Colorado § 38-22-103 - Attaching of lien - enforcement.

§ 38-22-103. Attaching of lien - enforcement.

(1) The liens granted by this article shall extend to and cover so much of the lands whereon such building, structure, or improvement is made as may be necessary for the convenient use and occupation of such building, structure, or improvement, and the same shall be subject to such liens. In case any such building occupies two or more lots or other subdivisions of land, such several lots or other subdivisions shall be deemed one lot for the purposes of this article, and the same rule shall hold in cases of any other such improvements that are practically indivisible, and shall attach to all machinery and other fixtures used in connection with any such lands, buildings, mills, structures, or improvements.

(2) When the lien is for work done or labor or material furnished for any entire structure, erection, or improvement, such lien shall attach to such building, erection, or improvement for or upon which the work was done, or laborers or materials furnished in preference to any prior lien or encumbrance, or mortgage upon the land upon which the same is erected or put, and any person enforcing such lien may have such building, erection, or improvement sold under execution and the purchaser at any such sale may remove the same within thirty days after such sale.

(3) Any lien provided for by this article shall extend to and embrace any additional or greater interest in any of such property acquired by such owner at any time subsequent to the making of the contract or the commencement of the work upon such structure and before the establishment of such lien by process of law, and shall extend to any assignable, transferable, or conveyable interest of such owner or reputed owner in the land upon which such building, structure, or other improvement is erected or placed.

(4) Whenever any person furnishes any laborers or materials or performs any labor, for the erection, construction, addition to, alteration, or repair of two or more buildings, structures, or other improvements, when they are built and constructed by the same person and under the same contract, it is lawful for the person so furnishing such laborers or materials or performing such labor to divide and apportion the same among the buildings, structures, or other improvements in proportion to the value of the laborers or materials furnished for and the labor performed upon or for each of said buildings, structures, or other improvements and to file with his or her lien claim therefor a statement of the amount so apportioned to each building, structure, or other improvement. This lien claim when so filed may be enforced under the provisions of this article in the same manner as if said laborers or materials had been furnished and labor performed for each of said buildings, structures, or other improvements separately; but if the cost or value of such labor, laborers, or materials cannot be readily and definitely divided and apportioned among the several buildings, structures, or other improvements, then one lien claim may be made, established, and enforced against all such buildings, structures, or other improvements, together with the ground upon which the same may be situated, and in such case for the purposes of this article, all such buildings, structures, and improvements shall be deemed one building, structure, or improvement, and the land on which the same are situated as one tract of land.

Source: L. 1899: p. 265, § 3. R.S. 08: § 4027. C.L. § 6444. CSA: C. 101, § 17. CRS 53: § 86-3-3. C.R.S. 1963: § 86-3-3. L. 2000: (2) and (4) amended, p. 206, § 3, effective August 2.

ANNOTATION

I. General Consideration.

II. Estate or Interest Subject to Lien.

III. Lien on Land Necessary for Building.

IV. Lien on "Entire Structure".

V. Blanket Liens.

VI. Lien on Fixtures.

I. GENERAL CONSIDERATION.

Purposes of mechanics' lien laws. Mechanics' lien laws are designed for the benefit and protection of mechanics and materialmen, and should be construed in favor of lien claimants. Darien v. Hudson, 134 Colo. 213, 302 P.2d 519 (1956); Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).

Section applies to construction of new improvements as distinguished from expansion, repair, and remodeling of existing improvements. Lew Hammer, Inc. v. Dash, Inc., 42 Colo. App. 414, 599 P.2d 948 (1979).

Section does not create a lien separate and distinct from § 38-22-101 but merely defines the scope and extent of such liens. F.M. Hall & Co. v. Sw. Props., 747 P.2d 688 (Colo. App. 1987).

Inception of right to lien arises from estoppel. The inception of a right to a lien under this section, coupled with § 38-22-105, arises from estoppel. Stewart v. Talbott, 58 Colo. 563, 146 P. 771 (1915).

