75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1677
A-Engrossed
House Bill 2366
Ordered by the House April 28
Including House Amendments dated April 28
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of House Interim Committee on
Consumer Protection)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Establishes Residential Structure Lien Assistance Fund.
Provides for Construction Contractors Board to administer fund.
Continuously appropriates fund moneys to board. Requires board to
replenish fund as necessary by imposing surcharge on application
for issuance or renewal of residential construction contractor
endorsement. Limits surcharge amount. - }
{ - Allows capped payouts from fund to certain lien claimants
if residential structure owner has paid residential construction
contractor, but contractor has failed to pay lien claimant.
Requires lien claimant accepting payment from fund to file
satisfaction of judgment or satisfaction of lien. - }
{ - Appropriates moneys from General Fund to Residential
Structure Lien Assistance Fund for 2009-2011 biennium. Requires
repayment from Residential Structure Lien Assistance Fund to
General Fund no later than June 30, 2011. Provides for assessment
of special surcharge on application for issuance or renewal of
residential construction contractor endorsement during 2009-2011
biennium. Provides for first payment from fund to occur during
calendar year 2010. - }
{ - Declares emergency, effective July 1, 2009. - }
{ + Modifies information to be included in notice of right to
construction lien and waiver of right to construction lien.
Specifies when court is required to disallow lien. Specifies
disallowance procedures. + }
A BILL FOR AN ACT
Relating to liabilities arising from residential contractor
activity; creating new provisions; and amending ORS 87.023,
87.058, 87.060, 87.091 and 87.093.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 87.023 is amended to read:
87.023. The notice of right to a lien required under ORS 87.021
{ - shall - } { + must + } include, but { + need + } not be
limited to, the following information and { - shall - } { +
must + } be substantially in the following form:
_________________________________________________________________
NOTICE OF RIGHT TO A LIEN.
WARNING: READ THIS NOTICE.
{ -
PROTECT YOURSELF FROM - }
{ -
PAYING ANY CONTRACTOR - }
{ -
OR SUPPLIER TWICE - }
{ -
FOR THE SAME SERVICE. - }
{ +
AVOID CLAIMS FOR PAYMENTS + }
{ +
YOU HAVE ALREADY MADE. + }
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
To:_____
Date of mailing: ___
Owner
_______
Owner's address
_______
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
This is to inform you that ________ has begun to
provide ________ (description of materials, equipment, labor or
services) ordered by ________ for improvements to property you
own. The property is located at ____________.
A lien may be claimed for all materials, equipment, labor and
services furnished after a date that is eight days, not including
Saturdays, Sundays and other holidays, as defined in ORS 187.010,
before this notice was mailed to you.
Even if you or your mortgage lender { - have - } { +
has + } made full payment to the contractor who ordered these
materials { + , equipment, labor + } or services, { - your
property may still be subject to a lien unless the supplier
providing this notice is paid. - } { + if the contractor does
not pay the supplier that provides this notice, you may have to
appear in court and prove that you made the payment to the
contractor to avoid enforcement of a lien against your
property. + }
THIS IS NOT A LIEN. It is a notice sent to you for your
protection in compliance with the construction lien laws of the
State of Oregon.
This notice has been sent to you by:
NAME: ______
ADDRESS: _____
TELEPHONE: ____
IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, FEEL FREE TO CALL
US.
IMPORTANT INFORMATION ON
REVERSE SIDE
_________________________________________________________________
_________________________________________________________________
IMPORTANT INFORMATION
FOR YOUR PROTECTION
Under Oregon's laws, those who work on your property or provide
{ - labor, - } { + materials, + } equipment, { + labor or + }
services { - or materials - } and are not paid have a right to
enforce their claim for payment against your property. This claim
is known as a construction lien.
If your contractor fails to pay subcontractors, material
suppliers, rental equipment suppliers, { + laborers or + }
service providers { - or laborers - } or neglects to make
other legally required payments, the people who are owed money
can look to your property for payment, { - even if you have
paid your contractor in full - } { + unless you prove in court
that you paid the money to the contractor + }.
The law states that all people hired by a contractor to provide
you with materials, equipment, labor or services must give you a
notice of right to a lien to let you know what they have
provided.
WAYS TO PROTECT
YOURSELF ARE:
- RECOGNIZE that this notice of right to a lien may result in
{ + an action to enforce + } a lien against your property
{ - unless - } { + if the contractor fails to pay + } all
those supplying a notice of right to a lien { - have been
paid - } .
