What to Do When a Contractor Files a Mechanics' Lien for Incomplete Work
Homeowners are often caught off guard when a contractor files a mechanic’s lien after failing to finish the job. The contractor may have walked off midway through the project, refused to return until paid more than the contract allowed, or simply disappeared. Yet the lien arrives anyway—sometimes claiming the full contract balance, sometimes claiming even more.
Colorado homeowners in this situation understandably feel blindsided. A lien is a public, recorded document that clouds title and threatens the home itself. But in the context of incomplete work, a lien is often far weaker than it appears. Colorado’s lien statute is designed to protect contractors only when they have added real, measurable value to the property. When the work is unfinished, defective, or unlawful, that value is often absent.
If you are just starting to learn about lien rights, you might review Understanding Mechanics Liens in Colorado: A Homeowner’s Guide first. Once the foundational concepts are clear, the reasons incomplete work undermines lien rights become much easier to see.
The Relationship Between Value, Completion, and Lien Rights
Mechanic’s liens exist to prevent unjust enrichment. A homeowner should not receive a completed improvement without paying for it. But when the contractor leaves the project half-built—especially when the work done must be removed or re-done—there is no enrichment. There may, in fact, be a net loss. Homeowners frequently have to pay another contractor more to repair or complete the work than the abandoning contractor was ever owed.
Colorado courts understand this dynamic, which is why substantial performance is central to lien enforcement. A contractor who delivers incomplete or defective work often cannot claim the full contract price under any theory. And because mechanic’s liens secure only the reasonable value of improvements actually provided, the lien amount typically collapses when the underlying work is shown to be unfinished or unusable.
Many incomplete-work disputes overlap with abandonment issues. Homeowners facing this problem may find it helpful to review Can a Contractor File a Mechanic’s Lien After Abandoning the Job? for a deeper understanding of how walking off a project affects lien rights.
How Contractors Attempt to Inflate Liens for Incomplete Work
Contractors who fail to finish the job often attempt to compensate by inflating the lien. Some record liens claiming the entire remaining contract balance—even though they performed a fraction of the work. Others include charges for materials never delivered, labor never performed, or change orders never approved.
These problems almost always appear alongside inaccurate accounting or overbilling practices, which we explore in Mechanic’s Liens for Overbilling or Inflated Invoices. The more exaggerated the lien amount, the easier it is for a homeowner to challenge its validity.
A lien must reflect only the reasonable value of labor and materials actually furnished. Claims for hypothetical future work, unauthorized upgrades, penalties, attorney fees, or warranty obligations are not permitted under Colorado’s lien statute, C.R.S. § 38-22-101 et seq. The statute is available through the Colorado General Assembly’s website at: https://leg.colorado.gov/.
When a contractor inflates the lien to pressure a homeowner, they risk not only losing the lien but facing liability for knowingly filing a false or excessive lien.
How Incomplete Work Intersects With Defects, Permits, and Code Compliance
Incomplete work rarely travels alone. A contractor who fails to finish often leaves behind improper installations, code violations, unsafe conditions, or unpermitted work. These issues erode lien rights even further.
Colorado law does not protect contractors who perform work unlawfully. If the work required permits but none were obtained, or if local licensing requirements prevented the contractor from performing certain trades, the contractor may have been in violation of municipal regulations. Our article Can an Unlicensed or Non-Permitted Contractor File a Mechanic’s Lien? explores that issue in depth.
Incomplete work and defective work often blur together. A home cannot be considered “improved” when the work performed must be removed and rebuilt. For homeowners evaluating a lien tied to defective workmanship, the forthcoming article on What Happens When a Contractor Files a Mechanic’s Lien for Defective Work will provide a devoted narrative on that topic.
Practical Steps for Homeowners Confronting a Lien for Incomplete Work
The best response begins with documentation. Photographs, videos, inspection records, and written communications capture the reality on the ground. A completion or repair estimate from a qualified contractor provides a clear picture of what it will take to finish the job correctly.
These materials help show the true value of the improvement—often far lower than what the contractor claims. When the cost to repair exceeds the value of what was provided, lien rights can evaporate entirely.
Homeowners should also evaluate the timing of the lien. Contractors who leave the job early often file liens long after the statutory deadline has passed. A lien recorded late is unenforceable. More on deadline analysis is available in How Long Does a Contractor Have to File a Mechanic’s Lien?.
If a home sale or refinance is approaching, the immediate goal may shift to clearing title. Colorado allows homeowners to bond around the lien, removing it from title while the underlying dispute continues. We explain that process in detail in How Colorado Property Owners Can Bond Around a Mechanic’s Lien.
Why Legal Help Is Often Necessary in Incomplete-Work Lien Cases
Incomplete work cases often give rise to multiple homeowner claims: breach of contract, defective construction, violations of building codes, consumer protection claims, and even actions under the Homeowner Protection Act (HPA). These claims strengthen the homeowner’s negotiating position and weaken the contractor’s lien rights.
A contractor who leaves a project unfinished and then records a lien has already demonstrated a willingness to misuse contractual and statutory tools. Having legal counsel ensures the homeowner is not bullied into paying for work that failed to deliver value.
With a coordinated strategy, homeowners can usually invalidate the lien, shift leverage back in their favor, and pursue recovery for the contractor’s breach. A lien for incomplete work rarely survives close legal scrutiny.
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.