Colorado Unconditional Lien Waiver

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Find Colorado's General Mechanic's Lien laws at C.R.S. 38-22.

There are two types of lien waivers -- conditional and unconditional. A conditional waiver only becomes effective when a triggering event occurs, activating the waiver clause. The event is usually the payment of the due amount or the clearing of an issued check. A conditional waiver offers more protection for the contractor or subcontractor and less for the owner.

The second type of waiver is an unconditional waiver and is effective upon its issue to waive a lien claim for all or part of the potential claim amount. This waiver offers the owner stronger protection and the contractor or subcontractor less assurance of payment. Therefore, it should only be granted when the contractor or sub is close to 100% certain that payment will clear.

Be aware that if a lien claimant grants an unconditional waiver and the payment never arrives or the check bounces, he or she is out of luck for a mechanic's lien claim. There is still an option of recovery by filing a lawsuit based on a breach of contract, but such a suit could be lengthy, costly, and without any guarantee of a recovery in the end.

So, use the unconditional waiver once the money is sitting in the bank account or in situations without any doubt that the owner intends to pay.

This article is provided for informational purposes only and should not be relied upon as a substitute for an attorney's advice. Please contact a Colorado attorney with any specific question about lien waivers.

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