- LEARN more about the lien laws and the meaning of this notice
by contacting the Construction Contractors Board, an attorney or
the firm sending this notice.
- ASK for a statement of the { - labor, - } { +
materials, + } equipment, { + labor or + } services { - or
materials - } provided to your property from each party that
sends you a notice of right to a lien.
- WHEN PAYING your contractor for materials, equipment, labor
or services, you may make checks payable jointly to the
contractor and the firm furnishing materials, equipment, labor or
services for which you have received a notice of right to a lien.
- OR use one of the methods suggested by the 'Information
Notice to Owners.' If you have not received such a notice,
contact the Construction Contractors Board.
- GET EVIDENCE that all firms from whom you have received a
notice of right to a lien have been paid or have waived the right
to claim a lien against your property.
- CONSULT an attorney, a professional escrow company or your
mortgage lender.
_________________________________________________________________
SECTION 2. ORS 87.058 is amended to read:
87.058. (1) As used in this section:
(a) Notwithstanding ORS 87.005, 'contractor' has the meaning
given that term in ORS 701.005.
(b) 'Board' means the Construction Contractors Board
established in ORS 701.205.
(2) If a person files a suit to enforce a lien perfected under
ORS 87.035 and the owner of the structure subject to
{ - that - } { + the + } lien files a complaint that { - is
being processed by - } the board under ORS 701.145 { + is
processing + } against a contractor who performed work on the
structure, the owner may obtain a stay of proceedings on the suit
to enforce the lien if:
(a) The owner already { - has - } paid the contractor for
{ - that contractor's - } work { + on the structure + }
that { + the contractor performed that + } is subject to this
chapter { - on the structure - } ;
(b) The person suing to enforce the lien perfected under ORS
87.035:
(A) Performed work { + on the structure for a contractor that
the owner paid, provided that the work + } { - that - } is
subject to ORS chapter 701 { - on the structure for the
contractor who has been paid by the owner - } ;
(B) Furnished labor, services or materials or rented or
supplied equipment used on the structure to the contractor
{ - who has been paid by - } { + that + } the owner { +
paid + }; or
(C) { - Otherwise - } Acquired the lien as a result of
{ - a - } { + another + } contribution toward completion of
the structure for which the { + owner paid the + } contractor
{ - has been paid by the owner - } ; and
(c) The { - continued existence of the - } lien on which the
suit is pending { - is attributable to the failure of - } { +
continues to exist because + } the contractor { - who has been
paid by - } { + that + } the owner { + paid failed + } to pay
the person suing for { - that - } { + the + } person's
contribution toward completion of the structure.
(3) The owner may petition { - for the stay of - } { + to
stay the + } proceedings described in subsection (2) of this
section by filing the following papers in the circuit court in
which the suit on the lien is pending:
(a) A certified copy of the complaint filed for processing by
the board under ORS 701.145; and
(b) An affidavit signed by the owner that contains:
(A) A description of the structure;
(B) The street address of the structure;
(C) A statement that the structure is the structure upon which
the suit to enforce the lien is pending; and
(D) A statement that the petitioner is the owner of the
structure.
(4) Upon receipt of a complete petition described in subsection
(3) of this section, the circuit court shall stay proceedings on
the suit to enforce the lien.
(5) After the { - board - } { + board's + } order on the
complaint becomes final and the board issues { - any
required - } { + a + } notice { + required + } for payment
against the contractor's bond or deposit, the circuit court shall
dissolve the stay ordered under subsection (4) of this section.
{ + (6) A court's stay or dissolution of a stay of
proceedings under this section does not affect the owner's right
to seek and obtain a disallowance of the lien under ORS 87.060
(3). + }
SECTION 3. ORS 87.060 is amended to read:
87.060. (1) A suit to enforce a lien perfected under ORS 87.035
shall be brought in circuit court { - , and the pleadings,
process, practice and other proceedings shall be the same as in
other cases - } .
(2) In a suit to enforce a lien perfected under ORS 87.035,
evidence of the actual costs of the { - labor, - } { +
materials, + } equipment, { + labor or + } services { - and
material - } provided by the lien claimant establishes a
rebuttable presumption that { - those - } { + the + } costs
are the reasonable value of { - that labor, - } { + the
materials, + } equipment, { + labor or + }services { - and
material - } .
