Definitely a tough situation to deal with when you first get your home. In Colorado, there is law that prevents a subcontractor from filing a lien against a homeowners when the homeowner fully pays the primary contractor. The goal is to prevent this very situation.

Under Colorado Revised Statute § 38-22-102, it is a defense to a lien that the homeowner "has paid an amount sufficient to satisfy the contractual and legal obligations of the owner... to the principal contractor ...for the purpose of payment to the subcontractors or suppliers of laborers, materials, or services to the job, when....[t]he property is a single-family, owner-occupied dwelling unit, including a residence constructed and sold for occupancy as a primary residence."

Assuming that the developer retained ownership of the house until its completion, a further complication arises from the fact that the house was under the developer's ownership, rather than yours, during the time the work was carried out. Fortunately, there is a case directly on point.

In the case Koch Plumbing & Heating, Inc. v. Brown, the homeowners constructed a new residence. Initially, the title of the property was held by the builder and was only transferred to the homeowners upon completion and the final payment to the developer. This mirrors your situation, where the developer failed to fully pay the subcontractors, resulting in the plumber filing a lien against the homeowners. Subsequently, the subcontractor initiated foreclosure proceedings on the homeowner's new property to recover the debt.

In the end, the court ruled in favor of the homeowners, halting the foreclosure action.You can read about the entire case in our article Fight the Lien on Your Home.

Finally, as you alluded to lien filings require strict notice and filing deadlines. So, even if the above-referenced statute and case does not apply to your situation, it is quite possible that the subcontractor did not follow the statute. You can read more about the filing deadlines in The Power of a Mechanic’s Lien

Of course, I do not know all of your facts, so I can only give you general advice. For example, did you pay the builder fully? Is the home your primary residence? Everyone's facts are slightly different.

You might be able to persuade the plumber to lift the lien by directing them to the article "Fight the Lien on Your Home" that I previously mentioned. If not, I would recommend scheduling a case assessment with one of our real estate attorneys to discuss your options. The case assessment is free, so if you would like to discuss your options with us please feel free to reach out anytime.

Good luck and enjoy your new home.