For years, Colorado property owners, as well as banks and other lenders that had deeds of trust (mortgages) on real estate, paid off or settled with subcontractors and suppliers who claimed mechanic’s liens against the properties involved. They made those payments because they thought, or were advised, that the mechanic’s liens had priorities over the deeds of trust.
That is not necessarily true. Whether a particular mechanic’s lien has priority over a deed of trust requires careful factual and legal study. If a subcontractor’s or supplier’s mechanic's lien does not have priority over the deed of trust, the subcontractor or supplier may not get paid on its mechanic’s lien unless it is willing or able to pay off the loan secured by the deed of trust.