(3) In a suit to enforce a lien perfected under ORS 87.035, the
court shall allow or disallow the lien. If the { + court allows
the + } lien { - is allowed - } , the court shall proceed
{ - with the foreclosure of - } { + to enforce + } the lien
and resolve all other pleaded issues. { + The court shall
disallow the lien if the owner proves that the owner paid the
contractor for the materials, equipment, labor or services that
are the basis for the lien. This subsection does not prohibit a
court from staying proceedings on the suit at an owner's request
if the owner complies with ORS 87.058. If an owner seeks a
disallowance of a lien for which a court issued a stay of
proceedings under ORS 87.058, the court shall consider evidence
the owner submitted to obtain the stay of proceedings when
determining whether to disallow the lien. + } { - If the lien
is disallowed, and a party has made a demand for a jury trial as
provided for in subsection (4) of this section, the court shall
impanel a jury to decide any issues triable of right by a jury.
All other issues in the suit shall be tried by the court. - }
(4) { + If the court disallows the lien under subsection (3)
of this section, a party, after the disallowance, may demand a
trial by jury of any issue that is triable of right by a jury.
The court shall impanel a jury to decide issues triable of right
by a jury, but the court shall try all other issues in the suit.
A party seeking a trial by jury shall file a demand in writing
with the court and shall serve the demand in writing upon the
other parties at any time before the trial on the issues begins.
A party that fails to serve a demand as provided in this
subsection waives the party's right to a trial by jury. + }
{ - A party may demand a trial by jury of any issue triable of
right by a jury after the lien is disallowed, if that party
serves a demand therefor in writing upon the other parties at any
time prior to commencement of the trial to foreclose the lien.
The demand shall be filed with the court. The failure of a party
to serve a demand as required by this subsection shall constitute
a waiver by the party of trial by jury. - } A demand for
{ + a + } trial by jury made as provided in this subsection may
not be withdrawn without the consent of the parties.
(5) When notice of intent to { - foreclose - } { +
enforce + } the lien has been given, pleaded and proven as
provided for in ORS 87.057, the court, upon entering judgment for
the lien claimant, shall allow as part of the costs all moneys
paid { - for the filing or recording of - } { + to file and
record + } the lien and all moneys paid for title reports
required for preparing and { - foreclosing - } { +
enforcing + } the lien. In a suit to enforce a lien perfected
under ORS 87.035 the court shall allow a reasonable amount as
attorney fees at trial and on appeal to the party who prevails on
the issues of the validity and { - foreclosure - } { +
enforcement + } of the lien.
(6) { - In case - } { + If + } the proceeds { - of
any - } { + from a + } sale under ORS 87.001 to 87.060
{ - and - } { + or + } 87.075 to 87.093 are insufficient to
pay all lienholders { - claiming under such statutes - } , the
liens { - of all persons shall - } { + must + } be paid pro
rata. Each claimant is entitled to execution for any balance due
the claimant after the distribution of the proceeds, and
{ - that - } { + the clerk of the court shall issue the + }
execution { - shall be issued by the clerk of the court, - }
upon demand { - , - } after the return of the sheriff or other
officer making the sale showing the balance due.
(7) { - All suits - } { + A suit + } to enforce
{ - any - } { + a + } lien perfected under ORS 87.035
{ - shall have preference on the calendar of the court over
every civil suit - } { + has priority over other civil suits on
the court's calendar + }, except suits to which the state is a
party, and shall be tried by the court without unnecessary delay.
{ - In such a suit, all persons personally liable, and all
lienholders whose claims have been filed for record pursuant to
ORS 87.035, shall, and all other persons interested in the matter
in controversy, or in the property sought to be charged with the
lien, may be made parties; but persons not made parties are not
bound by the proceedings. The - } { + In a suit to enforce a
lien perfected under ORS 87.035, a person that is personally
liable for the lien and a lienholder that has filed a claim under
ORS 87.035 are parties. Other persons interested in the matter in
controversy or in the property sought to be charged with the lien
may be made parties to the suit. Persons that are not parties to
the suit are not bound by the proceedings. Enforcement + }
proceedings { - upon the foreclosure of the - } { + for + }
liens perfected under ORS 87.035 shall, as nearly as possible,
conform to the proceedings { - of a foreclosure of - } { +
for foreclosing + } a mortgage lien upon real property.
