Updated: January 6, 2022
A mechanic’s lien — also known as a construction lien or a contractor lien — is a legal tool that allows contractors and subcontractors to leverage the worth of a property they’ve worked on in order to receive their agreed-upon wages. When you file a mechanic’s lien, you have the right to force the sale of the property and collect the amount you’re owed from the sale proceedings. Put simply, a mechanic’s lien is one of the most effective ways of getting paid if the property owner isn’t complying.
Oregon is unique in that it exhibits shorter deadlines and stricter requirements for construction liens. When it comes to time-sensitive legal matters, it helps to have a local show you the ropes; that’s why our team at Northwest Lien Service, the regional lien expert, has put together this comprehensive guide describing how to file a mechanic’s lien in Oregon. Please keep in mind that our article should not be taken as legal advice, but we hope it helps clear a few things up in terms of process, terminology, and requirements.
A lien is a powerful legal tool, and can be just as damaging to a property’s worth and reputation as a formal lawsuit can be. Liens are serious business, and every state treats them as such.
Oregon law (2017 ORS 87.101) describes the types of professionals who are permitted to file a construction lien on their work. These professionals 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 shall have a lien upon the improvement for the labor, transportation or material furnished or equipment rented at the instance of the owner of the improvement or the construction agent of the owner.”
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, shall have a lien upon the land for work done, materials furnished or equipment rented.”
3. “A lien for rented equipment under subsection (1) or (2) of this section shall be limited to the reasonable rental value of the equipment notwithstanding the terms of the underlying rental agreement.”
4. “Trustees of an employee benefit plan shall have a lien upon the improvement for the amount of contributions, due to labor performed on that improvement, required to be paid by agreement or otherwise into a fund of the employee benefit plan.”
5. “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 shall have a lien upon the land and structures necessary for the use of the plans, drawings or specifications so provided or supervision performed.”
6. “A landscape architect, land surveyor or other person who prepares plans, drawings, surveys or specifications that are used for the landscaping or preparation of a lot or parcel of land or who supervises the landscaping or preparation shall have a lien upon the land for the plans, drawings, surveys or specifications used or supervision performed.”
Contractors must have a valid contractor’s license in Oregon to be eligible for lien rights.
Part of the reason this type of lien (as opposed to other types of liens in Oregon) assumes so many different names is that it applies broadly across a number of disciplines within the construction industry. And while Oregon law doesn’t differentiate between industries when it comes to deadlines, it does exhibit one of the shortest deadlines in the country: a lien must be filed within 75 days from last delivered labor/material or after completion of construction (whichever happens first).
Because each situation is unique and the laws often seem ambiguous, it can be difficult to determine whether or not you hold lien rights after all. If you have any questions about your specific situation, we have a dedicated, local team waiting to lend some expertise — don’t hesitate to contact us!
Eligibility to file a lien doesn’t stop at the type of service or license, however. Once you’ve determined you’re eligible to file a mechanic’s lien based on your role on the project, you must also consider whether you took the required steps to maintain those lien rights throughout the project — namely, if you sent the proper notices within the required timeframes.
To preserve lien rights, contractors, suppliers, and laborers must send preliminary notice to both the property owner and general contractor, if applicable. Preliminary notice is often referred to as “notice of right to lien” in Oregon; it’s essentially making sure you effectively communicate to the property owner that you were hired to complete work on the property and expect to be paid once finished. This is a routine and non-threatening type of document required for residential projects in Oregon — and required sooner in Oregon than in any other state in the country. Read more about sending notice of right to lien in Oregon.
For residential projects in Oregon exceeding $2,000, general contractors hired directly by the property owner 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 $2,000. 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 the project. On commercial projects, only material suppliers are required to send a preliminary notice (within 8 days of first furnishing), but it is advisable for all parties to send it to fully protect their lien rights.
With the shortest preliminary deadlines in the country, it is imperative for Oregonians to get preliminary notice out quickly; otherwise, any mechanic’s lien filed in the future is invalid. You can find the Oregon Notice of Right to Lien form here.
If you ask us, there are two different methods of filing a construction lien in Oregon: the easy way or the hard way.
