SB 26-74

Senate Bill 26-74, which has been signed into law in Colorado, clarifies that contractors working on public construction projects who file exaggerated claims will lose their right to those claims and may have to pay additional costs. This aligns the penalties for private and public construction contractors when they overstate their claims. The bill also allows both private and public contractors to include certain costs like delays or disruptions in their claims, and it specifies that a court's lower award doesn't mean the original claim was excessive. This affects contractors on both private and public projects by setting clearer rules for filing claims and penalties for overstating them.

Official Summary

Currently, a contractor on a private construction project has a statutory right to secure payment with a general mechanic's lien. However, if the contractor knowingly files on the lien for an excessive amount, the contractor forfeits all rights to the lien and is liable to the person against whom the lien was filed for costs and attorney fees. A contractor on a public construction project has a similar right to secure payment by filing a verified statement of claim, which requires the project owner to withhold funds sufficient to pay the claim, usually in the form of a bond. The act clarifies that a public construction contractor who knowingly files a verified statement of claim for an excessive amount forfeits all rights pursuant to the verified statement of claim. Thus, the act aligns, for both a private and public construction contractor, the penalty for claiming an excessive amount on a lien or verified statement of claim to the loss of rights related to that lien or verified statement of claim, respectively.     The act expressly allows for a private mechanic's lien or public verified statement of claim to include costs otherwise allowed under a contract in the lien or verified statement of claim amount, including costs incurred as a result of delay, lost productivity, or other disruption to the work. The act also clarifies that an award by a court for an amount less than the amount claimed in a lien or verified statement of claim does not render the amount claimed excessive.(Note: This summary applies to this bill as enacted.)

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