Mechanics' lien is prior lien upon improvement. This section and §§ 38-22-105 and 38-22-106 make a mechanic's lien a prior lien upon the improvement, while an existing mortgage remains a prior lien upon the land. Atkinson v. Colo. Title & Trust Co., 59 Colo. 528, 151 P. 457 (1915); Darien v. Hudson, 134 Colo. 213, 302 P.2d 519 (1956); Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).

Mechanics' liens are not entitled to priority under this section over a pre-existing deed of trust expressly intended to secure a loan for construction if: (1) The deed is recorded prior to attachment of the mechanics' liens and (2) the loan proceeds are used for construction purposes. 1st Choice Bank v. Fisher Mech. Contractors, Inc., 15 P.3d 1100 (Colo. App. 2000).

Mechanics' liens are junior and subordinate to an existing deed of trust on the land occupied by the improved building. Darien v. Hudson, 134 Colo. 213, 302 P.2d 519 (1956).

Mechanic's lien filed to secure payment for labor and materials furnished to remodel an existing structure is subordinate to the lien of a trust deed which was in no manner connected with such remodeling, but was recorded more than two years prior thereto and covered the land and all improvements thereon. Stinnett v. Mod. Homes, 142 Colo. 176, 350 P.2d 197 (1960).

Where a deed of trust was given for a loan with the understanding that the loan was to be used for the construction of a building, and the deed of trust, recorded before work on the building was begun, expressly covered the building to be erected the lien of the deed of trust took priority over mechanics' liens to the extent that the loan was actually applied to payment of labor and materials used in the construction of the building. Joralman v. McPhee, 31 Colo. 26, 71 P. 419 (1903).

When lien not held subordinate to deed of trust. Where a portion of money borrowed and secured by a deed of trust is by agreement to be used in improvement of the property, it is unjust to hold that lien claimants furnishing labor and material for such improvements should be relegated to the position of subordinate lien holders. Darien v. Hudson, 134 Colo. 213, 302 P.2d 519 (1956).

Absent language which clearly indicates an intention to waive a mechanics' lien, it will not be supposed that the laborer or materialman intended to relinquish absolutely his statutory right to claim a lien beyond the amount of consideration received. Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).

Mechanics' liens are an exception to the general rule that priorities under the recording statute are established based on the order in which they are recorded. Mechanics' liens are granted priority over the previously recorded interests in specific circumstances. Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).

Applied in Sayre-Newton Lumber Co. v. Union Bank, 6 Colo. App. 541, 41 P. 844 (1895); State Bank v. Plummer, 54 Colo. 144, 129 P. 819 (1912); Terminal Drilling Co. v. Jones, 84 Colo. 279, 269 P. 894 (1928); In re Ben Boldt, Jr., Floral Co., 37 F.2d 499 (10th Cir. 1930); Jones v. Mawson-Peterson Lumber Co., 112 Colo. 493, 150 P.2d 795 (1944); Trustees of Mtg. Trust of Am. v. District Court, 621 P.2d 310 (Colo. 1980); Climax Molybdenum Co. v. Specialized Installers, Inc., 12 B.R. 546 (D. Colo. 1981).

II. ESTATE OR INTEREST SUBJECT TO LIEN.

Section gives lien upon whatever interest owner had when work was begun, and to another or greater interest whenever acquired before the lien is enforced. Home Pub. Mkt. Co. v. Fallis, 72 Colo. 48, 209 P. 641 (1922); Sontag v. Abbott, 140 Colo. 351, 344 P.2d 961 (1959).

Lien which attaches is not limited to estate in fee, but extends to any interest of the person that is transferable, assignable, or conveyable in the real estate at whose instance and upon which a building, structure, or improvement is erected. Horn v. Clark Hdwe. Co., 54 Colo. 522, 131 P. 405, 45 L.R.A. (n.s.) 100 (1913).

Leasehold interest may be subjected to lien. Cary Hdwe. Co. v. McCarty, 10 Colo. App. 200, 50 P. 744 (1897); Horn v. Clark Hdwe. Co., 54 Colo. 522, 131 P. 405 (1913).

