Conditional Waiver and Release of Claim of Lien Upon Progress Payment
Note: This summary is not
intended to be an all inclusive discussion of Oregon's construction or
mechanic's lien laws, but does include basic provisions.
What is a construction or mechanic's lien?
Every State permits
a person who supplies labor or materials for a construction project to
claim a lien against the improved property. While some states differ
in their definition of improvements and some states limit lien claims to
buildings or structures, most permit the filing of a document with the
local court that puts parties interested in the property on notice that
the party asserting the lien has a claim. States differ widely in
the method and time within which a party may act on their lien. Also
varying widely are the requirements of written notices between property
owners, contractors, subcontractors and laborers, and in some cases lending
institutions. As a general rule, these statutes serve to prevent
unpleasant surprises by compelling parties who wish to assert their legal
rights to put all parties who might be interested in the property on notice
of a claim or the possibility of a claim. This by no means constitutes
a complete discussion of construction lien law and should not be interpreted
as such. Parties seeking to know more about construction laws in
their State should always consult their State statutes directly.
Who can claim a lien in this State?
Any person performing labor
upon, transporting or furnishing any material to be used in, or renting
equipment used in the construction of any improvement shall have a lien
upon the improvement for the labor, transportation or material furnished
or equipment rented at the instance of the owner of the improvement or
the construction agent of the owner.
How long does a party have to claim a lien?
Every person claiming
a lien created under ORS 87.010 (1) or (2) shall perfect the lien not later
than 75 days after the person has ceased to provide labor, rent equipment
or furnish materials or 75 days after completion of construction, whichever
is earlier. Every other person claiming a lien created under ORS 87.010
shall perfect the lien not later than 75 days after the completion of construction.
How long is a lien good for?
No lien created under
ORS 87.010 shall bind any improvement for a longer period than 120 days
after the claim of lien is filed unless suit is brought in a proper court
within that time to enforce the lien, or if extended payment is provided
and the terms thereof are stated in the claim of lien, then 120 days after
the expiration of such extended payment, but no lien shall be continued
in force for a longer time than two years from the time the claim of lien
is filed under ORS 87.035 by any agreement to extend payment.
Does this State require or provide for a notice
from subcontractors and laborers to property owners?
Yes. a person furnishing
any materials, equipment, services or labor described in ORS 87.010 (1)
to (3), (5) and (6) for which a lien may be perfected under ORS 87.035
shall give a notice of right to a lien to the owner of the site.
A person filing a claim
of lien pursuant to ORS 87.035 shall mail to the owner and to the mortgagee
a notice in writing that the claim has been filed. A copy of the claim
of lien shall be attached to the notice. The notice shall be mailed not
later than 20 days after the date of filing.
Does this State require or provide for a notice
from the property owner to the contractor, subcontractor, or laborers?
An owner who receives
a notice of right to a lien in accordance with the provisions of ORS 87.021
may demand, in writing, from the person providing materials, equipment,
services or labor a list of materials or equipment or description of labor
or services supplied or a statement of the contractual basis for supplying
the materials, equipment, services or labor, including the percentage of
the contract completed, and the charge therefor to the date of the demand.
The supplier's statement shall be delivered to the owner within 15 days,
not including Saturdays, Sundays and other holidays as defined in ORS 187.010,
of receipt of the owner's written demand, as evidenced by a receipt or
a receipt of delivery of a certified or registered letter containing the
demand. Failure of the supplier to furnish the information requested constitutes
a loss of attorney fees and costs otherwise allowable in a suit to foreclose
a lien.
Also, every improvement
except an improvement made by a person other than the landowner in drilling
or boring for oil or gas, constructed upon lands with the knowledge of
the owner shall be deemed constructed at the instance of the owner, and
the interest owned shall be subject to any lien perfected pursuant to the
provisions of ORS 87.001 to 87.060 and 87.075 to 87.093, unless the owner
shall, within three days after the owner obtains knowledge of the construction,
give notice that the owner will not be responsible for the same by posting
a notice in writing to that effect in some conspicuous place upon the land
or the improvement situated thereon.
Does this State require a notice prior to starting
work, or after work has been completed?
The completion of construction
of an improvement shall occur when: (a) The improvement is substantially
complete; or (b) a completion notice is posted and recorded as provided
by subsections (2) and (3) of this section; or (c) the improvement is abandoned
as provided by subsection (5) of this section. When all original
contractors employed on the construction of an improvement have substantially
performed their contracts, any original contractor, the owner or mortgagee,
or an agent of any of them may post and record a completion notice.
Does this State permit a person with an interest
in property to deny responsibility for improvements?
Yes. Every improvement
except an improvement made by a person other than the landowner in drilling
or boring for oil or gas, constructed upon lands with the knowledge of
the owner shall be deemed constructed at the instance of the owner, and
the interest owned shall be subject to any lien perfected pursuant to the
provisions of ORS 87.001 to 87.060 and 87.075 to 87.093, unless the owner
shall, within three days after the owner obtains knowledge of the construction,
give notice that the owner will not be responsible for the same by posting
a notice in writing to that effect in some conspicuous place upon the land
or the improvement situated thereon.
Is a notice attesting to the satisfaction of a
lien provided for or required?
No. Oregon statutes
do not provide for or require that a lien holder who has been paid produce
or file a notice to that effect.
Does this State permit the use of a bond to release
a lien?
Yes.
The owner of an improvement or land against which a lien perfected under
ORS 87.035 is claimed, or any other interested person, may file with the
recording officer of the county in whose office the claim of lien is filed
a bond executed by a corporation authorized to issue surety bonds in the
State of Oregon to the effect that the principal or principals on the bond
shall pay the amount of the claim and all costs and attorney fees that
are awarded against the improvement or land on account of the lien. The
bond shall be in an amount not less than 150 percent of the amount claimed
under the lien, or in the amount of $1,000, whichever is greater.
