Search/Exam • There is no marketable record title act in Oregon, no minimum required period of time for a title search, and no other applicable title examination standards.
• The only requirements are that, before a title insurer or its agent can insure a transaction, it must operate a title plant in the county where the real property is located or purchase title insurance from a company that does, ORS 731.438(1), and such title plant must cover a period of at least the immediately-preceding 50 years, except for the years before 1960. ORS 731.438(1).
• The Oregon Rating Manual (“Rating Manual”), published by the Oregon Title Insurance Rating Organization (“OTIRO”), provides in Section 2.003 that an additional chain charge of $100 must be added to the applicable insurance rate when the examination of title covers two different series of successive transfers (chains) of the parcels comprising the subject property. When the examination covers more than two different chains, a charge of $50.00 must be added for each additional chain exceeding the two chains, up to a maximum of $500.00 for all additional chains.
Cancellation Charge • The Rating Manual, in Section 2.009, requires that a reasonable charge of not less than $200 be imposed for the cancellation of an order for 1-4 family residential title insurance, unless the charge may be waived under one of the circumstances outlined in that section.
Unauthorized Practice of Law • ORS 9.160 provides that, except as provided in the statute, a person may not practice law or represent that the person is qualified to practice law in Oregon, unless the person is an active member of the Oregon State Bar.
• Subsection (4) of that statute contains the following carve out to the general prohibition: “(4) A title insurer authorized to do business in this state, a title insurance agent licensed under the laws of this state or an escrow agent licensed under the laws of this state is not engaged in the practice of law in this state in violation of … this section if, for the purposes of a transaction in which the insurer or agent provides title insurance or escrow services, the insurer or agent: (a) Prepares any satisfaction, reconveyance, release, discharge, termination or cancellation of a lien, encumbrance or obligation; (b) Acts pursuant to the instructions of the principals to the transaction as scrivener to fill in blanks in any document selected by the principals; (c) Presents to the principals to the transaction for their selection any blank form prescribed by statute, rule, ordinance or other law; or (d) Presents to the principals to the transaction for their selection a blank form prepared or approved by a lawyer licensed to practice law in this state for one or more of the following: (A) A mortgage. (B) A trust deed. (C) A promissory note. (D) An assignment of a mortgagees interest under a mortgage. (E) An assignment of a beneficial interest under a trust deed. (F) An assignment of a sellers or buyers interest under a land sale contract. (G) A power of attorney. (H) A subordination agreement. (I) A memorandum of an instrument that is to be recorded in place of the instrument that is the subject of the memorandum. (5) In performing the services permitted in subsection (4) of this section, a title insurer, a title insurance agent or an escrow agent may not draft, select or give advice regarding any real estate document if those activities require the exercise of informed or trained discretion.”
• The remaining pertinent subsections of the statute set forth that: (i) In performing the permitted services, a title insurer, a title insurance agent or an escrow agent may not draft, select or give advice regarding any real estate document if those activities require the exercise of informed or trained discretion.
(ii) The exemption does not apply to any acts relating to a document or form that are performed by an escrow agent under subsections (4)(b), (c) or (d) unless the escrow agent provides to the principals to the transaction a notice in at least 12-point type in the form set forth in subsection (6) of the statute.
(iii) The exemption does not apply to any acts relating to a document or form that are performed by an escrow agent under subsection (4)(b), (c) or (d) of this section for a real estate sale and purchase transaction in which all or part of the purchase price consists of deferred payments by the buyer to the seller unless the escrow agent provides certain items specified in subsection (7) to the principals to the transaction.
Vesting • In Oregon, title may be held by:
An Individual - An individual may hold title in his or her name only, regardless of whether or not he/she is married – e.g. “Jane Smith, an individual”.
Tenants by the Entirety - A conveyance to a husband and wife creates a tenancy by the entirety, unless the conveyance expressly declares otherwise – e.g. “John Smith and Jane Smith, husband and wife, as tenants by the entirety”. A husband and wife may also take title as tenants in common (discussed below).
Tenants in Common - A conveyance to two or more persons who are not married creates a tenancy in common in which each has (unless otherwise stated) an equal undivided interest in the property, unless the conveyance expressly declares that the parties intend to create a survivorship estate (discussed below) – e.g. “John Smith and Robert Jones, as tenants in common, each as to an undivided 50% interest”.
A Survivorship Estate - It is possible for two or more persons who are not married to hold title as tenants in common with a right of survivorship, as long as the survivorship declaration is expressly contained in the deed – e.g. “John Smith and Robert Jones, as tenants in common with right of survivorship”. A Life Estate – A life estate is typically created to protect a person’s right to live on property during that person’s lifetime and, on that person’s death, to have the property pass to another – e.g. “Jane Smith, for the term of Jane Smith’s life, then to Stephanie Smith”.
