This information is provided for informational purposes only. It should not be considered to be legal advice. The LCB strongly advises you to consult an attorney for specific legal advice on filing or enforcing liens.
Contractors needing assistance providing notices, filing liens, or obtaining lien priority, should consult an attorney. Some attorneys specialize in construction law and may offer classes or publications relating to liens. To find a construction law attorney, contractors may contact construction industry associations, or the Oregon State Bar Attorney Referral Service at 1-800-452-7636 or www.osbar.org/public
What is a construction lien?
Construction liens have been a part of Oregon’s law for over 100 years. Under this law, anyone who constructs improvements to property, supplies materials, rents equipment, or provides services for improvements has a right to collect payment from the property if they are not paid. If the contractor is not paid or does not pay the subcontractors, laborers, material suppliers, or equipment rental companies, those persons may claim a lien against the property.
What is the purpose of the construction lien law?
The purpose of the law is to ensure that people are paid for value that they add to someone’s property. A bank can reclaim a car if payments are not made. Work done to real estate, however, is permanent and cannot be reclaimed. The lien laws protect those persons working on the property who do not have a contract directly with the property owner (who contracted only with the general contractor).A construction lien is a claim upon property for money owed to a contractor, material supplier or anyone who supplied labor or materials for improvements to the property.
Information Notice to Owner about Construction Liens
If a contractor fails to deliver the notice as required under the law, the contractor loses the right to claim a lien against the property. The notice must be given if the construction contract is for more than $2,000 or when the job charges go over $2,000. If the contractor fails to provide it to the property owner, the contractor loses lien rights. Note: “residential property” may include property not occupied by the owner.
The LCB does not regulate liens. LCB licensees that wish to have lien access must use forms supplied by the CCB.
Notice of Right to a Lien
Subcontractors, employees, material suppliers, and equipment rental companies usually must provide a Notice of Right to a Lien to property owners in order to claim a valid lien if they are not paid. A Notice of Right to a Lien lets the property owner know of the possibility that a lien could be placed on their property by subcontractors, employees, material suppliers, and equipment rental companies who are not paid.
Who sends what notice to property owners?
- If you contract directly with an owner of residential property, you must provide the Information Notice to Owner about Construction Liens.
- If you have no direct contract with an owner of property, and you wish to have a right to file a lien, you must send a Notice of Right to a Lien to the property owner. There are some exceptions.
Where can I get copies of the Information Notice to Owner About Construction Liens?
Licensed contractors may download and print copies from the CCB website, or call the CCB and request a copy. LCB licensees must use these forms.
How do I go about filing a lien?
Consult an attorney. A lien involves a notary, legal description, recording fee, several deadlines, and extensive paperwork. If anything in the process is not done correctly, the lien may be invalid, or you could lose your right to collect attorney fees should you have to foreclose on the lien.
What is the deadline for filing a lien? What if I file the lien after that deadline?
You have 75 days to file a lien from:
- The date you last worked or delivered materials to the property, or
- The date of substantial completion of the construction, whichever date came first.
The lien will be invalid and cannot be enforced if it is filed more than 75 days after the above dates.
The requirements for pursuing a lien are so strict. Why?
Foreclosure of a lien is a serious matter – someone can lose his or her property. The strict requirements are intended to prevent abuses which may result in homeowners having to pay twice for the same materials, equipment, services, or labor.
Where are liens filed?
Liens are filed with the recording officer of the county where the work was performed.
What are the most important things for a contractor to do in order to file a valid residential lien?
- The contractor must be licensed with the LCB, and
- The contractor must give the property owner an Information Notice to Owner About Construction Liens if it is required, and
- The lien must be filed within 75 days of the last day labor was provided or materials furnished.
What is important for a subcontractor, material supplier, or equipment rental company to do in order to file a valid residential lien claim?
Send the Notice of Right to a Lien by registered or certified mail, or deliver it in person within eight working days of starting the work or providing the materials or equipment.
Where can I get more information about Oregon’s lien laws?
You may wish to contact an attorney or review Oregon’s Lien Law, found in ORS Chapter 87.