Mechanics' Lien Waiver and Release

MECHANICS' LIEN WAIVER AND RELEASE

State of Colorado

PRACTITIONER NOTES AND INSTRUCTIONS

Overview of Colorado Mechanics' Lien Waiver Law

Colorado does not prescribe mandatory statutory lien waiver forms. However, Colorado imposes a unique requirement under C.R.S. § 38-22-119: any agreement to waive lien rights must contain a statement that all debts owed to third parties relating to the goods or services covered by the waiver have been paid or will be timely paid.

Key Colorado Lien Law Provisions

Critical: Third-Party Payment Certification Requirement

Under C.R.S. § 38-22-119(2), every lien waiver must include a statement that all debts owed to third parties (subcontractors, suppliers, laborers) relating to the goods or services covered by the waiver have been paid or will be timely paid. Failure to include this certification may render the waiver ineffective against third parties.

Advance Waiver of Lien Rights

Colorado law does not prohibit advance waivers of lien rights. However, under § 38-22-119(1), an agreement to waive, abandon, or refrain from enforcing a lien is binding only between the parties to the contract — it does not affect the rights of third parties such as subcontractors or suppliers.

Colorado Trust Fund Doctrine

Under C.R.S. § 38-22-127, all moneys disbursed to a contractor or subcontractor for construction are trust funds to be applied first to the payment of persons who furnished labor, materials, equipment, or services. Diversion of trust funds is a criminal offense (theft). Lien waivers should reference this doctrine.

When to Use Each Waiver Form

1. Conditional Waiver on Progress Payment — Use when a progress payment check has been tendered but not yet cleared.
2. Unconditional Waiver on Progress Payment — Use after a progress payment has been received and cleared.
3. Conditional Waiver on Final Payment — Use when the final payment has been tendered but not yet cleared.
4. Unconditional Waiver on Final Payment — Use after the final payment has been received and fully cleared.

Important Warnings

WARNING: Under C.R.S. § 38-22-119(2), every lien waiver MUST contain a statement regarding payment of debts to third parties. All four forms below include this required language.

WARNING: Under § 38-22-128, if a lien has been filed and subsequently paid in full, the lien claimant must release the lien within ten (10) days of written demand. Failure to release subjects the claimant to liability for actual damages and reasonable attorney fees.

WARNING: Colorado's trust fund doctrine (§ 38-22-127) means that construction funds are held in trust. A contractor who receives payment and fails to pay subcontractors/suppliers may face criminal prosecution for theft, in addition to lien exposure.

FORM 1: CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT

(Colorado — Effective Only Upon Clearance of Payment)

NOTICE: This document waives and releases lien rights only to the extent and through the date stated below, and only upon the condition that payment is actually received and the check clears. This document does not affect lien rights for retainage, pending change orders, or work/materials furnished after the Through Date.

Project Information:

Claimant Information:

Payment Information:

CONDITIONAL WAIVER AND RELEASE

Upon receipt and clearance of payment in the amount of $[________________________________] from [________________________________] (Payor), the undersigned Claimant hereby conditionally waives and releases any and all mechanics' lien rights arising under Colorado Revised Statutes § 38-22-101 et seq. for labor, services, equipment, machinery, or materials furnished to the above-described Property through the Through Date stated above, to the extent of the amount stated.

This waiver and release is conditioned upon actual receipt of payment and clearance of the above-referenced check or instrument of payment. If payment is not received, or if the check or instrument fails to clear for any reason, this waiver and release shall be null and void, and the undersigned shall retain all lien rights as though this document had not been executed.

Exceptions. This waiver and release does NOT cover and the undersigned expressly reserves lien rights for:

☐ Retainage in the amount of $ [________________________________]
☐ Pending change orders, specifically: [________________________________]
☐ Disputed claims in the amount of $ [________________________________]
☐ Labor, services, equipment, or materials furnished after the Through Date
☐ Other: [________________________________]

REQUIRED THIRD-PARTY PAYMENT CERTIFICATION (C.R.S. § 38-22-119(2)). The undersigned hereby states and certifies that all debts owed to any third party by the undersigned and relating to the goods, labor, or services covered by this waiver of lien rights have been paid or will be timely paid from the progress payment referenced herein. The undersigned acknowledges that all moneys received constitute trust funds under C.R.S. § 38-22-127 and will be applied first to the payment of persons who furnished labor, materials, or services.

Signature:

Claimant Signature: ______________________________

Printed Name: [________________________________]

Title: [________________________________]

Company: [________________________________]

Date Signed: [__/__/____]

FORM 2: UNCONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT

(Colorado — Irrevocable Upon Execution)

NOTICE: This document waives and releases lien rights unconditionally and irrevocably to the extent and through the date stated below. This document is effective immediately upon execution. The undersigned should NOT execute this document unless payment has actually been received and the check has cleared.

Project Information:

Claimant Information:

Payment Information:

UNCONDITIONAL WAIVER AND RELEASE

The undersigned Claimant hereby unconditionally and irrevocably waives and releases any and all mechanics' lien rights arising under Colorado Revised Statutes § 38-22-101 et seq. for labor, services, equipment, machinery, or materials furnished to the above-described Property through the Through Date stated above, to the extent of the amount of $[________________________________] received.

This waiver and release is unconditional and effective immediately upon execution. It is binding regardless of any subsequent dispute, non-payment of other amounts, or other claim by the undersigned.

