For those who prepare their own mechanic’s liens or those who have unwanted mechanic’s liens filed against their projects or their properties, here’s a hint:  A June 4, 2012, Colorado Supreme Court case may make a difference. That case, in responding to a question submitted by the bankruptcy court, answered that a deed of trust (mortgage) that described the property only by its address would not be adequate. In that case, the deed of trust referred to a legal description that was an attached exhibit, but it was recorded in the office of the county clerk and recorder as required—without

Contracts of adhesion have nothing to do with mastic, glue or paste. Instead, they are something that contractors, particularly those who engage in contracting with public entities, should know about. One of the definitions of a contract of adhesion is that it is a contract “ . . . presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the ‘adhering’ party to negotiate more reasonable terms except perhaps on a few particulars.”  The significance of that type of contract is that some of the terms of contracts of adhesion may not be legally enforceable.A recent

Many construction contracts, particularly on public projects, have liquidated damages provisions. Typically, those contracts fix daily amounts of damages for construction completion delays in their bid documents. They are then non-negotiable. However, most American courts do not look favorably upon liquidated damages provisions.  They question whether they are true estimates of costs the owner will incur because of delays in completion or are actually penalties for late completion or are merely incentives for contractors to work quickly. Courts do not like penalties. So they look at liquidated damages contract provisions with careful scrutiny when asked to do so.So how do

Recently, I have had a number of calls from general contractor clients complaining that one or more of their subcontractors have gone broke, leaving a bunch of unpaid suppliers. So what do they do? There are two possible solutions that might work if their owners have personal wealth or the subcontractors are corporations or limited liability companies. It may then be possible to prove (1) that the owners used payments made to their companies for something other than the payments to their suppliers, or (2) that their companies were not properly organized or maintained separate and apart from themselves.The first

These trying economic times require more knowledge and creativity to survive and prosper. With many trade contractors failing, general contractors and owners need to know and take actions that could reduce or eliminate losses when their contractors or subcontractors don’t pay their bills. One of those actions available in Colorado is under the Trust Fund Statute  originally enacted in Colorado in 1973, largely at the behest of this columnist.While most trade contractors do business as corporations or limited liability companies intended to shield their owners against personal liability for their companies’ debts, the Trust Fund Statute may be used to

Careful construction industry people (and others) may want to make the following New Year's resolutions for 2012: • Resolve—to make all reasonable efforts to settle disputes directly with the other party and leave your attorney alone;• Resolve—to carefully document every event that might give rise to a claim or dispute through letters, e-mails and notes of meetings and conversations (that should be written during or immediately after the events) and with photographs, videos, etc.;• Resolve—to consider segregating your e-mail correspondence by job and subject matter to make it accessible if the need arises;• Resolve—to be aware that what you say

In Colorado there are two types of mechanic’s liens, and understanding the difference between them is critical for both owners and contractors. One type provides for mechanic’s lien remedies to those who supply labor, materials, services and other lienable benefits for the improvement of property, under contract with a property owner or the owner’s agent.  We will call that a “Section 101” lien—the section of the Colorado mechanic’s lien statute that creates the remedy. The other lien type arises when construction work is contracted by someone other than the property owner (for example, a tenant) and when the owner fails

Here’s a typical situation in the construction industry: Subcontractor submits a bid, contractor notifies subcontractor that its bid is accepted, contractor sends a subcontract for signature, subcontractor starts work on project but doesn’t sign or return written subcontract agreement.

In Colorado, there are two different types of mechanic’s liens. One type provides for remedies to those who supply labor, materials, services and other lienable benefits for the improvement of property under contract with a property owner or the owner’s agent.  We will call that a “Section 101” lien, 101 being the section of the Colorado mechanic’s lien statute that creates that lien remedy. The other lien type arises when owners of property fail to post or serve notice upon others that their properties will not be liable for mechanic’s liens. Those notices must be given no later than five

Successful parties in lawsuits seeking to recover monies are awarded damages. Most damages are generally intended to compensate parties for losses they have suffered. Typically, therefore, damages are intended to make parties whole, that is, in the same condition they would have been had they not suffered a loss at the hands of a third party. For example, damages would compensate an owner the dollar amounts sufficient to allow the owner to have defective work of a contractor repaired or replaced. In appropriate circumstances, the owner may also recover consequential damages such as loss of rents that would have been