One may be "owner" without legal title. That one who does not have legal title may be the "owner", within the meaning of § 38-22-105, is recognized in subsection (3), which provides that the lien shall extend to any assignable, transferable, or conveyable interest of such owner in the land upon which such building, structure or other improvement shall be erected or placed. Home Pub. Mkt. Co. v. Fallis, 72 Colo. 48, 209 P. 641 (1922); Bankers' Bldg. & Loan Ass'n v. Fleming Bros. Lumber Co., 83 Colo. 335, 264 P. 1087 (1928); Sontag v. Abbott, 140 Colo. 351, 344 P.2d 961 (1959).

Extension of lien to property jointly owned. Whether or not a mechanic's lien may ever be extended to or decreed upon property not embraced in the lien statement, it cannot be extended to and decreed upon such property owned jointly by the owner of the property, included in the statement, and her husband, where no facts were shown to exist which would entitle the lien claimant to a lien upon the husband's interest. Perkins v. Boyd, 16 Colo. App. 266, 65 P. 350 (1901).

Improvement as joint undertaking of lessor and lessee. Where the facts and circumstances disclose that the improvement is the joint undertaking of both the lessor and lessee, the interest in the land of both may be held under the mechanics' lien law for the improvements so made, but in the absence of such proof only the interest of the lessee is liable. Bankers' Bldg. & Loan Ass'n v. Fleming Bros. Lumber Co., 83 Colo. 335, 264 P. 1087 (1928).

When optionee deemed owner of real estate within article's purview. Where the holder of an option to purchase real estate causes building materials to be delivered thereon to thereafter be used in the construction of improvements on the land, and where the option thereafter ripens into fee ownership, the optionee is an owner of real estate within the coverage of this article, and, as such, empowered to impress such a lien upon the real estate to which he directs the delivery of building materials. Sontag v. Abbott, 140 Colo. 351, 344 P.2d 961 (1959).

Liens attach to interest acquired at foreclosure sale. Mechanics' liens attach to the interest acquired by the purchaser at a foreclosure sale through the public trustee's deed. Bankers' Bldg. & Loan Ass'n v. Fleming Bros. Lumber Co., 83 Colo. 335, 264 P. 1087 (1928).

Lien for work done under streets and outside subdivision permitted. A mechanic's lien against an entire subdivision is valid when a portion of the materials supplied and labor performed was on land beneath publicly dedicated streets and outside of the formal boundaries of the subdivision property. Woodcrest Homes, Inc. v. First Nat'l Bank, 15 B.R. 886 (D. Colo. 1981).

III. LIEN ON LAND NECESSARY FOR BUILDING.

Land and building subject to lien. When a vendor requires the construction of a building upon the land contracted to be conveyed, and it is built, the land as well as the building is subject to a lien. Stewart v. Talbott, 58 Colo. 563, 146 P. 771 (1915); Colo. Gold Dredging Co. v. Stearns-Roger Mfg. Co., 60 Colo. 412, 153 P. 765 (1915).

Lien is granted on as much land as is necessary for the use and occupation of the building, that is, all the land which is benefitted and whose value is increased by the improvement. Hess Flume Co. v. La Junta Sub. Land Co., 63 Colo. 236, 166 P. 246 (1917).

Lots need not be contiguous to be liened together. There is no provision that lots must be contiguous, nor any requirement, except that there must be one contract for all the lots and that the lien must be such as not to be readily and definitely apportioned, because it is the entirety of the contract, not of the lands, that determines the right. Buerger Inv. Co. v. B.F. Salzer Lumber Co., 77 Colo. 401, 237 P. 162 (1925).

Quantity of land necessary for convenient use presumable. Although the lienor is only entitled to the quantity of land necessary for the convenient use and occupancy of the buildings erected, it will be presumed that, in the absence of pleading or proof to the contrary, when the complaint described the land by legal subdivisions and avers that the buildings were erected thereon, the land described is necessary for the convenient use and occupancy of the buildings. Seely v. Neill, 37 Colo. 198, 86 P. 334 (1906).

