Contractors’ Civil Liability Under Colorado’s Mechanics’ Lien Trust Fund Statute
May 1, 2025
Colorado Lawyer
Under Colorado’s mechanics’ lien trust fund statute, CRS § 38-22-127 (trust fund statute or statute), a contractor who fails to pay its subcontractors, despite having been paid by the owner, can face criminal and civil liability. This article provides an overview of civil liability under the trust fund statute.
A contractor can face significant civil liability for violating the statute, including treble damages and reasonable attorney fees (in addition to costs and interest generally recoverable). In addition, corporate representatives could be personally liable if they personally participated in failing to pay subcontractors the funds received from a property owner. Further, civil liabilities incurred pursuant to the trust fund statute may be non-dischargeable in bankruptcy. As a result, property owners facing mechanics’ liens and subcontractors who have not been paid often use the statute’s strong mechanism.
Read the full article in the Colorado Bar Association's Colorado Lawyer here.
