5 essential things to know about Oregon mechanics liens
Contractors & suppliers have strong lien rights in Oregon. If a contractor or supplier isn’t paid on an Oregon job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about Oregon’s mechanics lien law.
Eligibility to file an Oregon mechanics lien is very specific
Oregon mechanics lien law clearly spells out who can file a mechanics lien. These include: 1) Any person performing labor upon, transporting or furnishing any material to be used in, or renting equipment used in the construction of any improvement; 2) Any person who engages in or rents equipment for the preparation of a lot or parcel of land, or improves or rents equipment for the improvement of a street or road adjoining a lot or parcel of land at the request of the owner of the lot or parcel; 3) Trustees of an employee benefit plan; 4) An architect, landscape architect, land surveyor or registered engineer who, at the request of the owner or an agent of the owner, prepares plans, drawings or specifications that are intended for use in or to facilitate the construction of an improvement or who supervises the construction. Also, if the project requires a written contract, the lien claimant must be licensed in order to file the lien.
The deadline to file an Oregon mechanics lien is one of two different dates
The deadline to file a lien in Oregon is the earlier of 75 days after the claimant’s last furnishing of labor and/or materials or 75 days after the completion of the project. Be sure to wait until after your last furnishing date, or until after completion of the project (based on which date is appropriate to your filing), as if a lien is filed too early, the lien claim is premature and invalid.
Send preliminary notice fast!
It’s imperative to get preliminary notice out quickly. Oregon has the shortest preliminary notice deadline in the country. On residential projects exceeding $2,000, general contractors must deliver an Information Notice to Owner at the time of signing the contract with the owner, or within 5 days of the date of when the contractor knows that the contract will exceed $2000. For any other parties (subcontractors and suppliers) on a residential project, the Notice of Right to Lien must be sent within 8 days of first furnishing to the project. On commercial projects, only material suppliers are required to send a preliminary notice (within 8 days of first furnishing), but is advisable for all parties to send it to fully protect their lien rights.
An Oregon mechanics lien might have priority over mortgages
Determining priority of liens in Oregon can be complex, but mechanics liens can have priority over mortgages on lenders. To achieve this priority, the first step is to make sure you send the Notice of Right to Lien to the mortgagee. Secondly, Oregon gives special priority to all labor liens. So if you furnished both labor and materials to the project, segregate your lien to indicate which portion of the total mechanics lien claim is for labor and which is for materials. It is not necessary to file to separate claims, just to note the amount that is attributed to labor only.
Oregon mechanics lien does not require a legal property description
The mechanics lien in Oregon does not require the legal property description, rather a description of the property sufficient to identify the parcel where the work is being performed, the physical address of the property should be included if known.