C.R.S. Section 38-22-127
Moneys for lien claims made trust funds

  • disbursements
  • penalty

(1)

All funds disbursed to any contractor or subcontractor under any building, construction, or remodeling contract or on any construction project shall be held in trust for the payment of the subcontractors, laborer or material suppliers, or laborers who have furnished laborers, materials, services, or labor, who have a lien, or may have a lien, against the property, or who claim, or may claim, against a principal and surety under the provisions of this article and for which such disbursement was made.

(2)

This section shall not be construed so as to require any such contractor or subcontractor to hold in trust any funds which have been disbursed to him or her for any subcontractor, laborer or material supplier, or laborer who claims a lien against the property or claims against a principal and surety who has furnished a bond under the provisions of this article if such contractor or subcontractor has a good faith belief that such lien or claim is not valid or if such contractor or subcontractor, in good faith, claims a setoff, to the extent of such setoff.

(3)

If the contractor or subcontractor has furnished a performance or payment bond or if the owner of the property has executed a written release to the contractor or subcontractor, he need not furnish any such bond or hold such payments or disbursements as trust funds, and the provisions of this section shall not apply.

(4)

Every contractor or subcontractor shall maintain separate records of account for each project or contract, but nothing contained in this section shall be construed as requiring a contractor or subcontractor to deposit trust funds from a single project in a separate bank account solely for that project so long as trust funds are not expended in a manner prohibited by this section.

(5)

Any person who violates the provisions of subsections (1) and (2) of this section commits theft, as defined in section 18-4-401, C.R.S.

Source: Section 38-22-127 — Moneys for lien claims made trust funds - disbursements - penalty, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-38.­pdf (accessed Oct. 20, 2023).

38‑22‑101
Liens in favor of whom - when filed - definition of person 38‑22‑102
Payments - effect 38‑22‑103
Attaching of lien - enforcement 38‑22‑104
Lien on mining property 38‑22‑105
Property subject to lien - notice 38‑22‑105.5
Notice of lien law 38‑22‑106
Priority of lien - attachments 38‑22‑107
Lien attaches to water rights and franchises 38‑22‑108
Rank of liens 38‑22‑109
Lien statement 38‑22‑110
Action commenced within six months 38‑22‑111
Joinder of parties - consolidation of actions 38‑22‑112
Allegations of complaint 38‑22‑113
Hearing - judgment - summons - defense 38‑22‑114
Disposition of proceeds - execution 38‑22‑115
Parties to action 38‑22‑116
Costs 38‑22‑117
Assignment of lien - failure to support lien 38‑22‑118
Satisfaction of lien - failure to release 38‑22‑119
Agreement to waive - effect 38‑22‑120
Rules of civil procedure apply 38‑22‑121
Liens of surveyors and engineers 38‑22‑122
Lien under two contracts - effect 38‑22‑123
Payment to avoid invalid 38‑22‑124
Other remedies not barred 38‑22‑125
Bona fide purchaser 38‑22‑126
Disburser - notice - duty of owner and disburser 38‑22‑127
Moneys for lien claims made trust funds - disbursements - penalty 38‑22‑128
Excessive amounts claimed 38‑22‑129
Principal contractor may provide bond prior to commencement of work 38‑22‑130
Payment of claims by surety 38‑22‑131
Substitution of bond allowed 38‑22‑132
Lien to be discharged 38‑22‑133
Action to be brought on bond or undertaking
Green check means up to date. Up to date

Current through Fall 2024

§ 38-22-127’s source at colorado​.gov