Construction Liens in Oregon
Contents
Overview
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.
Construction liens in Oregon are also referred to as "Mechanic's liens" throughout the Oregon Revised Statutes.
Sources
Statutory Liens - ORS §§ 87.001 et seq.
Authorized Claimants
For the purposes of construction of any improvement upon real property at the instance of the property owner or construction agent of the owner, the following people may file a construction lien:
- Any person performing labor related to the construction;
- Any person transporting or furnishing any material to be used in the construction;
- Any person who engages in or rents equipment for construction purposes; or
- An architect, landscape architect, land surveyor or registered engineer who prepares plans, drawings, surveys or specifications that are used for the construction.
Lien Priority
Perfected construction liens take priority over all encumbrances, except for prior recorded mortgages or trust deeds that are not given to secure a loan made to finance the subject alteration or repair.
Notices and Registries
There is a specific process in which the claimant must give notice of the construction lien.
- A notice in writing must be mailed to the property owner and the mortgagee notifying them that the claim has been filed;
- A copy of the lien must be attached to the notice; and
- The notice shall be mailed not later than 20 days after the date of filing.
Specific Notice Provision for Materials or Supplies
No lien for materials or supplies shall have priority over any recorded mortgage or trust deed unless notice is given to the mortgagee within eight (8) days after the date of delivery of materials or supplies.
Perfecting a Lien
A construction lien shall be perfected not later than 75 days after ceasing to provide labor, rent equipment, furnish materials or prepare plans, drawings, surveys, etc. or 75 days after completion of construction, whichever is earlier.
To perfect a construction lien, a claim must be filed with the recording officer of the county in which the real property is located.
The claim must contain:
- A statement of demand;
- The name of the owner of the property;
- The name of the person by whom the claimant was employed; and
- A description of the property to be charged with the lien, including the address if known.
Note that a legal description is not required. The claim must also include a verified oath by the claimant or someone having knowledge of the facts by penalty of perjury.
Enforcement Deadlines
A construction lien encumbers real property for 120 days after the claim of lien is recorded with the county, unless a lawsuit is filed to enforce the lien within that time frame.
However, if there are terms of extended payment provided in the claim of lien, then the construction lien will encumber the real property for 120 days after the expiration of the extended terms, but no longer than two years from the time the claim of lien is filed.
Releases
1. Bond
A property owner may remove a perfected construction lien from the land or improvement by filing a bond with the county recorder's office or depositing a cash deposit with the county treasurer. The bond or cash deposit must be 150% of the amount of the lien claim or $1,000, whichever is greater. The bond or deposit may be made at any time after the claim of lien is filed.
Notice of filing a bond or deposit of money shall be served upon the lien claimant within twenty (20) days of the filing or deposit. If notice is not given as required, the bond or deposit is of no effect.
2. Release
A release of a construction lien may also be recorded with the county. It must reference the original construction lien recording document information and property that is subject to the lien. It must state the lien is paid in full and that the construction lien is released. It must also be signed by the original lien claimant.
Other
Section 5.002 of the OTIRO Rating Manual, 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.
