Late Fees on Invoices in Colorado
What Colorado contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
8% per annum (default legal rate); 1.5% per month by contract
Small Claims Limit
$7,500
Small Claims Court (County Court)
Mechanics Lien Deadline
4 months from completion for GCs; 2 months for subs after a Notice of Intent is served
Colorado Prompt Payment Act
Colorado Prompt Pay Act, C.R.S. § 24-91-103
Colorado requires public entities to pay within 45 days. Private construction follows the contract, with the Construction Trust Fund Statute providing additional protections.
Late fee rules for Colorado invoices
Colorado allows contractual late fees. The Construction Trust Fund Statute (C.R.S. § 38-22-127) makes it a criminal offense to misapply construction funds.
Colorado's legal interest rate is 8% per annum. Contracts can specify higher rates. The Prompt Pay Act adds 15% per annum on government contracts.
Important disclaimer
This page provides general information about Colorado late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in Colorado.
Demand letters and mechanics liens in Colorado
Colorado requires a Notice of Intent to File Lien at least 10 days before filing. This serves as a demand letter equivalent.
Mechanics lien deadline: 4 months from completion for GCs; 2 months for subs after a Notice of Intent is served.
Sample late fee clause for Colorado invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (8% per annum (default legal rate); 1.5% per month by contract maximum per Colorado law) will be applied to all balances remaining unpaid after the due date. Pursuant to the Colorado Prompt Pay Act (C.R.S. § 24-91-103), the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $7,500 in Small Claims Court (County Court)), and referral to collections.”
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Start Free TrialFrequently asked questions — Colorado
What is the maximum late fee I can charge on an invoice in Colorado?▾
In Colorado, Colorado's legal interest rate is 8% per annum. Contracts can specify higher rates. The Prompt Pay Act adds 15% per annum on government contracts. Always disclose late fee terms in your contract or invoice before work begins.
Does Colorado have a prompt payment act?▾
Yes. Colorado requires public entities to pay within 45 days. Private construction follows the contract, with the Construction Trust Fund Statute providing additional protections.
What is the small claims court limit in Colorado?▾
The small claims court limit in Colorado is $7,500. Claims are filed in Small Claims Court (County Court). You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in Colorado?▾
In Colorado, 4 months from completion for GCs; 2 months for subs after a Notice of Intent is served.
Do I need to send a demand letter before filing a lien in Colorado?▾
Colorado requires a Notice of Intent to File Lien at least 10 days before filing. This serves as a demand letter equivalent.