Construction Contractors Board News Release December 29, 2010
A new law sponsored by the State of Oregon, House Consumer Protection and Government Accountability Committee, (HB 3689) becomes effective January 1, 2011.
The new laws will have a significant impact on:
- Material Suppliers and Subcontractors,
- Home Builders and Remodelers.
Material Supplier and Subcontractor Lien Rights
Material suppliers and subcontractors that provide material, labor or equipment for renovation, remodel or repair on an existing owner-occupied residence are prohibited from perfecting a lien on a home owner’s property if the contractor they provided the material, labor or equipment to is unlicensed.
Contractors can help protect their lien rights by utilizing the e-Watch feature of their CCB myLicense account to monitor the licenses of contractors they subcontract to. Contractors using e-Watch are automatically notified when the status of the license they are monitoring changes. Licensed contractors can register for a CCB myLicense on the CCB website. CCB myLicense and e-Watch are an available benefit of your CCB license.
The CCB is working to expand the feature to material suppliers, or others that typically do not have a CCB license. There will likely be a small annual fee. As always, the status of a CCB license can be checked online at www.oregon.gov/CCB.
Contractors that build (or remodel) and sell
Contractors that sell newly built homes or condos, or homes or condos that have had a recent, major remodel can no longer obtain as a method of lien protection, a waiver of the lien protection rights from a buyer.
In 2003, lawmakers enacted the Oregon Homebuyer Protection Act (HPA) requiring the seller of a new home, or a recently remodeled home that had $50,000 or more in improvements, to complete a “Notice of Compliance with the HPA” form indicating the action they will take to provide protection for the buyer from lien claims.
Beginning January 1, 2011, a seller can:
- Purchase title insurance with coverage to protect against possible liens;
- Retain sufficient funds in the closing escrow to pay any liens;
- Obtain a bond or letter of credit sufficient to pay any liens;
- Obtain written waivers from subcontractors and material suppliers; or
- Complete the sale at least 75 days after the completion of all construction.
These five options remain unchanged. The law removed a sixth option which was the ability of the seller to obtain a waiver of these protection requirements from the buyer.
The “Notice of Compliance with the HPA” form is available to download from the CCB website under Contractor Forms/Other Important Forms.
Contractors can find more information about the Home Buyer Protection Act by visiting, www.oregon.gov/ccb. Click on Contractor Help, then Residential Contractors: Help Staying Legal.
The CCB is a state agency licensing more than 39,000 contractors. Anyone who is paid to repair, improve or build a home must be licensed by the CCB. For more information, visit, www.oregon.gov/CCB or call 503-378-4621.