SECTION 4. ORS 87.091 is amended to read:
87.091. (1) A written waiver described in ORS 87.007 (2) and
signed by the purchaser of residential real property
{ - shall - } { + must + } include the information described
in subsection (2) of this section. The waiver { - shall - }
{ + must + } be printed as a separate document and in at least
12-point boldfaced type.
(2) The waiver described in subsection (1) of this section
{ - shall - } { + must + } include, but { + need + } not be
limited to, the following information and shall be in
substantially the following form:
_________________________________________________________________
WAIVER OF PROTECTIONS
FROM SUBCONTRACTORS' LIENS.
WARNING: READ THIS NOTICE.
{ -
PROTECT YOURSELF FROM - }
{ -
PAYING ANY CONTRACTOR - }
{ -
OR SUPPLIER TWICE - }
{ -
FOR THE SAME SERVICE. - }
{ +
AVOID CLAIMS FOR PAYMENTS + }
{ +
YOU HAVE ALREADY MADE. + }
This is to inform you that if you are purchasing residential
real property within 75 days after completion of construction,
the property you are purchasing may be subject to construction
liens that are not yet recorded on the date of sale. The property
is located at _____.
Under Oregon law, those who work on your property or provide
materials, equipment, labor or services and are not paid have a
right to enforce their claim for payment against the property.
This claim is known as a construction lien.
If a contractor fails to pay subcontractors, material
suppliers, rental equipment suppliers, laborers or service
providers or neglects to make other legally required payments,
any person who is owed money can look to the property for payment
{ - , even if the contractor has been paid in full. - } { +
unless you prove in court that you have already paid the money
owed to the contractor. + }
OREGON LAW PROVIDES
THE FOLLOWING PROTECTIONS:
Under Oregon Law, the seller of residential real property is
required to take one of the following actions to protect you from
construction liens that are not yet recorded on the date of sale:
- PURCHASE or PROVIDE title insurance to help cover any
construction liens that are recorded after you complete the
purchase of the residential real property.
- RETAIN money in escrow until the status of all construction
liens is resolved after the purchase of the residential real
property is complete.
- MAINTAIN a bond or letter of credit until the status of all
construction liens is resolved after the purchase of the
residential real property is complete.
- GET waivers from every person claiming a right to a lien
against the property in an aggregate amount of $5,000 or more.
- WAIT to close the purchase of the residential real property
until 75 days after the completion of construction.
WAIVER OF RIGHTS
Under Oregon law, you may waive the requirements that apply to
the seller of the residential real property. By signing this
document, you agree to waive these protections and accept the
risk that the property you are purchasing may be subject to a
lien that is recorded after the date of sale. { - By waiving
your rights, you may become liable for payment of the lien even
if the contractor has been paid in full. - } { + If you waive
your rights and the contractor does not make a required payment,
you may have to appear in court and prove that you have paid the
money owed to the contractor to avoid enforcement of the lien
against your property. + } Before signing this waiver, you may
wish to consult an attorney.
_________________________________________________________________
I have read this statement and understand the risks it
describes. I hereby choose to assume those risks and waive the
protections provided under ORS 87.007 by signing this form.
__________
(Signature of purchaser)
________ , 2___
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
SECTION 5. ORS 87.093 is amended to read:
87.093. (1) The Construction Contractors Board shall adopt by
rule a form entitled 'Information Notice to Owner' which
{ - shall - } { + must + } describe, in nontechnical language
and in a clear and coherent manner using { + common and everyday
meanings for the language used, + } { - words in their common
and everyday meanings, - } the pertinent provisions of the
Construction Lien Law of this state and the rights and
responsibilities of an owner of property and an original
contractor under { - that - } { + the + } law. The
'Information Notice to Owner' { - shall - } { + must + }
include signature lines for the contractor and the property
owner. The { + form must also describe at least the
following + } rights { - and responsibilities described in the
form shall include, but not be limited to - } { + that the
owner has and methods by which the owner may avoid having to
defend lien claims for materials, equipment, labor and
services + }:
{ - (a) Methods by which an owner may avoid multiple payments
for the same materials and labor; - }
{ - (b) - } { + (a) + } The right to file a complaint
against a licensed contractor with the board and, if appropriate,
to be reimbursed from the contractor's bond filed under ORS
chapter 701; and
{ - (c) - } { + (b) + } The right to receive, upon written
request therefor, a statement of the reasonable value of
materials, equipment, { + labor or + } services { - or
labor - } provided from the persons
{ - providing - } { + that provided + }the materials,
equipment, { + labor or + } services { - or labor at the
request of - } { + at + } an original { - contractor - }
{ + contractor's request + } and { - who have - } { +
that + } also provided notices of right to a lien.
