Construction Liens - Oregon

1 Construction Liens Explanation of Construction Liens Notices required How consumers can protect themselves Contractor responsibilities f:constructionlienspamphlet/7-16. Oregon Construction Contractors Board Explanation of PO Box 14140. Salem, OR 97309-5052. Construction Liens 503-378-4621, Fax: 503-373-2007. What is a Construction lien? Construction Liens have been a part of Oregon 's law for over 100 years. Under this law, anyone who constructs improvements on property, supplies materials, rents Property owners can equipment, or provides services for improvements has a right to collect payment from the property if they are be liable if the general not paid. If the general contractor is not paid or does not pay the subcontractors, laborers, material suppliers, or equipment rental companies, those persons may claim contractor does not The purpose of this pamphlet is to inform contractors a lien against the property.

2 And consumers about Oregon 's Construction lien laws. pay subcontractors, What is the purpose of the Construction The information in this pamphlet provides general lien law? answers to common questions about Construction The purpose of the law is to ensure that people are paid employees, materials Liens . for value that they add to someone's property. A bank can reclaim a car if payments are not made. Work done suppliers, and to real estate, however, is permanent and cannot be This pamphlet is divided into four sections: Explanation reclaimed. The lien laws protect those persons working equipment rental of Construction Liens , Notices required, How on the property who do not have a contract directly with the property owner (who contracted only with the consumers can protect themselves, and Contractor general contractor). companies. responsibilities. Readers are encouraged to review For purposes of the lien law, what is the all sections of the pamphlet to more fully understand difference between a general contractor Oregon 's lien laws.

3 This pamphlet should not be and a subcontractor? considered legal advice and is not a substitute for Usually, the property owner has a contract with a general, or original, contractor. The general contractor obtaining the advice of an attorney. then contracts with subcontractors to provide services such as roofing, drywall, plumbing, electrical, painting, or window installation. The property owner does not Contractors needing assistance providing notices, usually hire the subcontractors. filing Liens , or obtaining lien priority, should consult an Who can claim a lien? attorney. Some attorneys specialize in Construction General contractors, subcontractors, employees, law and may offer classes or publications relating to material suppliers, and equipment rental companies Liens . To find a Construction law attorney, contractors that do not receive payment can claim Liens . Even if the property owner pays the general contractor in full, may contact Construction industry associations, or the the subcontractors, employees, material suppliers, and Oregon State Bar Attorney Referral Service at 1-800- equipment rental companies may not be paid.

4 These 452-7636 or persons and companies may then claim a lien against the owner's property. What are the property owner's responsibili- ties to a lien holder? Property owners can be forced to pay the lien holder (the person claiming the lien) or face a potential court order to sell the property for payment. 1. Notices Required When, and how does the Information Notice to Owner about Construction Liens need to What information or warnings must be be given? given to the property owner by the general If there is a requirement for a written contract for contractor? Construction , the notice must be given on or before the Any contractor who contracts directly with a residential The Information date that the contract is signed. The notice contains Subcontractors, property owner or sells a new residence directly to the signature lines for both the contractor and the property owner must provide an Information Notice to Owner Notice to Owner about owner.

5 Delivery must be made personally, by registered employees, material about Construction Liens . Contractors can obtain the or certified mail, or by first class mail with a certificate form on the CCB website under Contractor's Tools- Construction Liens of mailing. suppliers, and Notices and Contracts. If the general contractor is the builder-owner and sells What is the purpose of an Information No- explains Oregon lien the residence within 75 days of the completion of equipment rental Construction , the notice must be delivered to the new tice to Owner about Construction Liens ? owner. It must be given at the time the builder-owner The Information Notice to Owner about Construction law and gives steps agrees to sell the property. companies usually Liens explains Oregon lien law and gives steps that property owners can take to protect themselves. It describes the rights and responsibilities of property that property owners Is there other information that owner- must provide a Notice owners and general contractors.

6 If a contractor fails builders must provide when they sell a to deliver the notice as required under the law, the can take to protect house? of Right to a Lien to contractor loses the right to claim a lien against the While not a notice requirement, under the 2003. property. Homebuyer Protection Act, a builder-owner must themselves. provide protection for the buyer against lien claims. property owners. Who must provide and receive an Information The CCB provides a form that the builder-owner should Notice to Owner about Construction Liens ? complete to show how the builder-owner has complied A contractor who contracts to construct or improve with the law. The form, Notice of Compliance with the residential property, or who constructs and sells a new Homebuyer Protection Act (HPA), is available from the residence, must give the owner or buyer the notice. CCB at or 503-378-4621. The notice must be given if the Construction contract is for more than $2,000, or if the sale of a new residence occurs within 75 days of the completion of Construction .

7 What information or warnings must be given If the property owner who contracts for Construction to the property owner by persons other than work is a licensed contractor, the notice does not have general contractors who may claim a lien? to be given. Note: residential property may include Subcontractors, employees, material suppliers, and property not occupied by the owner. equipment rental companies usually must provide a Notice of Right to a Lien to property owners in order What if the contract price is less than to claim a valid lien if they are not paid. The Notice of $2,000 but goes over $2,000 during the job? Right to a Lien is available online at If the contract goes over $2,000 during Construction , the ccb under Contractor Forms. Information Notice to Owner about Construction Liens must be mailed or delivered no later than five days after the contractor knows that the contract exceeds $2,000.

8 2 3. What is the purpose of a Notice of Right to How consumers can a Lien? A Notice of Right to a Lien lets the property owner protect themselves know of the possibility that a lien could be placed on their property by subcontractors, employees, material What can I do after receiving an Information suppliers, and equipment rental companies who are Notice to Owner About Construction Liens not paid. A Notice of Right to a Lien gives the property or a Notice of Right to a Lien? owner the name of the person who ordered the services Sending a Notice of These notices list several ways to protect yourself from The Information or materials. It also gives the name of the subcontractor, having a lien filed on your property: employee, material, equipment, or service provider Right to a Lien is not One way is to issue joint checks. A check Notice to Owner and describes the materials, equipment, or services ordered.

9 Can be written jointly payable to the contractor the same as filing a and to the subcontractor, material supplier, About Construction or any other party who gave the property owner Who must provide and receive a Notice of lien claim. a Notice of Right to a Lien. Be aware that many Liens and the Notice Right to a Lien? banks will not accept checks made payable to Unless the material, equipment, services, or labor were multiple parties unless each party appears at the requested by the property owner, the subcontractors, bank with government-issued identification at the of Right to a Lien, employees, material suppliers, and equipment rental time of deposit. companies provide a Notice of Right to a Lien to the property owner. If a person provides labor or labor and list ways for property Another way is to use lien waivers or materials for a commercial improvement, a Notice of releases. Before you make any payments to Right to a Lien does not need to be given.

10 A commercial your contractor, ask every person who gave owners to protect improvement is a structure or building that is not you a Notice of Right to a Lien to provide you intended for occupancy as a residence. with a signed lien waiver or release. Contact themselves. an attorney for more information on using lien When and how does the Notice of Right to waivers or releases. a Lien need to be given? The Notice of Right to a Lien may be given at any time Do I have any additional rights when I. during the Construction , but it should be given within receive a Notice of Right to a Lien? eight working days of the start date of the work or Yes. A property owner who receives a Notice of Right the delivery date of the materials or equipment. If to a Lien may send a letter to the person who delivered the notice was delivered to the property owner on day the notice demanding: nine, then the subcontractor or materials provider would a list of materials or equipment, or not be entitled to payment for anything that occurred a description of labor or services supplied, or on the first day of the job.