Exceptions. This waiver and release does NOT cover:

☐ Retainage in the amount of $ [________________________________]
☐ Pending change orders, specifically: [________________________________]
☐ Labor, services, equipment, or materials furnished after the Through Date
☐ Other: [________________________________]

REQUIRED THIRD-PARTY PAYMENT CERTIFICATION (C.R.S. § 38-22-119(2)). The undersigned hereby states and certifies that all debts owed to any third party by the undersigned and relating to the goods, labor, or services covered by this waiver of lien rights have been paid or will be timely paid. The undersigned acknowledges that all moneys received constitute trust funds under C.R.S. § 38-22-127.

Signature:

Claimant Signature: ______________________________

Printed Name: [________________________________]

Title: [________________________________]

Company: [________________________________]

Date Signed: [__/__/____]

FORM 3: CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT

(Colorado — Effective Only Upon Clearance of Final Payment)

NOTICE: This document waives and releases ALL lien rights on the project, conditioned upon actual receipt and clearance of the final payment. If payment is not received or does not clear, this document shall have no effect.

Project Information:

Claimant Information:

Payment and Contract Information:

CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT

Upon receipt and clearance of final payment in the amount of $[________________________________] from [________________________________] (Payor), the undersigned Claimant hereby conditionally waives and releases any and all mechanics' lien rights, bond rights, and any other lien rights arising under Colorado Revised Statutes § 38-22-101 et seq. for all labor, services, equipment, machinery, or materials furnished to the above-described Property in connection with the Project.

This waiver is conditioned upon actual receipt of payment and clearance of the above-referenced check or instrument. If the final payment is not received or the check fails to clear, this waiver shall be null and void.

This waiver covers ALL work, labor, services, equipment, and materials furnished from commencement through completion, including retainage, change orders, and extras, with the following exceptions:

☐ No exceptions — full and final release
☐ Disputed amounts totaling $ [________________________________], described as: [________________________________]

REQUIRED THIRD-PARTY PAYMENT CERTIFICATION (C.R.S. § 38-22-119(2)). The undersigned hereby states and certifies that all debts owed to any third party by the undersigned and relating to the goods, labor, or services covered by this waiver have been paid or will be timely paid upon receipt and clearance of the final payment. The undersigned further certifies that all moneys received will be applied as trust funds under C.R.S. § 38-22-127 for the payment of subcontractors, suppliers, and laborers.

Signature:

Claimant Signature: ______________________________

Printed Name: [________________________________]

Title: [________________________________]

Company: [________________________________]

Date Signed: [__/__/____]

FORM 4: UNCONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT

(Colorado — Irrevocable Full and Final Release)

NOTICE: This document constitutes a full, final, unconditional, and irrevocable waiver and release of ALL lien rights on the project. The undersigned should NOT execute this document unless the final payment has been received in full and the check has cleared. Once signed, this waiver cannot be revoked.

Project Information:

Claimant Information:

Payment and Contract Information:

UNCONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT

The undersigned Claimant hereby unconditionally and irrevocably waives and releases any and all mechanics' lien rights, bond rights, and any other lien rights arising under Colorado Revised Statutes § 38-22-101 et seq. for all labor, services, equipment, machinery, or materials furnished to the above-described Property in connection with the Project.

This waiver is unconditional and irrevocable. It covers ALL work from commencement through final completion, including retainage, change orders, extras, and all other amounts.

The undersigned acknowledges and represents that:

(a) The total contract price, as adjusted, was $[________________________________];

(b) The undersigned has received total payments of $[________________________________], constituting payment in full;

(c) No further amounts are due or owing in connection with the Project;

(d) All subcontractors, suppliers, and laborers have been paid in full or will be paid in full from the final payment; and

(e) The undersigned has no outstanding claims, disputes, or demands against the Property Owner, Hiring Party, or Property.

REQUIRED THIRD-PARTY PAYMENT CERTIFICATION (C.R.S. § 38-22-119(2)). The undersigned hereby states and certifies that all debts owed to any third party by the undersigned and relating to the goods, labor, or services covered by this waiver have been paid in full. The undersigned acknowledges compliance with the trust fund requirements of C.R.S. § 38-22-127.

Signature:

Claimant Signature: ______________________________

Printed Name: [________________________________]

Title: [________________________________]

Company: [________________________________]

Date Signed: [__/__/____]

NOTARIZATION (RECOMMENDED)

State of Colorado
County of [________________________________]

Before me, the undersigned Notary Public, on this [____] day of [________________________________], 20[____], personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity.

WITNESS my hand and official seal.

Notary Public Signature: ______________________________

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARIAL SEAL]

CERTIFICATE OF DELIVERY

I hereby certify that a true and correct copy of the foregoing Mechanics' Lien Waiver and Release was delivered to:

Delivered by: ______________________________

Date: [__/__/____]

SOURCES AND REFERENCES

• Colorado Revised Statutes § 38-22-101 through § 38-22-133 (General Mechanics' Lien)
• Colorado Revised Statutes § 38-22-119 (Agreement to Waive — Effect)
• Colorado Revised Statutes § 38-22-127 (Trust Fund Doctrine)
• Colorado Revised Statutes § 38-22-128 (Release of Lien)
• Colorado Secretary of State — Notary Program