Introduction. In Oregon, construction liens are governed entirely by statute, (Chapter 87 of the Oregon Revised Statutes). This article summarizes only the most important legal requirements.
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Introduction
In Oregon, construction liens are governed entirely by statute, (Chapter 87 of the Oregon Revised Statutes), and are designed to provide security to suppliers and contractors by allowing them to encumber land that they improved by their efforts. Application of the construction lien statutes are highly technical. Failure to precisely follow the notice and filing requirements could result in the invalidation of lien rights, and possibly a counter-claim against the lien claimant for slander of title or abuse of process. This article summarizes only the most important legal requirements. Consultation with a knowledgeable attorney is highly advisable.
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Liens Generally
A construction lien claimant who complies with the applicable notice and filing requirements has a right to file a lien. This is true even if the person with whom the claimant has a contract has been paid in full by the property owner (such as in a contractor/sub-contractor situation where the property owner paid the general contractor but the general contract failed to pay the sub-contractor. The sub-contractor may have a breach of contract claim against the general contractor, but may also have the right to file a construction lien against the property).
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Who is Entitled to a Construction Lien
Anybody who performs labor, furnishes materials, or rents equipment used in construction of any improvement or in preparation of land for improvement, shall have a lien upon the improvement if the labor, materials, or rented equipment were provided at the instance of the property owner or the construction agent of the property owner. In addition, architects, landscape architects, land surveyors, and registered engineers may have a lien on the land or structures that their services benefited. To be entitled to file a construction lien, a contractor must be properly licensed at the time of bidding or entering into the agreement for such work, and the contractor must remain licensed continuously throughout performance of the work. If a contractor is not licensed, the contractor’s rights may be seriously limited.
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Interests Subject to Lien
The property interests subject to lien on the improvement under construction include any land that may be necessary for the use and occupancy of the improvement as well as the site of the improvement. However, the lien can only be created to the extent of the interest in the site and land of the person that requested the improvement to be constructed.
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Notices Generally
The lien laws require a variety of notices. A potential lien claimant must provide some notices before recording a construction lien claim and other notices after recording a lien claim. All notices must be in writing and delivered in person or delivered by registered or certified mail except for the “Information Notice to Owner.”
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