: Apr 06, 2014By Brian Stutheit

Contractors, who have been paid, should formally release their lien. You do not want a property owner suing you to have the lien released for two reasons. First, the lien has no longer has value to you, but may continue to impair the owner’s title, making it hard for the owner to refinance or sell. This could be enough reason for an owner to sue for release of the lien. Second, if a property owner successfully sues for release of the lien, a contractor runs the risk of being ordered to pay court costs and sometimes even attorney fees.

A contractor who has not been paid, but who has a legitimate lien, has no legal obligation to file a release or waiver of a filed lien. A lien continues to have value, even though the time has passed to bring a lien foreclosure lawsuit, because it continues to affect property title. A lien lawsuit must be filed within six months of last work done on the improvement by anyone, or completion of the structure, whichever is later.