Being a plumber, you work as a subcontractor for construction companies. When running a business on your own, you must combine the act of plumbing with the necessity of reading contracts and collecting money for the jobs you perform.
You complete the job, the city and contractor sign off, and you wait for your payment to arrive. It never comes, and the contractor refuses to give you a reason for the delay. What can you do to get your money?
You have the option of filing a mechanic’s lien, which is a claim that you can make against a property for labor or materials. The state of Colorado requires a written contract when the amount is over $500.
If you intend to file a lien, you must send notice of intent 20 days before filing the mechanic’s lien. Then you have either four months after the last delivery of services or materials or two months if you only provide labor. You must decide to file a mechanic’s lien within six months after completion or furnishing services or materials.
When a construction contract exceeds $150,000, a surety company provides a bond to protect you for the work you provide as instructed in the agreement. You have 90 days to file a Verified Statement of Account any time before the final settlement of the contract.
The Colorado construction trust fund statute
This statute requires that subcontractors and suppliers get paid. When signing a contract, you should receive the rules and regulations of the law. Colorado does not require a separate account for the money. However, the contractor must maintain a second set of records to account for each project or contract.
For you to make a claim toward the trust, make sure to document everything that you do during the job. Keep copies of your invoices and monies you receive. It is essential to understand this statute, as it is a powerful tool for relief if you do not receive payment.