SUMMARY OF STEPS NECESSARY TO PERFECT A CONSTRUCTION LIEN IN OREGON

By Michael J. Scott

Table of Contents

• Summary of Steps to Perfect Lien
• When to Send Notice of Right to a Lien
• Considerations
• Oregon Construction Lien Checklist
• Go to Summary of Steps to Perfect a Public Works Claim
• Return to Scott Hookland Home Page

Summary of Steps to Perfect Lien

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WHEN TO A SEND NOTICE OF RIGHT TO A LIEN TO OWNER(S) AND MORTGAGEE(S)/LENDER(S)

#Information Notice to Owners may be required.
*Notice is given to protect material portion of claim. See ORS 87.025.

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CONSIDERATIONS:

1. There can be more than one owner or mortgagee on any given property. You may have a contract with one owner and not another, so you may have to look at the above chart two or three times, depending on the number of owners! The term "owner" may include lessees. See ORS 87.005(8)(c).
   
2. If you contract directly with any owner, you may or may not have to provide the Notice of Right to a Lien to the owners, but you may be required to provide the "Information Notice to Owner." See ORS 87.093.
   
3. The above "when to send" chart does not discuss "services." Services may include architectural, engineering, and land surveying services.
   
4. Consider whether to provide the notice in order to start the time periods for a notice of non-responsibility. See Miller v. Ogden, 134 Or App 589 (1995) affirmed 325 Or 248 (1997), where the Court of Appeals noted that the improvement must be built with owner's actual or imputed knowledge.
   
5. The Notice of Right to a Lien may be given at any time during the progress of the improvement, but the notice only protects the right to perfect a claim of lien for materials, equipment, labor or services provided after a date which is eight (8) days, not including Saturdays, Sundays and other holidays as defined in ORS 187.010, before the notice is delivered or mailed.
   
6. The content of a construction lien claim is very important and is outlined in ORS 87.035. A lien claim must include at least:
   
   1. A true statement of demand, after deducting all just credits and offsets;
      
   2. The name of the owner(s) or reputed owner(s);
      
   3. The name of the person who employed the claimant or to whom the claimant furnished the materials or rented the equipment;
      
   4. A description of the property to be charged with the claim of lien sufficient for identification, including the address if known;
      
   5. The claim shall be verified by the oath of the person filing or of some other person having knowledge of the facts (i.e the claimant's signature must be notarized).
      
7. There are two separate definitions of "residential" in the Oregon construction lien statutes. ORS 87.021 defines "residential building" for purposes of Notices of Right to a Lien and ORS 87.093 defines "residential construction or improvement" for purposes of Information Notices to Owners.

   The distinction between residences, of which persons can have more than one, and "domicile," of which persons can only have one, is discussed in Best Drywall, Inc. v. Berry, 672 A2d 116 (Md. App. 1996). See also generally Yogman v. Parrott, 325 Or 358 (1997).
   

8. Generally, persons or entities are entitled to perfect a lien only if they perform labor upon, furnish materials to or rent equipment to be used in the preparation of the land or the construction of the improvement at the request of an owner of the improvement or an owner's construction agent and the labor, materials or equipment were used or consumed in the construction of the improvement.
   
   Thus, to determine whether you are entitled to claim a construction lien, you must first ask if your contract is with an owner or with an owner's construction agent. "Owner" is defined at ORS 87.005 (5) and "Construction Agent" is defined at ORS 87.005(3). A construction agent can be a contractor or an "other person having charge of construction or preparation." "Contractor" is defined at ORS 87.005(4); the courts have tried to define "other person." See Nucor v. Mohr, 93 Or App 709, 712 (1988).
   
9. Oregon's construction lien law requires that certain notices be given before a claimant may perfect a claim of lien. For instance, the Notice of Right to a Lien must be in writing, delivered in person or delivered by registered or certified mail. The "Information Notice to Owner" may also be proved by a United States Postal Service Certificate of Mailing.
   
10. The Oregon Construction Contractors Board ("CCB") publishes a form of the "Information Notice to Owner." Because ORS 87.093 refers to the CCB's form for this notice, it is suggested that this form must be used in order to comply with the statute. While the statute does not require that the owner sign this form, the CCB's form includes a signature line for the owner. Thus, it is suggested that a contractor obtain the owner's signature and keep a copy of the form signed by the owner.

OREGON CONSTRUCTION LIEN CHECKLIST

NOTE: Attach copies of all supporting documents (including contracts, change orders, invoices, payments, Notices of Right to a Lien, correspondences and any other records).