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We missed an owner on our notice of intent. How would this affect our ability to successfully lien the property?

ColoradoNotice of Intent to Lien

Last month, we sent a notice of intent to two owners - one at the job address, and another from county records. We also sent to our customer, the GC. However, we learned now just 3 days after our notice of intent deadline that these owners are previous owners. Today we sent the notice to a third, current (per the county assessor) owner. How could this affect our ability to file and/or enforce a lien for this property?

1 reply

May 8, 2020

Any time a Notice of Intent to Lien doesn't make it to the required parties, it's possible that mechanics lien rights could be lost. However, Colorado's Notice of Intent rules do allow for some flexibility - so things may not be cut and dry, and, pursuing a mechanics lien claim may still be an option. Plus, there are always other recovery options that could lead to payment, too.

Colorado Notices of Intent to Lien must be sent to the "owner or reputed owner"

Accoridng to CRS § 38-22-109 Colorado Notice of Intent to Lien must be sent to the "owner or reputed owner of the property or the owner’s agent..." as well as the project's GC. Obviously, the best way to comply with that is to make sure the notice is sent to the exact right parties. But, there's flexibility there. If the legislature wanted to say that a Notice of Intent could only be served to the owner, it could have said that. Instead, the term "reputed owner" was included - so, there's at least some room for error.

What is a "reputed owner?"

Generally, a "reputed owner" is a party that appears to own and possess the project property. So, if a claimant has attempted to find the true owner and sent notice to the party they believe to be the owner, that party may well be considered a "reputed owner" and the notice could be effective. This would seem especially true when something as official as an assessor's report was used to identify the property owner. While there's been some litigation on this topic in Colorado (namely, Moore Elec. Co. v. Ambassador Builder Corp.), this specific issue hasn't been addressed. In the Moore case, the reputed ownership wasn't supported by a property record, and the party who sent the notice knew who the actual owner was. So, if there was a good faith belief that the reputed owner was the actual owner of the property, and if the property record seemed to support that, then notice to that reputed owner may well be sufficient. And, if that's not a fair case for who should be considered a "reputed owner" - then I'm not sure what would be. Still, it's impossible to know how a court might turn on the issue. What's more - if the recipients, including the GC, knew the notice didn't include the actual owners - then they should have set the record straight at that time.

Bottom line

As mentioned above, it's hard to know how a court might handle a Notice of Intent issue like this one. And, any time the notice rules aren't followed to a T, there's a chance lien rights might be lost. With that being said, even if there is some alleged flaw with the notice that was given, a mechanics lien filing could take place. And, considering the notice was arguably sent to the required parties, and considering the work was actually performed, claims that the lien is fraudulent or spurious would very likely be misguided. There's a difference between fraud and an honest mistake. Ultimately, - if the lien was legally challenged or had to be enforced, there's still a chance the lien might be considered invalid. But, based on the information above, there seems to be a strong argument that notice requirements were followed because notice was timely sent to the reputed owner. That'd seem especially true where the property records hadn't been updated to show the new owner.

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