When trying to sell your house, you or the buyer will inevitably do a title search on the house. What many people do not expect is an unknown lien on the property. This can be extremely annoying considering the sale of the property is probably coming soon.
Colorado law does provide recourse, but depending on the situation it may not be that fast.
First, did you receive notice of the lien from the lienor (the person who placed the lien on the property)? Colorado requires a person seeking a lien to provide notice to the property owner before they file the lien. Colorado is very strict when it comes to following proper notice. If this is not done properly the lien may be unenforceable.
Second, is the lien notice sufficient? Colorado law requires a person seeking a lien to provide certain information in their lien filing. The information required is very simple and short; it usually is enough information for non-party to understand what was done and for how much. If that information is not there it is likely lien is unenforceable.
If the answer to either of the above questions is yes, you may have an unenforceable lien. In this scenario you have a couple different options. You can send a letter to the person who filed the lien that you do not believe the lien is proper and they should remove it. If this does not work, you may have to file a case in District Court. You can either file an action for declaratory judgment or a quiet title action. Either process will allow the court to properly adjudicate the lien and hopefully allow you to sell your house.
Third, do you actually owe this person money? Colorado law does not permit people to file liens for no reason. In fact there are harsh consequences for doing so. If you believe the lien was filed on your property in error, then the lien may be spurious.
If the lien is what’s known as a spurious lien, you may file a case with the District Court. This will be a summary proceeding, meaning it will be expedited. In this case you will present the evidence and the judge can make an ex parte ruling. This means that the judge doesn’t have to hear the other side if you provide enough evidence that the lien was in fact spurious.