Under Colorado law, specifically section 38-22-106 of the Colorado Revised Statutes, a lien can be established from the commencement of work under the contract between the property owner and the contractor. This means that the contractor's ability to place a lien generally begins when they start work or supply materials under the terms of the contract.

However, if no work has been performed or materials supplied, establishing a lien can be challenging. The purpose of the mechanic's lien statute in Colorado is to protect those who have supplied labor or materials for a property improvement project and have not been compensated. To file a lien, the supplier of materials or labor must demonstrate that these were provided "at the instance of the owner or by a person who is an agent of the owner...." Crosslands Constr. Co. v. Gauger, 2020 Colo. Dist. LEXIS 2078.

Therefore, if a contract is canceled before any work begins or materials are delivered, it would typically be difficult for a contractor to justify placing a lien on the property, since the basis for such a lien—provision of labor or materials—has not been established. However, the exact terms of the contract and the specific circumstances will significantly impact this issue. I should point out that even if the contractor can't place a lien on your property, it does not mean that they cannot sue you for damages.

If you signed a contract but want to cancel it before any work is done or materials are supplied, it's crucial to review the terms of the contract regarding cancellation. Some contracts may include a cancellation fee or other terms that address termination of the agreement. If the contract allows for cancellation within a certain period or under specific conditions, you should adhere to those terms to avoid legal issues. I would highly recommend speaking to an attorney before taking any action, or refraining from taking action. If you would like to speak to one of our real estate partners, please visit our contact us page.