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Recent Changes to Policy Concerning Real Estate Recordation Fees

04/26/2009

This is the sixteenth in a series of brief articles that Moye White is sending to its clients and friends to provide practical insight about the opportunities and challenges presented by today's economy.

Contractors and other companies who regularly record documents in Colorado county real estate records should be aware of a recent change in policy related to the filing fees that some counties are implementing. The fees charged by the county clerk and recorders for recording documents in the real property records are set forth in Colorado Revised Statute § 30-1-103 (the “Statute”). The Statute provides that the clerk and recorder shall charge five dollars per page for any document submitted for recording. In 1996, the General Assembly amended the Statute and increased the fees by adding paragraph 4, which provides:

(4) Documents containing multiple grants, notices, assignments, or releases of leases, deeds of trust, mortgages, or liens, or other instruments that require multiple entries in the grantor or grantee index, shall incur an additional fee of five dollars for each such entry in excess of one per document.

Paragraph 4 requires that the clerk and recorder charge an additional five dollars per grantor and grantee beyond the first one. Until recently, no counties had charged this additional fee. Starting January 1, 2009, several counties began charging the additional fee required by paragraph 4, while other counties indicated that they will continue not to charge the additional fee. The enforcement of paragraph 4 by certain counties came as a big surprise to many who relied on the universal practice in Colorado to charge only five dollars per page.

Paragraph 4 significantly impacts the cost of recording with the clerk and recorder, and especially impacts the construction industry. For example, a material supplier supplies goods to be used to construct a multi-unit condominium project, large subdivision, or hotel that sells many of its units as time shares. The material supplier is not paid for the materials and intends to file a mechanics’ lien against the project. To perfect its mechanics lien, the material supplier must name all owners of the property and record its lien with the clerk and recorder. In the case of a condo project, if 100 condos have been sold, the material supplier must pay $500 ($5.00 for the first page, plus $495 for the 99 owners beyond the first owner) just to record its statement of lien. Some projects, including condominiums and time shares, can have hundreds or thousands of owners, significantly increasing the cost to record a mechanics lien.

Mechanics lien claimants also must contend with strict deadlines for recording a lien. If the lien is returned by the clerk and recorder, or not recorded at all, because the fee submitted was not in compliance with paragraph 4, the mechanics lien claimant may run out of time to refile and perfect its lien, losing out on one avenue of getting paid.

It is not clear why certain counties waited 13 years to start charging the additional fee allowed by the Statute, but the message is clear to check with the particular county to determine the appropriate fee before recording any document.

For more information contact: Jamie Belgum, Carrie Rodgers or Jim Miller, Chair, Litigation Section at (303) 292-2900.

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Moye White LLP has prepared this bulletin to provide general information; however this bulletin does not provide legal advice and does not create an attorney-client relationship between the reader and Moye White. No legal or business decision should be based solely on the content of this bulletin.

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