IV. LIEN ON "ENTIRE STRUCTURE".

Construction of "for any entire structure". The phrase, "for any entire structure", in subsection (2), is not used to designate a completed from an uncompleted building, but to distinguish new structures not before existing, from betterments, repairs, improvements, and the like on previously constructed or existing improvements. Atkinson v. Colo. Title & Trust Co., 59 Colo. 528, 151 P. 457 (1915); Stinnett v. Modern Homes, 142 Colo. 176, 350 P.2d 197 (1960); Powder Mtn. Painting v. Peregrine Joint Venture, 899 P.2d 279 (Colo. App. 1994).

Word "entire", found in subsection (2), is not to be limited to those cases where the lienor may have contracted for or put up the whole structure. Church v. Smithea, 4 Colo. App. 175, 35 P. 267 (1893).

Structure lienable even if never completed. Labor performed and material furnished for an entire structure gives a lien upon such structure, though it is never completed. Atkinson v. Colo. Title & Trust Co., 59 Colo. 528, 151 P. 457 (1915).

Lien on entire structure superior to prior executed deed of trust. The lien of a mechanic for work done in the construction of an entire building on unimproved property is, as to the structure, superior to that of a deed of trust executed prior to the performance of the work. Church v. Smithea, 4 Colo. App. 175, 35 P. 267 (1893).

Lienors' rights where entire structure placed on property subject to prior encumbrance. Where an entire structure is put on the property subject to a prior encumbrance, this section gives the contractor or the lienors, separately or conjointly, the privilege to assert their rights against the newly erected building, and the prior encumbrancer loses nothing to which his security has affixed itself, nor does the lienor get anything beyond that which he may have put on the land. Church v. Smithea, 4 Colo. App. 175, 35 P. 267 (1893).

Enforcement of lien where improvement consists of walls and foundations. In enforcing the lien on an improvement where the improvement consists of basement walls and foundations which cannot be removed and continue to retain any value, this article does not contemplate a course that will destroy the value of the improvement; the only way the improvement can be effectively reached to satisfy the lien against it is to sell the entire property as a whole and pursue some equitable course with the fund realized from the sale which will afford the greatest protection to the rights of all the parties. Atkinson v. Colo. Title & Trust Co., 59 Colo. 528, 151 P. 457 (1915).

Landscaping may constitute expansion of existing improvement. Where landscaping is added to land upon which other improvements have already been erected, the landscaping constitutes the expansion of an existing improvement. Lew Hammer, Inc. v. Dash, Inc., 42 Colo. App. 414, 599 P.2d 948 (1979).

Lien filed against entire project for partial work deemed proper. Where the work is done as a part of an entire project, and could not be readily and definitely divided, it is proper to file a lien against the entire project. Plateau Supply Co. v. Bison Meadows Corp., 31 Colo. App. 205, 500 P.2d 162 (1972).

Allegation or proof of portion of road upon which material used unnecessary. Since subsection (3) gives a lien upon the entire structure for which work or materials are furnished, hence it is unnecessary, in proceedings to enforce a lien for materials furnished in the construction of a railroad, for plaintiffs to allege or prove upon what portion of the road the material was used. Barnes v. Colo. Springs & C.C.D. Ry., 42 Colo. 461, 94 P. 570 (1908).

V. BLANKET LIENS.

The term "blanket lien" is commonly used to refer to "a single lien . . . made, established, and enforced against two or more improvements," although the statute does not specify a name for such liens. Brickman Group, Ltd. v. Compass Bank, 83 P.3d 1167 (Colo. App. 2003), aff'd, 107 P.3d 955 (Colo. 2005).

Claimant has choice of apportionment or blanket lien where former cannot readily be made. Buerger Inv. Co. v. B.F. Salzer Lumber Co., 77 Colo. 401, 237 P. 162 (1925).

Lien extends to multiple buildings where treated as one building. Where several buildings are erected upon a tract of land but are all designated for a united enjoyment or common use, they are to be treated as one building in relation to a mechanic's lien claim; thus, although the lien claimant may have performed work on, or furnished materials for, only one of such buildings, his lien extends to the whole. Cary Hdwe. Co. v. McCarty, 10 Colo. App. 200, 50 P. 744 (1897).

