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Nightmare for new home owners — liens filed against property
Liens are everywhere
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I came across an article this morning published by KOAA that quickly caught my attention. The article 
states that homeowners in Southeast Colorado Springs received a notice of intent to file a lien from the contractor, Avalon Building. The lien claims that the developer, Lorson Ranch, owes money for building streets and installing utilities in the neighborhoods. The article goes on to state ”We’re not liening the homeowner, we’re liening the property and it’s the only way we have to protect our rights to get paid, said Avalon President Dan Herman. In a statement, attorneys for Lorson Ranch say Avalon Building, …has not completed its work on the project and has failed to honor its financial obligations to its subcontractors. The statement goes on to say, “Avalon will not be paid for incomplete or unperformed work.”
Lorson Ranch is a 1400 acre master planned community east of Marksheffel Road at Fontaine Boulevard in Widefield. It was also the location of where ABC’s Extreme 
Makeover completed a home for a child with special needs in 2007.
What is a Mechanics Lien?
Per the definition in Wikipedia: A mechanic’s lien is a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property. The lien exists for both real property and personal property. In the realm of real property, it is called by various names, including, generically, construction lien.
As I was researching this article, I came across an informative article on Kamlet Shepherd’s web site, a Denver law firm which states, “Owners may be surprised that lien claimants need not have a contract or other agreement with the owner of the property to assert the mechanic’s lien claim. Unknown claimants often surface, including surveyors, contract engineers and architects, subcontractors, suppliers and laborers. The only requirement is that the claimant must have added value to the property, by either performing work or supplying materials, at the request of the owner or person in charge of the construction projection.” I think most home owners don’t realize all the different contractors and subcontractors involved in a new subdivision, and most of them have the ability to file a mechanic’s lien if they haven’t been paid. There is also a great article written by Jonathan Goodman on his web site about Mechanics Liens.
What should a Home Owner Do?
A couple of suggestions for property owners who find themselves in this situation.
- They may want to retain legal representation
- They may be covered under their title insurance. They should try to find their title documentation presented at closing, then contact their title company.
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If you enjoyed reading this article, why not Kathy (719-287-1049) KTorline@msn.com
Disclaimer: This post is not intended to be or to provide legal advice. I recommend that you speak to your attorney regarding specifics.
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