68th OREGON LEGISLATIVE ASSEMBLY--1995 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 3949
House Bill 3469
Sponsored by Representative WATT
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 as
introduced.
Requires each person providing materials, equipment, services
or labor for commercial improvement to provide notice of right to
claim construction lien to owner of site.
Exempts from such notice requirement only employee of person
who performs labor on commercial improvement and persons who
provide materials, equipment, services or labor for commercial
improvement at request of owner or original contractor.
Provides that, except for lien of original contractor and
employee of person who performs labor on commercial improvement,
construction lien has no priority over recorded mortgage or trust
deed unless notice of lien claim is given to mortgagee or trust
deed beneficiary.
Allows trust deed beneficiary as well as mortgagee to demand
list of services and materials for which construction lien is
claimed.
Prohibits affecting construction lien or bond claims of another
person without written consent of that person.
Provides statutory forms for waiver and release of construction
lien claims.
Takes effect January 1, 1996.
A BILL FOR AN ACT
Relating to construction liens; creating new provisions; amending
ORS 87.021 and 87.025; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
**************************** SECTION 1. ORS 87.021 is amended
to read:
87.021. (1) Except when { - material - } { + materials + },
equipment, services or labor described in ORS 87.010 (1) to (3),
(5) and (6) is furnished { + for a residential building + } at
the request of the owner, a person furnishing any materials,
equipment, services or labor described in ORS 87.010 (1) to (3),
(5) and (6) for which a lien may be perfected under ORS 87.035
shall give a notice of right to a lien to the owner of the site.
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 lien for materials, equipment and labor or
services provided after a date { - which - } { + that + } is
eight days, not including Saturdays, Sundays and other holidays
as defined in ORS 187.010, before the notice is delivered or
mailed. However, no lien is created under ORS 87.010 (5) or (6)
for any services provided for an owner-occupied residence at the
request of an agent of the owner.
(2) { - The notice required by subsection (1) of this section
shall be substantially in the form set forth in ORS 87.023 - }
{ + Except when materials, equipment, services or labor
described in ORS 87.010 (1) to (3), (5) and (6) is furnished for
a commercial improvement at the request of the owner or the
original contractor, a person furnishing any materials,
equipment, services or labor described in ORS 87.010 (1) to (3),
(5) and (6) used in the construction of a commercial improvement
shall give a notice of right to a lien to the owner of the site.
The notice of a 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 lien for materials, equipment and labor or
services provided after a date that is eight days, not including
Saturdays, Sundays and other holidays as defined in ORS 187.010,
before the notice is delivered or mailed + }.
(3) { - (a) - } Except as provided in { - paragraph (b)
of - } this subsection, a lien created under ORS 87.010 (1) to
(3), (5) or (6) may be perfected under ORS 87.035 only to the
extent that the notice required by { - subsection (1) - } { +
subsections (1) and (2) + } of this section is given.
{ - (b) A - } { + An employee of a + } person who performs
labor upon a commercial improvement { - or provides labor and
material for a commercial improvement or who rents equipment used
in the construction of a commercial improvement - } need not
give the notice required by subsection { - (1) - } { +
(2) + } of this section in order to perfect a lien created under
ORS 87.010. { - As used in this paragraph: - }
{ - (A) 'Commercial improvement' means any structure or
building not used or intended to be used as a residential
building, or other improvements to a site on which such a
structure or building is to be located. - }
{ - (B) 'Residential building' means a building or structure
that is or will be occupied by the owner as a residence and that
contains not more than four units capable of being used as
residences or homes. - }
(4) Unless { - otherwise agreed or - } the lien claimant who
is required to give the notice under subsection { - (1) - }
{ + (2) + } of this section is in privity with the original
contractor, when a provision in an agreement for the construction
of a commercial improvement requires the original contractor to
hold an owner harmless or to indemnify an owner for a lien
created under ORS 87.010 and perfected under ORS 87.035, that
provision is not enforceable as to any lien which requires that a
notice under this section be given to the owner unless a copy of
the notice is delivered pursuant to ORS 87.018 to the original
contractor not later than 10 days after its receipt by the owner.
{ + (5) As used in this section:
(a) 'Commercial improvement' means any structure or building
not used or intended to be used as a residential building or
other improvement to a site on which such a structure or building
is to be located.
