Like most states, Oregon also has many rules and regulations regarding the proper filing of a mechanics lien. There are required pre-lien notices to submit, there are strict deadlines to meet, and there are also necessary information that must be provided on your mechanics lien claim document.
This guide will walk you through the process of filing a mechanics lien in Oregon successfully, from the step-by-step procedures to the common mistakes that most lien claimants commit.
- Serving the required pre-lien notices
- How to File a Mechanics Lien in Oregon: 3 Steps
- Important Deadlines to Keep Track Of
- 3 Common Mistakes When Filing a Mechanics Lien in Oregon
Serving the required pre-lien notices
Depending on your role in the construction project, you have to submit certain pre-lien notices in Oregon in order to protect your lien rights. Failing to submit these pre-lien notices means losing your right to file a mechanics lien should payment issues arise.
There are generally two types of pre-lien notices in Oregon: the Notice of Right to Lien and the Information Notice to Owner.
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Oregon Notice of Right to Lien
For contractors, subcontractors, or material suppliers who do not have direct contact with the property owner, you must serve a Notice of Right to Lien to the property owner, the general contractor, and the mortgagee.
This notice must be sent within 8 days after the first day of work, and it must be served by personal delivery or by registered or certified mail with return receipt requested. If submitted late, the subsequent mechanics lien will only cover the work performed starting from the previous 8 days prior to serving the Notice of Right to Lien.
The Notice of Right to Lien should also be substantially in the following format:
Information Notice to Owner in Oregon
All general contractors that are in direct contact with the property owners of residential projects worth above $2000 are required to submit an Information Notice to Owner. General contractors in non-residential projects may also submit this notice.
The Information Notice to Owner must handed to the property owner on the same day that the contract to the project is executed.
- If the residential project starts off as worth less than $2000 but eventually exceeds this value, the Information Notice to Owner must be sent within 5 days after learning that the project will go above $2000.
- If the property gets sold within 75 days after the completion of construction by the contractor, the Information Notice to Owner must also be served to the first purchaser of the property.
The general contractor may serve the Information Notice to Owner in Oregon by personal delivery, by registered or certified mail, or by first class mail with certificate of mailing.
Note that the Information Notice to Owner must contain signature lines from both contractor and the owner.
How to File a Mechanics Lien in Oregon: 3 Steps
- Prepare the mechanics lien document
- Record the mechanics lien
- Enforce the mechanics lien
1. Prepare the mechanics lien document
Oregon does not require its lien claimants to use a specific form for the mechanics lien. However, there are certain information that the mechanics lien must contain for the document to be considered valid.
The following information must be on the Oregon mechanics lien, according to ORS 875.035(3):
- A true statement of demand, after deducting all just credits and offsets
- The name of the owner, or reputed owner, if known;
- The name of the person by whom the claimant was employed or to whom the claimant furnished the materials or rented the equipment or by whom contributions are owed; and
- A description of the property to be charged with the lien sufficient for identification, including the address if known.
Can I claim attorney fees and administrative costs on the mechanics lien in Oregon?
No. The amount that you should claim on the mechanics lien should be strictly related to the lienable amount that covers the work you have done on the project. Attorney fees and other lien costs do not count towards this value, so you must never in any case include them.
Keep in mind, however, that you may still recover attorney costs after a successful foreclosure lawsuit.
Must a mechanics lien in Oregon be notarized?
Yes, the Oregon mechanics lien must also be notarized for it to be enforceable.
Must a legal property description be provided?
Not necessarily. A complete address should be sufficient enough for identification.
2. Record the mechanics lien in Oregon
Once you have secured your lien rights by submitting the necessary pre-lien notices and you have prepared the mechanics lien document with all the required information, you are now ready to record your mechanics lien.
When should you file the mechanics lien in Oregon?
The mechanics lien in Oregon must be filed either within 75 days after you last furnish labor or materials to the project, or within 75 days after the completion of the construction, whichever date is earlier.
Where should you file the mechanics lien in Oregon?
The mechanics lien in Oregon must be filed with the recording officer of the county where the project is located.
Should I serve copies of the mechanics lien in Oregon after filing?
Yes! This is another very important step that you must stop forget: you must serve copies of the mechanics lien to the property owner and the mortgagee within 20 days after recording it in the recorder’s office.
Failing to serve copies of the mechanics lien within the deadline will invalidate your claim.
3. Enforce the mechanics lien
The mechanics lien in Oregon is valid for 120 days after the date of recordation. This means that you have 120 days after filing the mechanics lien to get paid or foreclose the lien. Failing to enforce the lien within this 120-day window will get you no payment for the services that you have rendered to project.
If you don’t think that you are going to get paid before your mechanics lien expires, you must initiate a foreclosure lawsuit to enforce the lien.
Note that you are able to recover attorney fees if the court rules in your favor on the foreclosure lawsuit. However, failing to serve a Notice of Intent to Foreclose will invalidate you from recovering such amount.
Important Deadlines to Keep Track Of
3 Common Mistakes When Filing a Mechanics Lien in Oregon
1. Failing to serve the required pre-lien notices
Oregon has different pre-lien notice requirements depending on your role in the project.
Note that submitting a preliminary notice even if not required always helps in developing good business practice. Make sure that you don’t forget this step, because protecting your lien rights begin with filing the required pre-lien documents.
2. Overstating the amount being claimed on the mechanics lien
This is another frequent mistake: some claimants pad their claimed amount by including attorney fees and other lien-related costs. You must in no circumstances do this.
3. Failing to enforce the lien before it expires
As with most states, Oregon also does not have an infinite duration for its mechanics liens. Oregon mechanics liens only last for 120 days, and so they must be enforced before this period ends.