Contracts between subcontractors and suppliers in Denver are often entered into with general contractors, who then contract with the property owner to complete a construction project. All these parties have a stake in the work being done per the terms of the contract. Therefore, if a subcontractor or supplier is not paid per the terms of the contract, they may pursue a mechanic’s lien.
Mechanic’s liens are a tool available to subcontractors and suppliers who have not been paid what they are due. These liens constitute a legal claim against the property that the subcontractors have worked on or suppliers have contributed to. It is important to understand that, even if the property owner paid the general contractor what they were supposed to under the contract, if the general contractor does not then pay the subcontractor or supplier what they are due per the terms of the contract, the subcontractor or supplier can pursue a mechanic’s lien on the property.
There are certain steps that must be followed to obtain a mechanic’s lien. First, the aggrieved party must have given the property owner notice of what they are contributing to the project within a certain amount of time. Then, if they aren’t compensated, a “claim of mechanic’s lien” needs to be filed. After that, the aggrieved party has a certain amount of time, usually several months, to either work with the property owner to come to an agreement on how to resolve the issue or to file a legal claim.
Mechanic’s liens can be an alternative to help a subcontractor or supplier who hasn’t been paid work with the property owner to reach a resolution to this issue without necessarily having to file a full-fledged lawsuit. However, it is important that any contracts entered into by subcontractors, suppliers, general contractors and property owners are as airtight as possible in the first place. When all parties understand their contractual obligations, it can help avoid the need for litigation, especially if alternative dispute resolution processes are available.