Registered Domestic Partners - Registered domestic partners may take title as (i) tenants in common– e.g. “Jane Smith and Mary Jones, registered domestic partners, as tenants in common, each as to an undivided 50% interest”, or (ii) in a survivorship estate similar to that of a tenancy by the entirety – e.g. “Jane Smith and Mary Jones, as registered domestic partners with right of survivorship”.
A Same Sex Married Couple - Same sex married couples may take title as (i) tenants in common – e.g. “John Smith and Robert Smith, a married couple [or “husband and husband” or “wife and wife” if females], as tenants in common, each as to an undivided 50% interest”, or (ii) in a survivorship estate similar to that of a tenancy by the entirety – e.g. John Smith and Robert Smith, a married couple [or “husband and husband” or “wife and wife” if females] with right of survivorship, or (iii) as tenants by the entirety – e.g. “John Smith and Robert Smith, a married couple [or “husband and husband” or “wife and wife” if females], as tenants by the entirety”.
An Entity - A registered entity, such as a corporation, limited liability company or partnership, may hold title. Title should be held exactly as the name is registered with the Oregon Secretary of State – e.g. “Smith & Jones, LLC, an Oregon limited liability company”.
In a Representative Capacity - Title may sometimes be held by an individual or an entity in his/her or its representative capacity, such as the trustee of a trust – e.g. “John Smith, Trustee of the Mary Jones Trust”. However, personal representatives of decedents do not hold title, which remains in the decedent’s estate, even though the personal representative is typically shown as the grantor of the estate’s deed by common practice in Oregon. Likewise, guardians and conservators do not hold legal title, which remains in the incapacitated person.
Standard Exceptions • Oregon utilizes the following standard exceptions (see Section 1.002 of the Rating Manual):
1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records; proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records.
2. Facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making inquiry of persons in possession thereof.
3. Easements, or claims of easement, not shown by the public records; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to water.
4. Any encroachment (of existing improvements located on the subject land onto adjoining land or of existing improvements located on adjoining land onto the subject land), encumbrance, violation, variation, or adverse circumstance affecting the title that would be disclosed by an accurate and complete land survey of the subject land.
5. Any lien, or right to a lien, for services, labor, material, equipment, rental or workers compensation heretofore or hereafter furnished, imposed by law and not shown by the public records.
• Section 5.001 of the Rating Manual addresses the additional charges that must be made for an owner’s policy with one or more of the standard exceptions eliminated or modified.
Spousal Joinder Requirement • Execution of a deed or security instrument by a non-title holding spouse is not required in Oregon.
Permissible Deed of Trust Trustees • Only the following parties are eligible to act as a trustee under a trust deed encumbering Oregon real property (ORS 86.713(1)(b)):
(A) An attorney who is an active member of the Oregon State Bar or a law practice that includes an attorney who is an active member of the Oregon State Bar;
(B) A financial institution or trust company, as defined in ORS 706.008, that is authorized to do business under the laws of Oregon or the United States;
(C) A title insurance company or a subsidiary, affiliate, insurance producer or branch of the title insurance company that is authorized to insure title to real property in Oregon;
(D) The United States or any agency of the United States; or
(E) An escrow agent that is licensed under ORS 696.505 to 696.590.
• If the trustee is an entity described in (B) or (C) above, the entity must either (1) be registered with or obtain a certificate of authority to transact business from the Oregon Department of Consumer and Business Affairs, or (2) obtain a certificate of authority to transact business as a foreign business entity from the Oregon Secretary of State. ORS 86.713(1)(c).
• It is customary for the title insurer to be named as the trustee on Oregon deeds of trust.
Powers of Attorney • The Oregon statutes dealing with powers of attorney (“POAs”) are set forth in ORS 127.002-127.045 and ORS 93.670.
• Oregon recognizes both general and special powers of attorney. A power of attorney gives one person the right to act in the place of another for all purposes (general) or for specified purposes (special). However, unless otherwise provided in the power-of-attorney document, an attorney-in-fact or an agent “must use the property of the principal for the benefit of the principal.” ORS 127.045.
• A POA becomes effective when it is executed (unless a “springing” POA is intended), and the powers of the attorney-in-fact are not affected by the passage of time. ORS 127.005.
• The power of attorney is revoked when the death of the principal is known to the person acting on it, when a revocation of the power of attorney is filed in the office where it was originally recorded, or when the power of attorney specifies it is to be revoked. ORS 127.015(1)–(2), ORS 93.670(2).
• A power of attorney is durable; that is, it survives the incompetency of the principal unless the writing contains words stating otherwise. ORS 127.005(1).
• When a POA is used to transfer interests in Oregon real property, it is customary to record the original or a certified copy of the POA in the real property records of the county in which the real property is located. Having the POA recorded reduces the risk that the POA has been revoked by a physical act and that the attorney-in-fact has no continuing power to act. This is because, by statute in Oregon, once recorded, a POA cannot be revoked unless an instrument containing such revocation is also recorded in the same office. ORS 93.670.