(b) 'Residential building' means a building or structure that
is or will be occupied by the owner as a residence and that
contains not more than four units capable of being used as
residences or homes. + }
**************************** SECTION 2. ORS 87.025 is amended
to read:
87.025. (1) A lien created under ORS 87.010 (2) or (6) and
perfected under ORS 87.035 upon any lot or parcel of land shall
be preferred to any lien, mortgage or other encumbrance which
attached to the land after or was unrecorded at the time of
commencement of the improvement.
(2) Except as provided in subsections (3) and { - (6) - }
{ + (5) + } of this section, a lien created under ORS 87.010
(1), (4) or (5) and perfected under ORS 87.035 upon any
improvement shall be preferred to all prior liens, mortgages or
other encumbrances upon the land upon which the improvement was
constructed. To enforce such lien the improvement may be sold
separately from the land; and the purchaser may remove the
improvement within a reasonable time thereafter, not to exceed 30
days, upon the payment to the owner of the land of a reasonable
rent for its use from the date of its purchase to the time of
removal. If such removal is prevented by legal proceedings, the
30 days shall not begin to run until the final determination of
such proceedings in the court of first resort or the appellate
court if appeal is taken.
(3) { - No lien for materials or supplies shall have priority
over any recorded mortgage or trust deed on either the land or
improvement unless the person furnishing the material or
supplies, not later than eight days, not including Saturdays,
Sundays and other holidays as defined in ORS 187.010, after the
date of delivery of material or supplies for which a lien may be
claimed delivers to the mortgagee either a copy of the notice
given to the owner under ORS 87.021 to protect the right to claim
a lien on the material or supplies or a notice in any form that
provides substantially the same information as the form set forth
in ORS 87.023 - } { + Except for the lien of an original
contractor or the lien of an employee of a person who performs
labor on a commercial improvement, no lien created under ORS
87.010 (1) shall have priority over any recorded mortgage or
trust deed on either the land or improvement unless the person
described in ORS 87.010 (1) delivers to the mortgagee or trust
deed beneficiary either a copy of the notice of right to a lien
given to the owner under ORS 87.021 or a notice in any form that
provides substantially the same information as the form set forth
in ORS 87.023. The notice may be given at any time during the
progress of the improvement, but the notice only protects the
priority under this subsection of a lien for materials, equipment
and labor or services provided after a date that is eight days,
not including Saturdays, Sundays or other holidays as defined in
ORS 187.010, before the notice is delivered or mailed + }.
(4) { - A mortgagee who has received notice of delivery of
materials or supplies in accordance with the provisions of
subsection (3) of this section, may demand a list of those
materials or supplies including a statement of the amount due by
reason of delivery thereof. The list of materials or supplies
shall be delivered to the mortgagee within 15 days, not including
Saturdays, Sundays and other holidays as defined in ORS 187.010,
of receipt of demand, as evidenced by a receipt or a receipt of
delivery of a registered or certified letter containing the
demand. Failure to furnish the list or the amount due by the
person giving notice of delivery of the materials or supplies
shall constitute a waiver of the preference provided in
subsections (1) and (2) of this section - } { + A mortgagee or
trust deed beneficiary who has received notice in accordance with
subsection (3) of this section may demand a list of the labor
performed, the materials or supplies transported or furnished or
the equipment rented to the date on which the list is furnished,
together with a statement of the amount then due therefor. The
list shall be delivered to the mortgagee or trust deed
beneficiary within 15 days, not including Saturdays, Sundays or
other holidays as defined in ORS 187.010, of receipt of demand,
as evidenced by a receipt or a receipt of delivery of a
registered or certified letter containing the demand. Failure to
furnish the list or the amount due shall constitute a waiver of
the preference provided in subsections (1) and (2) of this
section + }.
{ - (5) Upon payment and acceptance of the amount due to the
supplier of materials or supplies, and upon demand of the person
making payment, the supplier shall execute a waiver of all lien
rights as to materials or supplies for which payment has been
made. - }
{ - (6) - } { + (5) + } Unless the mortgage or trust deed
is given to secure a loan { - made - } { + one of the express
purposes of which is + } to finance the alteration or repair { +
of improvements + }, a lien created under ORS 87.010 and
perfected under ORS 87.035 for the alteration and repair of an
improvement commenced and made subsequent to the date of record
of a duly executed and recorded mortgage or trust deed on that
improvement or on the site shall not take precedence over the
mortgage or trust deed.
