Colorado Notice Requirements

Owner's Written Notice — 5-Day Remedy to Remove Property Interest (Owner's Protection)

Colorado law provides a remedy for property owners to protect their property interest from mechanic liens. The owner may provide written notice within 5 days of a notice to remove the property interest from being subject to mechanic liens.

This owner's remedy is an affirmative defense available to owners who pay a higher-tier party on certain residential projects of up to 4 units. It is designed to protect homeowners who have already paid for work but face mechanic lien claims from lower-tier subcontractors or suppliers.

Notice of Intent to File Mechanic Lien Statement — 10-Day Pre-Filing Notice (§38-22-109(3))

Before recording a mechanic lien statement, the claimant must provide a written Notice of Intent to File a Mechanic Lien to the owner and general contractor at least 10 days prior to recording the mechanic lien statement. C.R.S. §38-22-109(3).

This notice must be served by personal service, registered mail, or certified mail with return receipt requested. This is a mandatory prerequisite — failure to provide this 10-day advance notice before recording the mechanic lien may render the mechanic lien defective.

Verified Notice to Disburse Direct (§38-22-126)

A Verified Notice to Disburse Direct is sent to the party disbursing funds as long as funds remain to be paid on the project. This notice has significant legal effect — it notifies the disburser that complete payment to the general contractor will not be a valid defense to a mechanic lien.

This notice effectively puts the disbursing party on notice that the claimant has an interest in the project funds and that paying the general contractor in full does not discharge potential mechanic lien liability.

Disburser's Notice

A Disburser's Notice is sent to the party disbursing funds at the time of shipment. Unlike the Notice to Disburse Direct, this notice has no legal effect — it is simply a notification that the subcontractor or supplier is working on a stated project.

While the Disburser's Notice carries no legal force, it can serve a practical purpose by alerting the fund disburser to the claimant's involvement in the project.

Trust Fund Protections

Colorado imposes a trust fund obligation on all funds disbursed to any contractor or subcontractor. This means that construction funds received by a contractor or subcontractor are held in trust for the benefit of those who performed work or furnished materials on the project.

A mechanic lien claimant may serve a permissive written notice to the disbursing agent (owner, lender, or other disburser of construction funds, excluding the principal contractor) providing notice of intended performance and the estimated amount due for the work.

Public Works — No Preliminary Notice Required

On public works projects in Colorado, no preliminary notice is required from contractors, subcontractors, materialmen, or laborers to preserve payment bond claim rights under C.R.S. §38-26-101 et seq.

For claims against unexpended funds under C.R.S. §38-26-107, the claimant must file a Verified Statement of Amount Due/Mechanic Lien on Funds with the owner or public authority at any time up to final settlement of the project.

Sub-Materialmen — No Mechanic Lien Rights

Under Colorado law, sub-materialmen (suppliers to suppliers) are not entitled to a mechanics' mechanic lien. Only those who directly perform labor or furnish materials used in construction have mechanic lien rights.