Colorado notice of lien law, the words the permit office is supposed to mail

This one is not your duty, and that is the first thing to get right

Every other notice on this site is a duty somebody owes on a deadline. This one is not. Subsection (1) says that upon issuing a building permit for the improvement, restoration, remodeling, or repair of or the construction of improvements or additions to residential property, the agency or other authority issuing the permit shall send a written notice, as set forth in subsection (2) of this section, by first-class mail addressed to the property for which the permit was issued. The contractor is named in the notice. The contractor is not the one sending it.

Subsection (7) gives the agency a second route. The agency or other authority which issues building permits may deliver the notice required by this section personally to the owner of the property, in lieu of mailing the notice. Mailed to the property or handed to the owner, either way it is the agency doing it.

Subsection (5) is the small practical detail that explains why the duty sits where it does. To offset the cost of issuing the notice required by this section, the appropriate authority may raise the fee for a building permit by one dollar. The legislature paid for this notice out of the permit fee, which is a fair sign of who it expected to be licking the envelope.

So why print it at all

Because the mailing is addressed to the property, not to the owner, and on a remodel the owner is often not the person collecting that day's post. Because some permit offices do it and some do not, and subsection (6) means nobody ever finds out which. And because the notice is written to the owner about you, so an owner reading it for the first time in month three, with a supplier's lien already recorded, is an owner who is about to be much harder to work with.

Handing it over at signing costs one page. It says the thing you would otherwise have to explain from memory, in the legislature's words rather than yours, which is a better place to be standing. It is also the cheapest possible way to raise lien waivers with an owner who has never heard of them.

There is no rule about when to give it, because you are not the one the rule is addressed to. Signing day is the sensible moment. Attaching it to the contract is sensible too.

Ten point bold, or capital letters if it is typed

Subsection (2) prescribes the face and the size before it prints a word of the notice. The notice shall be in at least ten-point bold-faced type, if printed, or in capital letters, if typewritten, shall identify the contractor by name and address, and shall state substantially as follows.

The sheet here is printed, so it takes the printed branch: at least ten point, and bold. The notice is also written entirely in capitals in the statute, which is the typewritten branch showing through, and it is reproduced that way because that is how the legislature set it.

Minnesota asks for ten point bold on its equivalent notice and Wisconsin asks for eight, which is worth knowing if you work across state lines and are tempted to reuse one sheet for all three. They are not the same notice and they do not carry the same words.

The two rules at the top are not the statute's, and here is why they are there

Subsection (2) requires the notice to identify the contractor by name and address. Then it prints the notice and the notice says nothing about a contractor name, draws no rule for one and leaves no space for one. The requirement is real and the layout for it does not exist.

So the sheet draws it: two rules above the wording, captioned Contractor and Contractor address. They are the only thing on this page that did not come out of the statute, and they are marked here rather than left for you to discover. Everything below them is sliced out of the statutory text byte for byte.

If you paste the wording into your own contract instead, carry the same requirement across. The contractor name and address have to appear with the notice, in ten point bold or in capitals, wherever it ends up.

The affirmative defense the notice promises, and the limit the notice does not mention

The first paragraph tells the owner that if you or some person acting on your behalf has paid your contractor and satisfied your legal obligations, you have an affirmative defense. It cites two sections for that: 38-22-102(3.5) and 38-22-113(4). Both are worth reading before you rely on the sentence, because both are narrower than it sounds.

C.R.S. 38-22-102(3.5) makes it an affirmative defense that the owner has paid an amount sufficient to satisfy the contractual and legal obligations of the owner, including the initial purchase price or contract amount plus any additions or change orders, to the principal contractor or any subcontractor for the purpose of payment to the subcontractors or suppliers. Then it adds the limit: only when the property is an existing single-family dwelling unit, or a residence constructed by or for the owner before it was occupied as the owner's primary residence, or a single-family owner-occupied dwelling unit.

C.R.S. 38-22-113(4) says the same thing from the other end, at the hearing, in the foreclosure action itself, with the same three property types attached. So the defense is a single-family owner-occupied defense. A duplex, a fourplex, a rental, a second home: the notice's promise does not reach them, and the notice never says so.

When the permit office does not have to send it

Subsection (3) carries the exceptions and there are two. The notice prescribed by this section shall not be required when a building permit is issued for new residential construction or for residential property containing more than four living units.

Subsection (4) defines both of those. New residential construction means the construction or addition of living units on real property that was previously unimproved or was used for nonresidential purposes. Residential property means any real property, including improvements, containing living units used for human habitation.

Read them together and the section is aimed squarely at remodels and repairs on existing homes. A ground up build gets nothing, an apartment building gets nothing, and commercial work is outside the definition of residential property altogether. Which lines up with the affirmative defense the notice is pointing at, since that defense only exists for single-family owner-occupied property in the first place.

The deadlines this notice does not give you

Nothing in 38-22-105.5 starts a clock for a lien claimant. The clocks are in C.R.S. 38-22-109 and they are short. A lien statement for labor and work by the day or piece, without furnishing laborers or materials, must be filed after the last labor and before the expiration of two months after completion of the building, structure or other improvement. Every other lien claimant files before the expiration of four months after the day the last labor is performed or the last laborers or materials are furnished.

Before that comes the step most Colorado claimants miss. Subsection (3) says that in order to preserve any lien, there must be a notice of intent to file a lien statement served upon the owner or reputed owner and the principal or prime contractor at least ten days before the time of filing the lien statement, by personal service or by registered or certified mail, return receipt requested. Ten clear days, and no statement filed without them.

That subsection prescribes what the notice of intent must contain and never prints the wording, which is why there is no notice of intent form on this site. The lane rule here is that a form nobody wrote down does not get published as though somebody had.

The other Colorado notice worth knowing about, the one aimed at the bank

C.R.S. 38-22-126 is the disburser section and it is the notice with real money behind it. A disburser is any lender who has agreed to make a loan whose proceeds are paid out as work progresses, or any person who receives funds from a lender, contractor or owner to disburse the same way.

Subsection (4) lets any lien claimant entitled to a lien give notice to the disburser stating the property, the claimant's name, address and telephone number, the person the claimant contracted with, and a general statement of the contract. Subsection (5) requires it in writing, served by certified mail or delivered personally or left at the disburser's residence or place of business.

Subsection (6) is why it matters. Once that notice is received, the disburser must ascertain the amount due to the claimant on any disbursement date and pay it directly to the claimant out of undisbursed funds. Subsection (7) makes the disburser liable to the claimant for what it should have paid if it fails and the claimant suffers loss. Like the notice of intent, 38-22-126 says what the notice must contain and never prints the words, so there is no sheet for it here.

Questions people ask

Once the job is running and you are getting paid on it, the paperwork that comes next is the waiver: see the Colorado statutory lien waiver forms, and conditional vs unconditional lien waiver for which of the two to sign.