Colorado § 38-22-105 - Property subject to lien - notice.

§ 38-22-105. Property subject to lien - notice.

(1) Any building, mill, manufactory, bridge, ditch, flume, aqueduct, reservoir, tunnel, fence, railroad, wagon road, tramway, and every structure or other improvement mentioned in this article, constructed, altered, added to, removed to, or repaired, either in whole or in part, upon or in any land with the knowledge of the owner or reputed owner of such land, or of any person having or claiming an interest therein, otherwise than under a bona fide prior recorded mortgage, deed of trust, or other encumbrance, or prior lien shall be held to have been erected, constructed, altered, removed, repaired, or done at the instance and request of such owner or person, including landlord or vendor, who by lease or contract has authorized such improvements, but so far only as to subject his interest to a lien therefor as provided in this section.

(2) Such interest so owned or claimed shall be subject to any lien given by the provisions of this article, unless such owner or person within five days after obtaining notice of the erection, construction, alteration, removal, addition, repair, or other improvement, gives notice that his or her interests shall not be subject to any lien for the same by serving a written or printed notice to that effect, personally, upon all persons performing labor or furnishing laborers, materials, machinery, or other fixtures therefor, or within five days after such owner or person has obtained notice of the erection, construction, alteration, removal, addition, repair, or other improvement, or notice of the intended erection, construction, alteration, removal, addition, repair, or other improvement gives such notice by posting and keeping posted a written or printed notice in some conspicuous place upon said land or upon the building or other improvements situate thereon.

(3) This section shall not apply to coowners of unincorporated canals, ditches, flumes, aqueducts, and reservoirs nor to the enforcement of article 23 of this title. The provisions of this section shall not be construed to apply to any owner or person claiming any interest in such property, the interest of whom is subject to a lien pursuant to the provisions of section 38-22-101.

Source: L. 1899: p. 267, § 5. R.S. 08: § 4029. C.L. § 6446. CSA: C. 101, § 19. CRS 53: § 86-3-5. C.R.S. 1963: § 86-3-5. L. 65: p. 851, § 3. L. 2000: (2) amended, p. 207, § 5, effective August 2.

ANNOTATION

I. General Consideration.

II. Improvements Made with Knowledge of Owner.

III. Notice by Owner.

IV. Pleading and Practice.

I. GENERAL CONSIDERATION.

Law reviews. For note, "Uranium Mining Lease", see 27 Rocky Mt. L. Rev. 425 (1955). For article, "Mechanics' Liens Relative to Oil and Gas Operations — Part II", see 34 Dicta 373 (1957). For comment on Lierz v. Cook (cited below), see 30 Rocky Mt. L. Rev. 220 (1958).

Section has no application to improvements made pursuant to contract, direct or indirect, with the owner of the land. Williams v. Uncompahgre Canal Co., 13 Colo. 469, 22 P. 806 (1889); Miller v. Davis, 26 Colo. App. 483, 145 P. 714 (1914); Stapp v. Carb-Ice Corp., 122 Colo. 526, 224 P. 2d 935 (1950).

Section gives lien for improvements not authorized by any contract between the owner and the person at whose instance they are being constructed, when by his seeming acquiescence through silence, it would be inequitable to relieve his property from a lien for such improvements. Fisher v. McPhee & McGinnity Co., 24 Colo. App. 420, 135 P. 132 (1913); Grimm v. Yates, 58 Colo. 268, 145 P. 696 (1914).

A mechanics' lien may attach to property pursuant to this section, though the owner did not contract for the architectural services. Seracuse Lawler & Partners, Inc. v. Copper Mt., 654 P.2d 1328 (Colo. App. 1982).

Equitable ownership sufficient to come within section. It is not necessary that the owner shall have the legal title in order to come within the provisions of this section; equitable ownership is sufficient. Bankers' Bldg. & Loan Ass'n v. Fleming Bros. Lumber Co., 83 Colo. 335, 264 P. 1087 (1928).

One joint tenant may create lien on his own interest in land in favor of a mechanic. Rico Reduction & Mining Co. v. Musgrave, 14 Colo. 79, 23 P. 458 (1890).

Lien claimants not required to investigate tenant's authority. This section does not impose a duty upon lien claimants to investigate the authority of the tenant to contract for improvements. Thirteenth St. Corp. v. A-1 Plumbing & Heating Co., 640 P.2d 1130 (Colo. 1982).

Architect who does not participate in activities enumerated in this section is not authorized to file a lien pursuant to this section. Chambliss/Jenkins Assocs. v. Forster, 650 P.2d 1315 (Colo. App. 1982).