When sales to different parties covered by single lien. Where material was sold partly to the owner, and partly to the contractor or agent of the owner, but it appeared sufficiently, however, in evidence that it was sold for one purpose on one contract, on one set of buildings, one lien was permitted. Buerger Inv. Co. v. B.F. Salzer Lumber Co., 77 Colo. 401, 237 P. 162 (1925).

When materialman may file claim on different property as one claim. Where material was furnished for the building of three houses and was used indiscriminately in three buildings, and the houses were built crosswise on four platted lots so that each house occupied part of the four lots without any segregation or division of the lots or description of the land on which the different houses were built, the materialman was not required at his peril to subdivide his claim and assign to each house as built the proportion of the debt which it ought in equity to bear, but might file his entire claim on all the houses and lots as one claim. Sprague Inv. Co. v. Mouat Lumber & Inv. Co., 14 Colo. App. 107, 60 P. 179 (1899).

Lien not invalidated by omission of owner's name in statement for lien. The omission of the name of one owner in a statement for a blanket lien does not invalidate the whole lien. Buerger Inv. Co. v. B.F. Salzer Lumber Co., 77 Colo. 401, 237 P. 162 (1925).

A blanket lien that omits property that benefitted from the mechanics' materials and work is valid against the property that is included in the lien statement. Brickman Group, Ltd. v. Compass Bank, 83 P.3d 1167 (Colo. App. 2003), aff'd, 107 P.3d 955 (Colo. 2005).

Effect of release of part of property covered by blanket lien. The mere release of a part of the property covered by a blanket lien does not effect a release of the remainder. Buerger Inv. Co. v. B.F. Salzer Lumber Co., 77 Colo. 401, 237 P. 162 (1925); Brickman Group, Ltd. v. Compass Bank, 83 P.3d 1167 (Colo. App. 2003), aff'd, 107 P.3d 955 (Colo. 2005).

When amount allowable under lien to be prorated. Where the value of the labor and material can be readily divided and apportioned and the lien is asserted against only a portion of the lienable property, then the amount to be allowed under the lien must be prorated according to the apportionment. Plateau Supply Co. v. Bison Meadows Corp., 31 Colo. App. 205, 500 P.2d 162 (1972).

A trial court's refusal to award pre-sale apportionment of lien, if supported by evidence, must stand. Court did not abuse its discretion in refusing apportionment where trust corporation's request for apportionment was based solely on the relative land holdings of parcel owners and presented no evidence that labor and material provided by lienors could be readily and equitably divided between land owners. Miller, Inc. v. Breckenridge Resort, 779 P.2d 1365 (Colo. App. 1989), aff'd in part, rev'd in part on other grounds sub nom. Indep. Trust v. Stan Miller, Inc., 796 P.2d 483 (Colo. 1990).

VI. LIEN ON FIXTURES.

Fixtures of leasehold estate lienable. A leasehold estate may be the subject of a lien, and logically, it must follow that whatever is a fixture of that estate can be subjected to the same lien. Horn v. Clark Hdwe. Co., 54 Colo. 522, 131 P. 405 (1913).

Article need not be fastened to freehold. It is not now considered as absolutely necessary that an article be actually fastened to the freehold in order to make it a part thereof. Dawson v. Scruggs-Vandervoort Barney Realty Co., 84 Colo. 152, 268 P. 584 (1928).

All-important questions concerning lien of fixtures are the intention of the person who brings the fixture upon the land, the use to which it is to be applied, and its fitness for that use. Dawson v. Scruggs-Vandervoort Barney Realty Co., 84 Colo. 152, 268 P. 584 (1928).

Installation of electric lighting and wiring system lienable. The installation of a complete new electric lighting and wiring system in a hotel building constituted one entire improvement and entitled plaintiff to a lien by virtue of the provisions of this section. Longton v. Husung, 91 Colo. 501, 16 P.2d 423 (1932).

Refrigerator plant connected to building subject to lien. A refrigerating plant, connected to a building by brine pipes and brackets, is part of the freehold, and one furnishing new brine pipes is entitled to a mechanic's lien thereon. Dawson v. Scruggs-Vandervoort Barney Realty Co., 84 Colo. 152, 268 P. 584 (1928).