You Filed a Mechanic’s Lien. Then You Discovered a Mistake. Now What?

Recording a mechanic’s lien is an important tool for Colorado contractors seeking payment for labor, materials, and services furnished on construction projects.  But what happens when a contractor records a lien and subsequently discovers that the amount claimed is incorrect?  Can the contractor amend the lien to reduce the amount owed, even after the statutory deadline for recording or amending the lien has passed?  Or does the original mistake render the lien unenforceable?

The Colorado Court of Appeals addressed these questions in Galiant Homes, LLC v. Herlik, 2025 COA 3, providing important guidance for contractors recording mechanic’s and materialman’s liens in connection with construction projects.

In Galiant, the Court of Appeals held that a mechanic’s lien is not necessarily excessive merely because (1) the lien amount includes costs the contractor has not yet paid, or (2) the lien amount is subsequently reduced after recording.  More importantly, the court held, as a matter of first impression, that a contractor may amend its lien after the statutory deadline to reduce the amount claimed based on information discovered after the original lien was recorded.

The Facts Behind Galiant

The relevant facts underlying the Galiant decision are relatively straightforward.  A custom homebuilder contracted with homeowners to construct a home in Monument, Colorado.  The homeowners terminated the contract before the homebuilder completed the project.

Following termination, the homebuilder issued a final invoice for $74,900.21 and recorded a mechanic’s and materialman’s lien against the property for the same amount.

Thereafter, the homebuilder amended its lien twice.  First, it reduced the lien amount after discovering that the homeowners had paid certain vendors directly for materials included in the original lien.  Second, it further reduced the lien amount to correct calculation errors discovered during arbitration.

Ultimately, the original $74,900.21 lien was reduced to $44,434.23 and then to $39,714.63.

The parties arbitrated the breach of contract and unjust enrichment claims, and the arbitrator found that the homeowners had breached the contract and awarded damages, attorneys’ fees, and costs to the homebuilder.  The arbitrator left the issues relating to the lien, including its validity, enforceability, and defenses, for the trial court.

The trial court upheld the lien and allowed foreclosure.  The homeowners appealed.

Was the Original Lien Excessive?

On appeal, the homeowners argued, among other things, that the trial court erred by finding that the lien was not excessive.  They contended that the original lien improperly included amounts that the homebuilder had not yet paid and amounts that were subsequently removed through amendments.

The Court of Appeals rejected these arguments.

The court determined that the homebuilder reasonably believed the original lien amount was owed when the lien was recorded and later corrected the amount upon discovering new information.  The evidence did not establish that the homebuilder had knowingly overstated its lien.

The court emphasized that Colorado’s excessive lien statute, C.R.S. § 38-22-128, is intended to prevent knowingly excessive liens, not to penalize contractors who make good-faith corrections to amounts originally claimed.

Accordingly, the fact that the homebuilder ultimately recovered less than the amount originally claimed did not, by itself, establish that the original lien was excessive.

Can a Mechanic’s Lien Be Amended After the Statutory Deadline?

Perhaps the more significant aspect of Galiant concerns the timing of the amendments.

Under C.R.S. § 38-22-109, Colorado law establishes deadlines for recording mechanic’s liens and filing amendments to lien statements.  The homeowners argued that because the homebuilder amended its lien after the applicable statutory deadline, those amendments were untimely and invalidated the original lien.

The Court of Appeals disagreed.

The court recognized that the homebuilder had timely recorded its original lien.  The subsequent amendments did not increase the amount claimed or seek to assert additional lien rights.  Instead, they reduced the amount claimed to account for information the homebuilder learned after recording the original lien.

The court concluded that the statutory amendment deadline did not prohibit reductions based on previously unavailable information discovered after that deadline.

In reaching its decision, the court explained that nothing in the statute suggested that an untimely amendment necessarily invalidated an otherwise valid original lien.  Moreover, interpreting the statute to prohibit a contractor from reducing an overstated lien would be inconsistent with the underlying purpose of Colorado’s mechanic’s lien laws.

As a result, the court upheld the amendments and affirmed the trial court’s judgment allowing foreclosure of the lien.

What Does This Mean for Colorado Contractors?

The Galiant decision provides useful guidance for contractors who discover mistakes in their mechanic’s liens after recording.

First, contractors should make every reasonable effort to calculate their lien amounts accurately before recording.  The decision does not excuse knowingly excessive liens or eliminate the statutory consequences of intentionally overstating amounts owed.

Second, contractors who subsequently discover that their recorded liens include amounts already paid, calculation errors, or other amounts that should not have been included may be able to amend their liens to reduce the amounts claimed, even after the statutory amendment deadline has passed.

Third, the circumstances surrounding the original lien calculation matter.  In Galiant, the homebuilder’s ability to demonstrate that it reasonably believed the original amount was owed, and that it amended the lien after discovering new information, was central to the court’s decision.

Finally, contractors should recognize the distinction between reducing an existing lien and attempting to increase or otherwise expand lien rights after the statutory deadline.  Galiant addressed amendments reducing the amount claimed based on subsequently discovered information.  It should not be interpreted as permitting contractors to disregard the statutory deadlines for recording or amending mechanic’s liens generally.

Conclusion

Colorado’s mechanic’s lien statutes provide important protections for contractors and suppliers seeking payment for their work.  At the same time, they impose significant requirements concerning the amounts claimed and the timing of lien filings.

The Galiant decision recognizes that mistakes can occur, even when contractors make reasonable efforts to calculate the amounts owed.  Where a contractor timely records a lien based on a reasonable, good-faith belief concerning the amount due, subsequently discovering information requiring a reduction does not necessarily invalidate the lien.

For Colorado contractors, the practical lesson is straightforward: calculate carefully, document the basis for the amounts claimed, and promptly correct mistakes when they are discovered.

A mistake in a recorded mechanic’s lien does not necessarily mean the contractor has lost its lien rights.