Whether you’re a general contractor (GC), subcontractor, or property owner, understanding Colorado lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party’s right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let’s dive into the world of Colorado lien waivers!
(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
Just as in 38 other states, Colorado lien waivers are largely unregulated. No specific laws govern the type of lien waiver form that must be used or when they should be exchanged. This can lead to confusion between parties and a lack of clarity around general contractors’, suppliers’, and subcontractors’ lien rights.
Another important point to note: Colorado law doesn’t include any statutes that prohibit waiving lien rights in the contract or prior to payment. This can effectively limit subcontractors’ ability to get paid fairly for their construction work. For this reason, construction businesses operating in Colorado should carefully review any lien waivers and contract terms. If you encounter clauses that would nullify your lien rights, negotiate for their removal.
Additional key details for handling lien waivers in Colorado:
- Colorado lien waivers are deemed valid if they clearly express the intent to waive lien rights and contain the following: “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.”
- Colorado is one of two states (the other being Nebraska) that allows advance lien waivers or waiving lien rights in a contract prior to work beginning on a project. This is known as a “no-lien clause.”
Colorado doesn’t require a specific or statutory form for lien waivers.
Colorado accepts both conditional and unconditional lien waivers.
Colorado accepts both conditional and unconditional lien waivers.
To be considered valid in Colorado, a lien waiver must:
- be in writing
- be signed by the waiving party (third-party signatures on the claimant’s behalf are not allowed)
- outline the intention to waive lien rights
- clearly state the amount being waived and the property to which it applies
contain the following: “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.”
Colorado is one of two states that allows for advance lien waivers, or waiving rights in the contract before a job starts.
Colorado does not prohibit waiving lien rights prior to payment in any statutory provisions.
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers—individually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
No, Colorado doesn’t require a specific or statutory lien waiver form. It’s up to you to carefully review the lien waiver and contract and remove anything unsavory, like no-lien clauses, to ensure compliance.
Lien waivers in Colorado are considered valid when they:
- Clearly state the amount being waived and the property to which they apply;
- Demonstrate the intention to waive lien rights;
- Include the following: “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;” and
- Are signed by the party waiving their lien rights (no third-party signatures allowed).
Colorado statutes don’t specify when lien waivers should be exchanged. Determine the timing based on general construction practices or contract terms. Waivers can be exchanged with payment applications (conditional lien waivers) or upon receipt of payment (unconditional lien waivers). Conditional lien waivers are viewed as the safer option in Colorado.
Advance lien waivers are allowed here, which means lien rights can be waived before the project even begins. We recommend removing all no-lien clauses in favor of other options that protect your lien rights.
For more information on which lien waivers to use and when, check out this comprehensive guide.
Lien waiver provisions, no matter how punitive to the subcontractor, can be added to the contract in Colorado. In fact, it’s perfectly legal here to waive lien rights in the contract before work has even begun. This is known as a “no-lien clause,” something that only Colorado and Nebraska allow. We don’t recommend agreeing to this, as it essentially eliminates your lien rights.
Additionally, pay-if-paid clauses are valid here, which means the general contractor only needs to pay subcontractors if they are paid by the property owner. (We recommend subs negotiate for their removal in favor of a pay-when-paid clause instead.)
If there is a dispute over your Colorado lien waiver, start by carefully reviewing the lien waiver itself and the corresponding contract. Lien waivers in Colorado are only valid if they clearly lay out the intention to waive lien rights and include specific legal language. If represented, these elements may protect subs in case of a dispute.
If the dispute cannot be resolved directly, consider consulting with a construction law attorney familiar with Colorado lien laws.
Even though lien waivers in Colorado are largely unregulated, it’s important to get all the details squared away before doing business in the state. Here are some resources to familiarize yourself with:
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients—without ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who’s received the form, who’s opened it, and who has (or hasn’t) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.