• Oregon is a direct lien state. This means that claimants who comply with the necessary notice and filing provisions have the direct right to file a lien claim even if the person with whom they have a contract (such as the general contractor or higher-tier subcontractor) has been paid.
• The individuals and entities for whom construction lien claims are created are set forth in ORS 87.010. If a lien is created for a person who is not enumerated in ORS 87.010, that lien cannot be subsequently perfected and foreclosed. See ORS 87.035(1), 87.060.
• Oregon construction lien law requires a variety of notices. A potential lien claimant must provide some notices before recording a construction lien claim; other notices must be provided after recording a lien claim. See ORS 87.001 to 87.060 and 87.075 to 87.093.
• A person claiming a construction lien for providing labor, renting equipment, or furnishing materials must file a claim of lien within 75 days after ceasing to provide labor, equipment, or materials or 75 days after construction is completed, whichever is earlier. ORS 87.035(1). Persons claiming liens pursuant to ORS 87.010(4)–(6) must file their claims not later than 75 days after the construction is completed. ORS 87.035(1).
• A suit to foreclose a claim of lien must be commenced while the lien binds the property. A claim of lien binds property for only 120 days after its filing or for 120 days after the expiration of an extended payment agreement set forth in the claim of lien. However, no claim of lien can bind property for more than two years after the lien has been filed. ORS 87.055.
• A perfected construction lien may be removed from the land or an improvement by the owner’s or other interested person’s posting a valid bond or cash deposit at any time after the claim of lien is filed. ORS 87.076(1), (3). The bond must be filed with the recorder of the county where the claim of lien is filed and must be 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. ORS 87.076 (1).
• In lieu of the bond, the owner of the improvement or property or other interested party may make a cash deposit with the treasurer of the county where the claim of lien is filed. ORS 87.076(2)(a). The bond or cash deposit must be 150% of the amount of the lien claimed, or $1,000, whichever is greater. ORS 87.076(1), (2)(a).
• Priorities: A construction lien claim under ORS 87.010(1), (4), or (5) has priority over all prior liens, mortgages, or encumbrances on the land on which the improvement was constructed. ORS 87.025(2). The priority of these construction claims, however, is limited to priority as against the improvement, not the land on which it is situated.
Furthermore, under the general principle of first-in-time, first-in-right, construction lien claims under ORS 87.010(1), (4), and (5) have priority over subsequently recorded liens, encumbrances, or mortgages.
The general rule of ORS 87.025(2) is subject, however, to the exceptions of ORS 87.025(3) and (6). Under ORS 87.025(3), a construction lien claimed for materials will not have priority as to the amount of materials claimed unless the lien claimant has provided a notice substantially similar to the Notice of Right to a Lien to the mortgagee over which priority is claimed. The notice must be given not later than eight (8) days, not including Saturdays, Sundays, and other holidays as defined in ORS 187.010, after the date of delivery of materials for which a lien may be claimed. ORS 87.025(3).
A construction lien under ORS 87.010(1), (4), or (5) has priority over prior liens, mortgages, and encumbrances only when the claimant has participated in the original construction of an improvement. ORS 87.025(6).
• Section 5.002 of the Rating Manual, among other things, deals with the additional charge to be imposed (commonly referred to as an “early issue” charge) when an owner’s or loan policy is issued after completion of construction but prior to expiration of the 75-day period for the filing of construction liens.
Instrument Requirements • Witnesses are not required on either deeds or security instruments.
• County recording officers can refuse to record a document if it is not legible, ORS 205.130(2), and proper notarial acknowledgments are required for recorded documents. ORS 205.130(2)(a). If the notary block complies with Oregon law or the law of the state in which the notary is taken, it will be sufficient for recording in Oregon. Oregon acknowledgment forms are set forth in ORS 194.285.
• All instruments must be typed, written, or printed in 8-point type or larger on paper that is not larger than 14 inches long and 8-1/2 inches wide and which paper is of sufficient quality for recording photographically.
• There must be enough space for the recording sticker (4" x 2") to be placed in the upper right corner on the first page of the document.
• The first page of the instrument must contain at least (i) the name of the transaction (ORS 205.236), (ii) the names of the persons described in ORS 205.160, (iii) the person to whom and the address to which the recorded instrument should be delivered (ORS 205.180), (iv) the true and actual consideration paid for the transfer (ORS 93.030), (v) the person to whom and the address to which all tax statements should be sent (ORS 93.260), (vi) for County Clerk Lien Records, the information described in ORS 205.125 (1)(c) and (e), and (vii) for instruments that assign a mortgage or trust deed, the name and address of the assignee.
• As noted above, for instruments conveying or contracting to convey fee title to any real estate and all memoranda of such instruments, the true and actual consideration paid for such transfer must be stated, unless the actual consideration consists of or includes other property or other value given or promised, in which event it must only be noted on the face of the instrument that other property or value was either part or the whole consideration.