What Happens When a Contractor Files a Mechanics' Lien for Defective Work in Colorado?
Few things are more frustrating for a Colorado homeowner than discovering serious construction defects—failed waterproofing, uneven floors, structural issues, faulty electrical work—only to receive a mechanic’s lien from the very contractor who caused the problem. Homeowners often ask: How can a contractor who performed defective work try to foreclose on my home?
The answer lies in Colorado’s lien statute, C.R.S. § 38-22-101 et seq., which allows a contractor to file a lien with very little procedural oversight. The county clerk does not evaluate whether the work was defective, incomplete, or unlawful. As long as the claimant fills out the form and pays the recording fee, the lien gets recorded.
But recording a lien and enforcing a lien are very different things.
Colorado’s lien laws protect contractors only when they have added real value to the property. Defective work changes that value equation dramatically.
If the contractor’s work must be redone, demolished, or corrected at significant cost, then the contractor may have conferred no value at all—and therefore may have no lien rights. In many cases, the homeowner is actually the one entitled to damages.
For background on lien fundamentals, some homeowners find it useful to review Understanding Mechanic’s Liens in Colorado: A Homeowner’s Guide before diving deeper into defective-work issues.
Defective Work Undermines the Contractor’s Claim of an “Improvement”
The entire premise of a mechanic’s lien is that the contractor has provided an improvement to real property. But defective work is not an improvement; it is a liability.
If a contractor installs a leaking roof, pours a foundation that fails inspection, miswires electrical systems, or performs structural work without engineering, their labor may actually reduce the home’s value. Colorado courts have consistently recognized that a contractor who materially breaches a contract through defective workmanship may be barred from enforcing the contract—and by extension, from enforcing a lien.
Defects also commonly overlap with:
incomplete work,
abandonment,
unpermitted construction, and
violation of local licensing laws.
Those related issues are explored in What to Do When a Contractor Files a Lien for Incomplete Work, Can a Contractor File a Mechanic’s Lien After Abandoning the Job?, and Can an Unlicensed or Non-Permitted Contractor File a Mechanic’s Lien?.
When defects, incompletion, or unpermitted work are present, lien rights are almost always weakened—sometimes fatally.
Why Contractors Use Liens to Avoid Accountability for Defects
A mechanic’s lien is a pressure device. It clouds title, disrupts financing, and puts homeowners on the defensive. Contractors know that homeowners often feel cornered when a lien is filed, especially if a sale or refinance is underway.
For some contractors, filing a lien is not about enforcing legal rights—it is about avoiding responsibility. If the work is defective, they may:
attempt to shift blame to the homeowner,
argue that defects were “extras” not included,
claim they need more money to “fix” their own mistakes,
attempt to force payment to walk away, or
use the lien to silence complaints or online reviews.
These pressure tactics often coincide with inflated or retaliatory liens, discussed in Fraudulent or Retaliatory Mechanic’s Liens in Colorado.
Homeowners need to understand that a contractor’s confidence in filing a lien does not mean the lien has merit.
How Colorado Courts Evaluate Liens Tied to Defective Work
When a lien dispute reaches a courtroom, judges look beyond the recorded document and examine the quality, legality, and completeness of the contractor’s work. Courts frequently consider:
whether the work passed inspection,
whether required permits were obtained,
whether the work complied with building codes,
whether materials matched the contract,
whether the contractor substantially performed,
whether the work must be repaired or replaced, and
whether the homeowner already paid for work that must now be redone.
A contractor who left behind dangerous electrical wiring, out-of-square framing, improper waterproofing, structural errors, or other significant defects may not be entitled to any lien at all.
In many defective-work cases, the homeowner’s repair costs exceed the contractor’s claimed lien amount—sometimes by a wide margin. That disparity often eliminates the contractor’s lien rights completely.
How Defective Work Connects to Other Lien Defenses
Defective work rarely exists by itself. Most homeowners facing defect-based liens also discover:
incomplete work,
inflated billing,
abandonment,
misrepresented qualifications,
lack of licensing or permitting, or
violations of the Colorado Building Code or municipal regulations.
These issues reinforce one another. For instance, unpermitted electrical or plumbing work that fails inspection is both defective and unlawful. Work performed by an unlicensed contractor may violate municipal ordinances, weakening lien rights even if the contractor insists the work was “good enough.”
Homeowners wanting to understand how billing disputes interact with defect-based liens may find Mechanic’s Liens for Overbilling or Inflated Invoices particularly helpful.
Practical Steps for Homeowners Confronting a Lien for Defective Work
The response begins with documentation. Homeowners should photograph visible defects, retain failed inspection reports, obtain repair estimates, and preserve all written communication with the contractor. These materials often provide an unmistakable picture of the work’s true condition.
A third-party expert—such as a licensed contractor, engineer, or inspector—can confirm the scope of defects and provide a repair plan. Their evaluation is invaluable both for disputing the lien and for pursuing damages.
Homeowners should also evaluate the timing and accuracy of the lien. Contractors who perform defective work often miss Colorado’s strict recording deadlines or inflate the amount claimed. Late or exaggerated liens are voidable and sometimes void outright.
Homeowners who need immediate relief—especially during a pending home sale—may choose to bond around the lien, a process explained in detail in How Colorado Property Owners Can Bond Around a Mechanic’s Lien. Bonding removes the lien from title so the transaction can proceed while the dispute is resolved.
Why Legal Help Matters in Defect-Related Lien Cases
Contractors who perform defective work and then file liens to avoid accountability tend to be the same contractors who ignore building codes, skip permits, overcharge, abandon projects, or misrepresent their qualifications. These cases rarely resolve cleanly without legal intervention.
A Colorado construction attorney can evaluate whether the lien is legally enforceable, develop a strategy to remove the lien, and pursue claims for:
cost of repairs,
diminished property value,
breach of contract,
violations of building codes, and
slander of title.
Once defective work is documented, most lien claims collapse under scrutiny—and many contractors prefer to resolve the matter rather than face the risk of attorney-fee awards or counterclaims.
Defective work may have been the contractor’s mistake, but you do not have to let it become your long-term problem. Colorado law gives homeowners powerful tools to correct the work and clear their title.
The information provided on this website is for general informational purposes only and should not be construed as legal advice or legal opinion. You should not act or refrain from acting on the basis of any information provided on this website without seeking legal advice from an attorney.