Claimant not charged with another's mistake resulting in noncompletion. The claimant is not to be charged with another's mistake in judgment which results in the noncompletion of the project. Seracuse Lawler & Partners, Inc. v. Copper Mt., 654 P.2d 1328 (Colo. App. 1982).

Colorado's mechanics' lien statute does not impose any personal liability upon a landowner for work done on the property. Personal liability is permitted only if a contract is proved on which a party may recover regardless of the lien statute. DCB Const. v. Cent. City Devel. Co., 940 P.2d 958 (Colo. App. 1996), aff'd on other grounds, 965 P.2d 115 (Colo. 1998).

Applied in O'Byrne v. Stirn, 106 Colo. 167, 103 P.2d 13 (1940); Samett v. Whelan, 147 Colo. 41, 362 P.2d 559 (1961); Denver Decorators, Inc. v. Twin Teepee Lodge, Inc., 163 Colo. 343, 431 P.2d 8 (1967).

II. IMPROVEMENTS MADE WITH KNOWLEDGE OF OWNER.

Purpose of knowledge provision of subsection (1) is to provide a lien for improvements when by the owner's seeming acquiescence through silence it would be inequitable to relieve his property from a lien for such improvements. A-1 Plumbing & Heating Co. v. Thirteenth St. Corp., 44 Colo. App. 13, 616 P.2d 141 (1980), aff'd in part, rev'd on other grounds, 640 P.2d 1130 (Colo. 1982).

"Knowledge" means notice. "Knowledge", as it is used in subsection (1), is virtually synonymous with notice. Thirteenth St. Corp. v. A-1 Plumbing & Heating Co., 640 P.2d 1130 (Colo. 1982).

Landlord need not have actual knowledge of possible lien. Section requires only that landlord have notice that materials or labor are being furnished to provide improvements to his property; he need not have actual knowledge that his interests will be subjected to mechanics' liens. A-1 Plumbing & Heating Co. v. Thirteenth St. Corp., 44 Colo. App. 13, 616 P.2d 141 (1980) aff'd in part, rev'd on other grounds, 640 P.2d 1130 (Colo. 1982).

Owner's knowingly permitting improvement fastens lien. This section fastens the lien on the owner's land by his knowingly permitting the property to be improved. Johnson v. Stover, 71 Colo. 445, 207 P. 595 (1922).

III. NOTICE BY OWNER.

Purpose of the posting provision of subsection (2) is to protect suppliers or laborers who enter upon a job site without knowledge of the owner's nonliability. Uni-Build Corp. v. Colo. Sem., 650 P.2d 1300 (Colo. App. 1982).

Burden of giving notice is on owner. The burden of notifying the lien claimant that the owner's interest will not be subject to a mechanic's lien is on the owner. Thirteenth St. Corp. v. A-1 Plumbing & Heating Co., 640 P.2d 1130 (Colo. 1982).

Section provides for actual or constructive notice at owner's option. Stewart v. Talbott, 58 Colo. 563, 146 P. 771 (1915).

Section does not expressly or impliedly exclude other actual notice which may be given. Stewart v. Talbott, 58 Colo. 563, 146 P. 771 (1915).

Once received, notice effective for entire period of construction. Once a person receives notice, whether it be by personal service or by posting, the notice is effective as to that person for the entire period of construction. Uni-Build Corp. v. Colo. Sem., 650 P.2d 1300 (Colo. App. 1982).

Owner's notice not inconsistent with recording statute. That an owner can give notice that his interest is not to be subjected to a lien is not at all inconsistent with the recording statute, article 35 of this title, under whose provisions the same notice can be given in another way; the two statutes can and should be read together and both permitted to stand. Stewart v. Talbott, 58 Colo. 563, 146 P. 771 (1915).

Vendor may relieve premises of lien by posting notice. The vendor of a mining claim may, by posting the proper notice, relieve the premises of any lien on behalf of those who perform development work under contract with the purchaser. Pike v. Empfield, 21 Colo. App. 161, 120 P. 1054 (1912).

Purchaser at foreclosure sale required to give notice. The purchaser at a foreclosure sale becomes the owner, within the meaning of this section, and when it failed to give the statutory notice after it obtained notice of the improvement, its interest is subject to a mechanic's lien. Bankers' Bldg. & Loan Ass'n v. Fleming Bros. Lumber Co., 83 Colo. 335, 264 P. 1087 (1928).

