Carving out a secure spot in the Colorado construction industry would be a daunting task without the Colorado mechanic's lien on your side. Essentially serving as protective armor, a mechanic's lien ensures you don't miss out on payment for your hard work, regardless of any financial hardship faced by the property owner.
By filing a Colorado mechanic's lien, you're given a security interest in the property equal to the unpaid amount. This places you on an even keel with other creditors, ensuring they cannot simply claim the assets owed to you.
For example, under U.S. law, the Federal Tax Lien Act of 1966 establishes that mechanic's liens have preference over federal tax liens. This means if a business is going bankrupt and owes the IRS, your Colorado mechanic's lien could take precedence over a federal tax lien, securing your right to be paid for the labor you've put into the property.
In the unlikely event of non-payment, the mechanic’s lien Colorado law then grants you the right to foreclose on the property, reclaiming your due payment via the property sale.