{ - (7) - } { + (6) + } The perfection of a lien under ORS
87.035 relates to the date of commencement of the improvement as
defined in ORS 87.005. Except as provided in subsection (3) of
this section, the date of creation of the lien under ORS 87.010
and the date of perfection of the lien under ORS 87.035 do not
affect the priorities under this section, the equal priority of
perfected lien claimants, or the distribution of proceeds to
perfected lien claimants under ORS 87.060 (6).
**************************** SECTION 3. { + (1) No owner,
original contractor, surety or lender shall by any term of
contract or otherwise waive, affect, condition or impair, in
whole or in part, any construction lien or bond claims of another
person, whether with or without notice, except by the written
consent of the other person. Any term of a contract that waives,
affects, conditions or impairs the construction lien or bond
claims of a person without the written consent of that person is
void.
(2) This section does not affect the enforceability of any
agreement made in settlement of a construction lien or bond
claim, whether or not the lien or claim has been perfected by
recording, and whether or not any action upon the lien or claim
is pending in any court, if the settlement agreement makes
specific reference to the construction lien or bond claim so
settled.
(3) A waiver and release given by any claimant under this
section is void and unenforceable unless it is in substantially
the following forms in the following circumstances:
(a) When the claimant is required to execute a waiver and
release in exchange for, or in order to induce the payment of, a
progress payment and the claimant is not, in fact, paid in
exchange for the waiver and release, or a single payee check or
joint payee check is given in exchange for the waiver and
release, the waiver and release shall be in substantially the
following form: + }
_________________________________________________________________
{ +
CONDITIONAL WAIVER AND RELEASE UPON PROGRESS PAYMENT + }
{ + Upon receipt by the undersigned of a check from _______
(maker of check) in the sum of $___ (amount of check) payable
to _______ (payee or payees of check) and when the check has been
properly endorsed and has been paid by the financial institution
upon which it is drawn without reservation of any rights against
the undersigned, this document shall become effective to release
the undersigned's rights to perfect a construction lien or bond
claim that the undersigned has on the job of _______ (owner),
located at _______ (job description), to the following described
extent and so long as such payment occurs on or before
_______ (insert date). This release covers a progress payment for
labor, services, equipment or material furnished to _______ (your
customer) through _______ (date) (the 'Release Date') only. This
release does not cover any retentions retained before or after
the Release Date, any claims for extra labor, services, equipment
or material provided before or after the Release Date for which
payment has not been received, or any claims for labor, services,
equipment or material provided after the Release Date; and this
release does not require the undersigned to provide any
additional notices under ORS chapter 87. Rights based upon any
labor, services, equipment or material fully provided under a
written change order that has been fully executed by the parties
prior to the Release Date are covered by this release unless
specifically reserved by the undersigned in this release. This
release of rights to perfect a construction lien or bond claim
shall not otherwise affect the contract rights, including rights
between parties to the contract based upon a rescission,
abandonment or breach of the contract, or the right of the
undersigned to recover compensation for furnished labor,
services, equipment or material covered by this release if that
furnished labor, services, equipment or material was not
compensated by the progress payment. Before any recipient of
this document relies on it, said party should verify evidence of
payment to the undersigned. + }
_________________________________________________________________
{ + (b) When the claimant is required to execute a waiver and
release in exchange for, or in order to induce payment of, a
progress payment and the claimant asserts in the waiver that the
claimant has, in fact, been paid the progress payment, the waiver
and release shall be in substantially the following form, with
the last paragraph of the form in boldfaced, capitalized type
that is larger than the type used in the other portions of the
text: + }
_________________________________________________________________
{ +
UNCONDITIONAL WAIVER AND RELEASE UPON PROGRESS PAYMENT + }
{ + The undersigned has been paid and received a check in the
sum of $___ (amount of check). This document is effective to
release the undersigned's rights to perfect a construction lien
or bond claim that the undersigned has on the job of _______
(owner), located at _______ (job description), to the following
described extent: This release covers a progress payment for
labor, services, equipment or material furnished to _______ (your
customer) through _______ (date) (the 'Release Date') only. This
release does not cover any retentions retained before or after
the Release Date, any claims for extra labor, services, equipment
or material provided before or after the Release Date for which
payment has not been received, or any claims for labor, services,
equipment or material provided after the Release Date; and this
release does not require the undersigned to provide any
additional notices under ORS chapter 87. Rights based upon any
labor, services, equipment or material fully provided under a
written change order that has been fully executed by the parties
prior to the Release Date are covered by this release unless
specifically reserved by the undersigned in this release. This
release of rights to perfect a construction lien or bond claim
shall not otherwise affect the contract rights, including rights
between parties to the contract based upon a rescission,
abandonment or breach of the contract, or the right of the
undersigned to recover compensation for furnished labor,
services, equipment or material covered by this release if that
furnished labor, services, equipment or material was not
compensated by the progress payment.
NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES
THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT
IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT
BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE
FORM. + }
_________________________________________________________________
{ + (c) When the claimant is required to execute a waiver and
release in exchange for, or in order to induce the payment of, a
final payment and the claimant is not, in fact, paid in exchange
for the waiver and release, or a single payee check or a joint
payee check is given in exchange for the waiver and release, the
waiver and release shall be in substantially the following
form: + }
_________________________________________________________________
{ +
CONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT + }
{ + Upon receipt by the undersigned of a check from _______
(maker of check) in the sum of $___ (amount of check) payable to
_______ (payee or payees of check) and when the check has been
properly endorsed and has been paid by the financial institution
upon which it is drawn without reservation of any rights against
the undersigned, this document shall become effective to release
the undersigned's rights to perfect a construction lien or bond
claim the undersigned has on the job of _______ (owner), located
at _______ (job description), to the following described extent
and on the further condition and so long as such payment occurs
on or before _______ (date): This release covers the final
payment for labor, services, equipment or material furnished to
_______ (your customer) to the above described project, except
for disputed lien or bond claims for extra labor, services,
equipment or material in the principal amount of _______
(amount), which disputed claim is expressly reserved. This
release of rights to perfect a construction lien or bond claim
shall not otherwise affect the contract rights, including rights
between parties to the contract based upon a rescission,
abandonment or breach of the contract, or the right of the
undersigned to recover compensation for furnished labor,
services, equipment or material covered by this release if that
furnished labor, services, equipment or material was not
compensated by the final payment. Before any recipient of this
document relies on it, said party should verify evidence of
payment to the undersigned. + }
_________________________________________________________________
{ + (d) When the claimant is required to execute a waiver and
release in exchange for, or in order to induce payment of, a
final payment and the claimant asserts in the waiver that the
claimant has, in fact, been paid the final payment, the waiver
and release shall be in substantially the following form, with
the last paragraph of the form in boldfaced, capitalized type
that is larger than the type used in the other portions of the
text: + }
_________________________________________________________________
{ +
UNCONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT + }
{ + The undersigned has been paid and received a check in the
sum of $___ (amount of check). This document is effective to
release the undersigned's rights to perfect a construction lien
or bond claim that the undersigned has on the job of _______
(owner), located at _______ (job description), to the following
described extent: This release covers the final payment for
labor, services, equipment or material furnished to _______ (your
customer) to the above described project, except for disputed
lien or bond claims for extra labor, services, equipment or
material in the principal amount of $___ (amount), which disputed
claim is expressly reserved. This release of rights to perfect a
construction lien or bond claim shall not otherwise affect the
contract rights, including rights between parties to the contract
based upon a rescission, abandonment or breach of the contract,
or the right of the undersigned to recover compensation for
furnished labor, services, equipment or material covered by this
release if that furnished labor, services, equipment or material
was not compensated by the final payment.
NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES
THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT
IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT
BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE
FORM. + }
_________________________________________________________________
**************************** SECTION 4. { + The amendments to
ORS 87.021 and 87.025 made by sections 1 and 2 of this Act and
section 3 of this Act apply only to construction performed under
agreements entered into on or after January 1, 1996. + }
**************************** SECTION 5. { + This Act takes
effect on January 1, 1996. + }
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