Construction Liens in Oregon
Contents
Overview
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
A perfected construction lien (see Perfecting Lien section), filed by the following persons shall take priority over any lien, mortgage or other encumbrance which, a) attached to the real property after the construction lien was recorded, or b) was unrecorded at the time of commencement of the construction.
1) A person who engages in or rents equipment for the preparation of a lot or parcel of land, or improves or rents equipment for the improvement of a street or road adjoining a lot or parcel of land at the request of the owner of the lot or parcel;
- To retain priority, notice of a claim must be given to the mortgagee no later than eight (8) days after delivery for which a lien may be claimed.
or
2) A landscape architect, land surveyor or other person who prepares plans, drawings, surveys or specifications that are used for the landscaping or preparation of a lot or parcel of land or who supervises the landscaping or preparation.
(1) A lien created under ORS 87.010(2) or (6) and perfected under ORS 87.035, upon any lot or parcel of land shall be preferred to any lien, mortgage or other encumbrance which attached to the land after or was unrecorded at the time of commencement of the improvement. (2) a lien created under ORS 87.010(1), (4) or (5) and perfected under ORS 87.035, upon any improvement shall be preferred to all prior liens, mortgages or other encumbrances upon the land upon which the improvement was constructed. (2015 ORS 87.025(1) and (2))
Condominiums
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.
Other
Bonding Around a Construction Lien. A perfected construction lien may be removed from the land or improvement by posting a bond or cash deposit. The bond or cash deposit must be 150% of the amount of the lien claim or $1,000, whichever is greater.
