Under Under Chapter 38 of Colorado's general statutes, contractors, laborers and materialsmen have a right to file a mechanic's lien where payments due under contract have not been made. A mechanic's lien is a definitive encumbrance which can complicate, delay and perhaps terminate an owner's effort to transfer or refinance his or her property. Fortunately the same law section provides an immediate remedy for parties wishing to discharge a lien.
Pursuant to Chapter §38-22-131:
A lien release bond must be issued by a surety company with a certificate of authority in Colorado. Upon filing of the mechanic's lien release bond, the property referenced in the body of the bond is released from the lien and effectively stays pending proceedings to enforce the lien. In essence the Colorado lien release bond is "alternate security" for the lien liability rather than the property serving as the collateral.
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