Does the lien requirement for a written contract apply in Colorado?
Full Question:
Answer:
The right to be furnished with receipts is typically created by contract.
The following is a portion of a CO statute:
All such contracts shall be in writing when the amount to be paid thereunder exceeds five hundred dollars, and shall be subscribed by the parties thereto. The contract, or a memorandum thereof, setting forth the names of all the parties to the contract, a description of the property to be affected thereby, together with a statement of the general character of the work to be done, the estimated total amount to be paid thereunder, together with the times or stages of the work for making payments, shall be filed by the owner or reputed owner, in the office of the county clerk and recorder of the county where the property, or the principal portion thereof, is situated before the work is commenced under and in accordance with the terms of the contract. In case such contract, or a memorandum thereof, is not so filed, the labor done and materials furnished by all persons shall be deemed to have been done and furnished at the personal instance of the owner, and such persons shall have a lien for the value thereof.
The below annotations follow the above statute:
Where the plaintiff furnished materials to contractor for a building, and there was neither a contract nor memorandum, the materials were deemed to have been furnished at the instance of the owner of the building to be improved, and the plaintiff is entitled to lien. Monks v. Searle, 118 Colo. 493, 197 P.2d 158 (1948).
Establishment that indebtedness exists in claimant's favor required. A prime requisite to the establishment of a valid mechanic's lien is that an indebtedness exist in favor of a claimant for labor or materials, and where labor performed or materials furnished are in breach of a contract and so unsatisfactory as to require that either or both be redone at equal or greater expense to a property owner, they are without value and do not constitute an indebtedness. Bishop v. Moore, 137 Colo. 263, 323 P.2d 897 (1958); Bushman Constr. Co. v. Air Force Academy Hous., Inc., 327 F.2d 481 (10th Cir. 1964).
A prime requisite to the establishment of a valid lien is that an indebtedness exists in favor of the claimant for labor or materials. Sperry & Mock, Inc. v. Security Sav. & Loan Ass'n, 37 Colo. App. 357, 549 P.2d 412 (1976).
Where owner receives nothing of value subcontractor lacks right to lien. Where the owner receives nothing of value, a subcontractor has no right to a mechanic's lien, and this is so although he might not be responsible for the conditions resulting in the defective performance. Bishop v. Moore, 137 Colo. 263, 323 P.2d 897 (1958); Brannan Sand & Gravel Co. v. Santa Fe Land & Imp. Co., 138 Colo. 314, 332 P.2d 892 (1958).
