Contents
Agistors Liens
Child Support Liens
Colorado Housing and Financing Authority
Federal/State Tax Liens
General Lien Questions
Harvesters Liens
Hospital Liens
Mechanics Liens
Orders of Restitution
Redaction of Tax Identification Numbers
Searching Records
Spurious/Fraudulent Liens
Stud Service Liens

 

Spurious / Fraudulent Liens

Q1. What is a spurious (i.e., fraudulent or bogus) lien?

A1.  A spurious lien is an alleged lien or claim of lien that:

• is not provided for by a specific Colorado or federal statute or by a specific ordinance or charter of a home rule municipality;
• is not created, suffered, assumed, or agreed to by the owner of the property it claims to encumber; or
• is not imposed by order, judgment, or decree of a state or federal court.

A bogus statement is a financing statement that contains a false lien of claim and is usually not authorized to be filed by the debtor named in the financing statement. Spurious liens and bogus financing statements are both referred to as spurious documents.

A spurious document is any document that is forged or groundless, contains a material misstatement of false claim, or is otherwise patently invalid.

For more information, see section 38-35-201 and 38-35-204, C.R.S.

 

Q2. How do spurious documents get accepted for filing or recording?

A2.  Spurious documents are usually accepted by filing officers because spurious documents typically include information sufficient for filing under Title 4, Article 9, Part 5 of the Colorado Revised Statutes. The Secretary of State is simply a filing office for public records; therefore, the Secretary of State does not verify the accuracy or validity of documents. If a financing statement is submitted with all of the required information, the Secretary of State will record the document.

 

Q3. What should a person do if they believe that a fraudulent lien or "bogus" UCC Financing Statement has been filed naming them as a debtor?

A3.  The first thing a person can do if they believes that a spurious document has been wrongfully filed naming them as a debtor is to research whether such a lien or document has actually been filed or recorded. If the spurious document involves personal property, a person can search the UCC records of the Secretary of State’s website. If a person suspects a spurious document has been filed against real property, the individual should contact the County Clerk and Recorder for the county where the real property is located.

 

Q4. What remedies are available to persons impacted by spurious liens?

A4.  Administrative and judicial remedies are available. An affected person may file a correction statement, make a demand to the alleged secured party to file a termination statement, file a termination statement him/herself, or pursue court action against the alleged secured party. Consult an attorney for specific information and advice.

 

Q5. What is a correction statement, and what does it do?

A5.  A correction statement is a document filed with the Secretary of State by a debtor disputing the validity of a recorded UCC Financing Statement that has placed an encumbrance upon real or personal property owned by the debtor.

A correction statement places searchers (usually other potential secured parties) on alert with regard to the specific lien or financing statement in question. A correction statement simply notifies other potential secured parties of the debtor’s disagreement with the alleged lien or financing statement. A correction statement does not remove or terminate a lien. Further information about correction statements can be found in section 4-9-518 of the Colorado Revised Statutes.

 

Q6. What must an affected person do to terminate a spurious lien?

A6.  In order to terminate a spurious lien or “bogus” UCC Financing Statement filing, a person must first make a “demand” upon the secured party named in the disputed filing to file a termination statement.

If the secured party fails to file or provide a termination statement, the debtor indicated on the spurious document may file a termination. For more information, see section 4-9-509(d)(2), C.R.S.

 

Q7. How does a person make a demand to a secured party to file a termination statement?

A7.  A person makes a demand on the secured party by mailing the demand to file a termination statement to the address given for the secured party in the disputed document.

 

Q8. What must a secured party do if they receive a demand from a debtor for a termination statement on a spurious lien?

A8.  If a secured party receives a demand for a termination statement from a debtor relating to an unauthorized or spurious document, a secured party must either make a termination statement available to the debtor for filing or recording, or file or record a termination statement in the filing office where the initial document was filed or recorded within twenty (20) days. Consult an attorney for specific information and advice.

 

Q9. What can a debtor do if a secured party does not respond to a demand to issue a termination statement from the debtor within twenty (20) days?

A9.  If a secured party identified in a spurious lien does not respond to a demand by the debtor named in the spurious lien by either making a termination statement available to the debtor, or filing a termination statement in the filing office where the initial document was filed within twenty (20) days, a debtor may choose to file a termination statement on his/her own. For more information, see section 4-9-509, C.R.S. Consult an attorney for specific information and advice.

 

Q10. What must a termination statement filed by a debtor on a bogus UCC Financing Statement include in order to be valid?

A10.  In order to be valid, a termination statement filed by a debtor due to non-response after a demand on an alleged secured party must include a statement that the termination statement is filed by the debtor.

Top