Changes in Oregon Lien Law

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:

  1. Purchase title insurance with coverage to protect against possible liens;
  2. Retain sufficient funds in the closing escrow to pay any liens;
  3. Obtain a bond or letter of credit sufficient to pay any liens;
  4. Obtain written waivers from subcontractors and material suppliers; or
  5. 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.

Advertisements

One response to “Changes in Oregon Lien Law

  1. Pingback: Portland Real Estate: New Oregon Lien Law For New Construction & Remodeling | ALL ABOUT.....Portland.Oregon.Real Estate

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s