Chapter 1 - § 1.1 INTRODUCTION

• Jurisdiction: Colorado

§ 1.1 INTRODUCTION

There are many facets to the construction industry involving people with a variety of different skills. All involved must do their job and perform well for a project to be successful. And in the end, all participants want to be paid for their contribution to the project. When payment issues arise on private projects, the Colorado general mechanics' lien statutes¹ provide a valuable and often very effective set of tools to encourage and enforce payment. On state and local public projects, the contractor's bonds and lien on funds statutes² are available to assist subcontractors, material suppliers, and others with the payment process.

The basic supporting concept of mechanics' liens in Colorado (and most other states) is that the contractors, subcontractors, and others involved in the construction of a project that enhance the value of the real property should be paid for their efforts. This concept was well stated by the Colorado Supreme Court in Bishop v. Moore: "The right to a mechanic's lien given by the statute is based upon considerations of natural justice, namely that one who has enhanced the value of property by attaching thereto his materials or labor shall have a lien therefor."³

The Colorado courts have taken a two-step approach to recognizing the right to claim a mechanics' lien. The first is that because there is no common law right to a mechanics' lien, strict compliance with the statutory requirements for perfecting a lien is required. Once this requirement has been met, the courts take a liberal view toward the enforcement of mechanics' liens in support of the equitable principles underlying lien laws and the principles enunciated in Bishop v. Moore, that one who has "enhanced the value of property by attaching thereto his materials or labor shall have a lien therefor." The court in Lindemann v. Belden Consolidated Mining & Milling Co. said:

A mechanic's lien statute should be liberally construed as to the remedial portion of it, but it must be strictly construed in determining the question as to whether the right to a lien exists. Where the inquiry is whether a person asserting a lien or the work for which he claims it, comes within the statutes, or whether the statutory requirements necessary to initiate the lien have been complied with, the statute must be strictly construed.. .The leading idea of mechanics' lien statutes, the basic principle upon which they are founded, the object they seek to subserve, and to which

...