(2)(a) { - Each - } { + An + } original contractor shall
deliver a copy of the 'Information Notice to Owner' adopted by
the board under this section to:
(A) The first purchaser of residential property constructed by
the contractor and sold before or within the 75-day period
immediately following the completion of construction; and
(B) The owner or an agent of the owner, other than an original
contractor, at the time of signing a written residential
construction or improvement contract with the owner.
(b) If the residential construction or improvement contract is
an oral contract, the original contractor shall mail or otherwise
deliver the 'Information Notice to Owner' not later than five
days after the contract is made.
(3) The contractor shall deliver the 'Information Notice to
Owner' personally, by registered or certified mail or by first
class mail with certificate of mailing.
(4) This section applies only to a residential construction or
improvement contract for which the aggregate contract price
exceeds $1,000. If the price of a residential { + construction
or + } improvement contract was initially less than $1,000, but
during the course of the performance of the contract exceeds that
amount, the original contractor shall mail or otherwise deliver
the ' Information Notice to Owner' not later than five days after
the contractor knows or should reasonably know that the contract
price will exceed $1,000.
(5) Notwithstanding subsections (2) and (4) of this section,
the original contractor need not send the owner an 'Information
Notice to Owner' if the owner is a contractor licensed with the
board under ORS chapter 701.
(6) Notwithstanding ORS 87.010 and 87.030, if an original
contractor does not deliver an owner or agent with an '
Information Notice to Owner' as required under subsections (2) to
(4) of this section, the original contractor may not claim
{ - any - } { + a + } lien created under ORS 87.010 upon
{ - any - } { + an + } improvement, lot or parcel of land of
the owner for { + materials, equipment, + } labor { - , - }
{ + or + } services { - or materials - } supplied under the
residential construction or improvement contract for which the
original contractor failed to deliver the required 'Information
Notice to Owner'.
(7) If an original contractor does not deliver an ' Information
Notice to Owner' to an owner or agent as required under
subsection (2) of this section, the board may suspend the license
of the original contractor for any period of time that the board
considers appropriate or impose a civil penalty of not more than
$5,000 upon the original contractor as provided in ORS 701.992.
(8) As used in this section { - : - } { + , + }
{ - (a) 'Residential construction or improvement' means the
original construction of residential property and constructing,
repairing, remodeling or altering residential property and
includes, but is not limited to, the construction, repair,
replacement or improvement of driveways, swimming pools,
terraces, patios, fences, porches, garages, basements and other
structures or land adjacent to a residential dwelling. - }
{ - (b) - } 'residential construction or improvement
contract ' means an agreement, oral or written, between an
original contractor and an owner for { - the performance of a
home improvement and includes all labor, services and materials
furnished and performed thereunder. - } { + :
(a) Constructing original residential property;
(b) Constructing, repairing, remodeling, replacing, improving
or otherwise altering residential property or structures or land
adjacent to residential property such as driveways, swimming
pools, terraces, patios, fences, porches, garages or basements;
or
(c) Supplying or furnishing materials, equipment, labor or
services. + }
SECTION 6. { + (1) The amendments to ORS 87.023 by section 1
of this 2009 Act apply to notices of lien for supplying
materials, equipment, labor or services on or after the effective
date of this 2009 Act. If a person that supplied materials,
equipment, labor or services sent an owner a previous notice of
lien under ORS 87.023 as ORS 87.023 was set forth in the 2007
Edition of Oregon Revised Statutes, the notice previously sent is
not effective as a notice of lien with respect to materials,
equipment, labor or services supplied on or after the effective
date of this 2009 Act.
(2) The amendments to ORS 87.058 and 87.060 by sections 2 and 3
of this 2009 Act apply to liens for supplying materials,
equipment, labor or services on or after the effective date of
this 2009 Act.
(3) The amendments to ORS 87.091 by section 4 of this 2009 Act
apply to residential property purchases that close on or after
the later of:
(a) The effective date of this 2009 Act; or
(b) Seventy-five days after the date construction was
completed, if construction was completed before the effective
date of this 2009 Act. + }
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