Purchaser as vendor's agent may be required to post notice. If the contract of sale provides that the purchaser shall post and maintain the notice, he is thereby made the agent of the vendor for this purpose, and his neglect to post the notice is the neglect of the vendor so that the premises are chargeable with the lien. Pike v. Empfield, 21 Colo. App. 161, 120 P. 1054 (1912).

Owner of property leased for oil-well drilling not within section. Where a lease of property authorizes the drilling of an oil well thereon, the owner of the land is not within subsection (2), requiring the giving of notice to prevent liens attaching to his estate occasioned by drilling operations. Terminal Drilling Co. v. Jones, 84 Colo. 279, 269 P. 894 (1928).

Owner not required to post notice where lessee authorized to make improvements. Where a lessee in possession is authorized by the terms of his lease to make alterations or improvements to the leasehold and the same is done by the lien claimant solely at the request of the lessee, no lien will be sustained upon the property of the lessor, and no notice of nonliability need be posted by the property owner. Lierz v. Cook, 136 Colo. 221, 315 P.2d 535 (1957).

Prior lienor not required to give notice. A vendor having a lien for balance due on purchase price is a prior lienor within the meaning of this section, and thus is not required to give notice to a lumber company furnishing materials to the vendee. Baughman v. Foster Lumber Co., 108 Colo. 37, 113 P.2d 423 (1941).

Effect of failure of tenant in common to give required notice. The effect of the failure of a tenant in common to give the notice required by this section is to make a lien for materials furnished prior to a sale of the land superior to her portion of an incumbrance given to secure the purchase price. Seely v. Neill, 37 Colo. 198, 86 P. 334 (1906).

Where estate not chargeable by landowner's failure to give notice. Where work done is such as is authorized by agreement between the landowner and the person at whose instance such work is performed, and is not such as entitles those performing it to a lien, the estate of the landowner does not become chargeable by his failure to give the notice required by this subsection (2). Grimm v. Yates, 58 Colo. 268, 145 P. 696 (1914).

Posting of nonliability notice insufficient to preclude liability under theory of unjust enrichment. F.M. Hall & Co. v. Sw. Props., 747 P.2d 688 (Colo. App. 1987).

Section does not preclude posting of nonliability notice before notice of intended construction is received. F.M. Hall & Co. v. Sw. Props., 747 P.2d 688 (Colo. App. 1987).

Filing a notice of nonliability under Colorado's lien statute, thereby preventing a lien from attaching to an owner's interest in property, does not foreclose a direct claim against a landowner under some contractual theory of liability. DCB Const. v. Cent. City Devel. Co., 940 P.2d 958 (Colo. App. 1996), aff'd on other grounds, 965 P.2d 115 (Colo. 1998).

IV. PLEADING AND PRACTICE.

Section furnishes rule of evidence, by which, in the first instance, the failure of an owner with knowledge to give the notice therein specified raises the presumption that the owner consented that his property be subjected to a lien; to overcome this presumption that the owner consented that his property be subject to a lien, the owner must go forward with evidence to show that he could not reasonably give the notice, or that he had already effectually given actual notice or such constructive notice as would be given by recording a lease with a provision that the lessor's interest should not be subject to a lien. Stewart v. Talbott, 58 Colo. 563, 146 P. 771 (1915).

Subsection (3) constitutes affirmative defense which, in order to be availed of, must be pleaded by defendant. Clark Hdwe. Co. v. Centennial Tunnel Mining Co., 22 Colo. App. 174, 123 P. 322 (1912).

Facts bringing case within section must be specifically alleged. Where the party seeking enforcement of a lien relies upon the failure of the landowner to give the notice required by this section, his complaint must specifically allege facts which bring the case within the terms of this section. Empire Coal Co. v. Rosa, 26 Colo. App. 230, 142 P. 192 (1914).

Allegations and proof required to enforce lien. One seeking to enforce a lien under this section for improvements made, with the knowledge of the owner, must both allege and prove such knowledge and, further must allege and prove that the materials for which the lien is claimed were furnished to be used in the particular improvement in question. Milwaukee Gold Mining Co. v. Tomkins-Cristy Hdwe. Co., 26 Colo. App. 155, 141 P. 527 (1914).

When allegation or proof of owner's failure to give notice unnecessary. Where it was alleged that an improvement was made with the owner's knowledge, it is not necessary to further allege or prove that the owner did not give the notice of nonliability provided for in this section. Fisher v. McPhee & McGinnity Co., 24 Colo. App. 420, 135 P. 132 (1913).

Architect's preliminary work constitutes the commencement of an improvement or a structure. Seracuse Lawler & Partners, Inc. v. Copper Mt., 654 P.2d 1328 (Colo. App. 1982).