Colorado § 38-22-119 - Agreement to waive - effect.

§ 38-22-119. Agreement to waive - effect.

(1) No agreement to waive, abandon, or refrain from enforcing any lien provided for by this article shall be binding except as between the parties to such contract. The provisions of this article shall receive a liberal construction in all cases.

(2) An agreement to waive lien rights shall contain a statement, by the person waiving lien rights, providing in substance that all debts owed to any third party by the person waiving the lien rights and relating to the goods or services covered by the waiver of lien rights have been paid or will be timely paid.

Source: L. 1899: p. 276, § 19. R.S. 08: § 4043. C.L. § 6460. CSA: C. 101, § 33. CRS 53: § 86-3-19. C.R.S. 1963: § 86-3-19. L. 2009: Entire section amended, (SB 09-137), ch. 145, p. 610, § 2, effective July 1.

ANNOTATION

Law reviews. For article, "Assemblage, Design and Construction for Real Estate Developments", see 11 Colo. Law. 2297 (1982).

That this article shall be liberally construed means that it is to be construed according to equitable principles. Buerger Inv. Co. v. Salzer Lumber Co., 77 Colo. 401, 237 P. 162 (1925).

Mechanic's lien may be waived by the express agreement of a party in whose favor it exists. Bishop v. Moore, 137 Colo. 263, 323 P.2d 897 (1958).

A waiver of any lien established pursuant to this article is effective only if the party in whose favor the lien exists expressly agrees to such a waiver. Gen. Growth Dev. v. A & P Steel, Inc., 678 F. Supp. 243 (D. Colo. 1988).

Doubt in language resolved against waiver. Where the terms of a contract, or the evidence offered in support of an alleged waiver of the right to claim a lien are ambiguous, the doubt must be resolved against the waiver. Bishop v. Moore, 137 Colo. 263, 323 P.2d 897 (1958).

Clauses of contracts, purporting to prohibit the contractor from asserting a statutory right of lien, should be strictly construed; if language used is of doubtful import, it should be construed in favor of the lien. Aste v. Wilson, 14 Colo. App. 323, 59 P. 846 (1900).

Lien waiver enforceable if consideration or estoppel is shown. The right to a mechanic's lien can be waived in this state; however, if the waiver is to be enforceable, consideration for lien waivers or an estoppel is required. Woodcrest Homes, Inc. v. First Nat'l Bank, 11 B.R. 342 (Bankr. D. Colo.), aff'd in part, rev'd on other grounds, 15 B.R. 886 (D. Colo. 1981).

Consideration sufficient to support waiver. The voluntary agreement of a lender to continue financing a financially troubled joint venture is adequate consideration to support lien waivers executed by a joint venturer who had supplied materials. Woodcrest Homes, Inc. v. First Nat'l Bank, 11 B.R. 342 (Bankr. D. Colo.), aff'd in part, rev'd on other grounds, 15 B.R. 886 (D. Colo. 1981).

Estoppel sufficient to support waiver. Where a subcontractor advised an owner in writing that he had been paid in full and the owner proceeded to disburse funds to the contractor in reliance upon the representation, the waiver is enforceable without finding specific consideration. Woodcrest Homes, Inc. v. First Nat'l Bank, 11 B.R. 342 (Bankr. D. Colo.), aff'd in part, rev'd on other grounds, 15 B.R. 886 (D. Colo. 1981).

When owner unable to assert invalidity of waiver provision. Where there is an entire failure to file with the county recorder such a contract as is provided for in § 38-22-101, the owner is not in a position to assert the invalidity of the waiver provision of this section. Armour & Co. v. McPhee & McGinnity Co., 85 Colo. 262, 275 P. 12 (1929).

Applied in Gutshall v. Kornaley, 38 Colo. 195, 88 P. 158 (1906); Miller v. Davis, 26 Colo. App. 483, 145 P. 714 (1914).