a:\newslw.96 [4]Alan Lee MitchellStephen De'ak201998-11-09T22:36:00Z2006-07-01T22:25:00Z2006-07-01T22:25:00Z112397067 5816829011.8026 FURRER & SCOTT LLCConsider . . .VOL. 7, ISSUE 4 October, 1998Law OfficesFURRER & SCOTT LLC9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4540 -- (800) 334-8986 -- FAX: (503) 620-4315www.furrer-scott.comHOME SOLICITATION SALESDo you ever make sales of consumer goods or services at a location other than your office? If so, then you may be subject to either the Oregon Homes Solicitation Sales Act or the Federal Trade Commission Rules on Door to Door Sales.One of the most significant aspects of these laws is that they provide the consumer with a right to cancel the transaction within a certain period, normally three days after the date of the sale. This could create a problem if you have already ordered the goods (for example, carpeting or blinds). In that case, you may be stuck with the goods and no buyer.The Oregon Act applies to the sales of goods or services in the amount of $25 or more in which the seller personally solicits the sale at a residence other than the seller’s. The FTC Rules apply to similar sales with the difference that the sale need only occur at some location other than the seller’s place of business.Neither law applies when the customer first visits your place of business and you then conclude the transaction at another location.Under the FTC Rules, you must provide two copies of a specific Notice of Right to Cancel; the form of this Notice is mandated by the Rules. The Oregon Act also requires that you provide certain cancellation information to the consumer.A failure to provide the specific cancellation information means that the consumer’s right to cancel is no longer limited to the three day period. In this case, the cancellation right continues indefinitely. Again, this could be a nasty surprise if you have already purchased specialized materials.If you believe that there is any possibility that these laws could apply to your business, please contact competent counsel for further information.FLOW-DOWN LIEN WAIVERSEveryone has heard of lien waivers. Often, they are required when you are given a check after having performed some portion of a job. What you may not know is that it is possible to impact, and possibly waive altogether, your construction lien rights in your contract or subcontract even before you begin a job.This can occur as a result of what is known as a “flow-down” clause. A typical flow-down clause states that a subcontractor agrees to be bound by the terms and conditions of the agreement between the prime contractor and the owner.What makes these clauses particularly troublesome for subcontractors is that, before signing its subcontract, the subcontractor almost never has an opportunity to review those other agreements by which it will be bound.Of course, you should also carefully scrutinize any contract presented to you to determine whether that contract itself includes any waiver of your lien rights.Another term that can impact your lien rights is a subordination clause. Subordination clauses can provide that your lien rights will be junior to the rights of others. These clauses may be found in lending agreements in which the parties agree that the lender’s rights will be superior to the other parties’ rights.Generally, you do not have to worry about someone else’s contract waiving your lien rights. Under Oregon law, a clause in the owner-prime contractor contract may not waive a subcontractor’s lien rights. Lien waiver clauses must be expressly consented to by the subcontractor.However, as demonstrated by a recent case in Connecticut, Snydergeneral Corp. v. Lee Parcel 6 Assoc. Limited Partnership, 681 A.2d 1008 (Conn. Ct. App. 1996), the lien waiver clause may be written in such a manner that you are not aware that you may be waiving all of your construction lien rights.In the Connecticut case, the subcontractor’s contract with the prime contractor included clauses requiring the subcontractor to provide lien waivers from all of the subcontractor’s labor and material suppliers for all work covered in the previous month’s pay request. The contract also contained a clause whereby the subcontractor expressly waived its own lien rights.The court rejected the subcontractor’s argument that these clauses only required it to provide partial lien waivers as the work progressed. Instead, the court ruled, the subcontractor had waived all of its construction lien rights, whether made on its own behalf or on behalf of its suppliers.Thus, be careful with any contract that is presented to you for signing. If you have any doubts or questions, please consult with competent legal counsel before you sign any contract.NEW LEAD PAINT RULESThe federal Environmental Protection Agency (“EPA”) recently issued amendments to its rules concerning lead paint in existing buildings. These new rules have the potential to impact an extremely broad range of contractors. In addition, violations of these rules can result in serious penalties.The previous EPA rules were discussed in the January, 1997 edition of Consider…. Those rules primarily impacted owners and sellers of residential real estate constructed before 1978.The new rules now regulate “renovators,” defined as “any person who performs for compensation a renovation.” A “renovation” is defined as any work that results in the disturbance of a painted surface. With such a broad definition, these rules could apply to virtually any person who is paid to do repainting, remodeling or other similar work in a residence built before 1978.The new rules require renovators to distribute notification pamphlets to owners before performing any work. Renovators must also ensure that tenants receive notice of the work. For multiple-occupancy buildings, the renovator may need to deliver notice to each tenant. Renovators must keep records of their compliance with these rules for at least three (3) years following completion of the work.The pamphlets must be delivered at least seven (7) days before commencement of the renovation work. Delivery can be accomplished in one of three ways: by personal delivery to the owner or a responsible adult in the house, by self-certification for unsuccessful personal deliveries, or by a certificate of mailing from the Post Office.Single copies of these pamphlets can be obtained by calling 1-800-424-LEAD and multiple copies can be obtained by calling (202) 512-1800. Renovators may reproduce these pamphlets so long as the pamphlet is copied in its entirety. Request the pamphlet “Protect Your Family From Lead in Your Home,” which is also known as GPO stock #055-000-00507-9.Violations of these new rules may result in criminal and civil penalties of up to $25,000 per violation. In addition, the failure to comply is a violation of other federal environmental statutes.While these new rules do not officially go into effect until June 1,1999, prudent contractors may wish to begin initiating these procedures as soon as possible.FIRM NEWS:MICHAEL J. SCOTT spoke on “Oregon Construction Lien and Bond Claims” to the Portland Chapter of the National Association of Credit Managers on September 25, 1998.MARK YOUR CALENDARS for December 10, 1998 when MICHAEL J. SCOTT, DOUGLAS R. HOOKLAND and ALAN L. MITCHELL, in connection with Lorman Seminars, will be conducting an all day seminar on Oregon and Washington construction lien and bond claims. If you would like a brochure about the seminar, please contact Gayle L. Allen at Furrer & Scott LLCRANDOM THOUGHTS:“The judicial system is the most expensive machine ever invented for finding out what happened and what to do about it.” Irving R. Kaufman.This newsletter is published quarterly by the law firm of Furrer & Scott LLC for the benefit of its clients and friends and is intended to inform them about legal matters of interest. While this information is meant to be current, we do not promise or guarantee that the information is correct, complete or up-to-date. This information is not intended to be, and should not be considered to be, legal advice. No actions should be undertaken in reliance hereon without professional legal counsel. Alan L. Mitchell, Editor