Filing the lien on your own, or even with the help of a lawyer, is what we consider “the hard way.” Many of our customers have come to us because they’ve found the process of filing a lien on their own — like most legal processes — can be confusing, tedious, and expensive. In order for a lien to be deemed “lawful” and enforceable, there are all sorts of details, statutes, and laws that must be understood and followed. What’s more, these requirements often differ state by state.
We don’t mean to scare you, just let you know that you have options! If you’d like to file the lien yourself, continue reading to learn best practices when filling out an Oregon mechanic’s lien form. If you’re interested in learning more about “the easy way,” feel free to skip the next section.
Attention to detail while preparing your mechanic’s lien document is crucial. Any incorrect information can ultimately lead to an invalid lien and a missed deadline. As outlined in Oregon statute § 87.035, your perfected “Claim of Lien” document must contain:
The lien amount recorded must be “a true statement of demand, after deducting all just credits and offsets.”
It can be easy to go a little overboard here, but it’s important to include only the principal amount you’re claiming on the lien. Any fabrication or inflation can lead to a fraudulent lien, rejected upon review. You also shouldn’t include any interest, legal, or filing fees in your total; if you properly release your Oregon mechanic’s lien, then you have the opportunity to recover attorney fees after payment has been received.
If you’re unsure who the property owner is after some diligent researching, include the name of any person who you believe could be the property owner (a.k.a., the “reputed owner”).
Oregon mechanic’s lien law requires “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.”
More than likely, this person is your customer. If you were working for multiple people, it’s best practice to include each of their names on the lien document.
Oregon requires only “a description of the property to be charged with the lien sufficient for identification, including the address if known;” this is actually one element of filing a mechanic’s lien in Oregon that’s more relaxed than in other states, where the legal description is sometimes required on the claim of lien.
For maximum legal coverage, however, it’s important to describe the property as accurately as possible. We recommend including the legal description if you can get your hands on it.
And finally: “the claim of lien shall be verified by the oath of the person filing or of some other person having knowledge of the facts.” As with all things, your signature represents your official acknowledgment of accuracy and compliance. It’s especially important in this case, however, because you’re subject to criminal penalties if there’s any false information. Double- and triple-check the information provided, then have it notarized at a notary near you.
Once you’ve filled out your Oregon mechanic’s lien form, you can file it in person, by mail, or online; this process is also sometimes called “perfecting” the lien. Even if it’s not the state in which your business is located, a lien must be recorded by the county recording office where the project itself took place. If the project took place in multiple counties, the lien must be filed in all associated county recording offices.
Don’t forget to bring a form of payment! There are costs associated with filing a mechanic’s lien, and they differ from county to county. If your county allows, electronic filing is not only the most convenient way of filing a mechanic’s lien, but it is often also the most accurate — step-by-step instructions online limit the chances of your lien getting rejected based on miscalculated recording fees.
For those of you who already have enough deadlines to meet, filing an Oregon mechanic’s lien with Northwest Lien serves as an easier solution.
Lien laws can be difficult to interpret, so it’s helpful to have someone who understands the nuances filing your lien for you. If you’re interested in filing your lien through Northwest Lien, submit the form below to sign up for an account and begin the lien filing process with us. Many times we can file a lien electronically in less than 48 hours.
Not only is our process quick and convenient, but it’s also effective; our team of local experts helped clients secure over $2.5 million in collections last year alone. Especially if you find yourself filing liens regularly, Northwest Lien is a great solution for filing and tracking mechanics’ liens in Oregon.
Once a lien has been recorded by the county auditor, it is the responsibility of the claimant to send a copy of the mechanic’s lien to the property owner within 20 days of recording. Forgetting to send the lien to the property owner won’t invalidate the lien altogether, but it will disqualify you from recovering any legal fees you incurred during the lien process — a pricey mistake to make!
In addition to forgoing fee recovery, failing to properly serve the lien makes it nearly worthless in practice. If the property owner doesn’t know there’s a lien filed on their property, then the threat of potential foreclosure would never even occur to them.
Luckily, filing a lien is enough to convince most property owners to settle their debts; a mechanic’s lien on a property effectively decreases its value, so the lien itself is powerful enough in most cases. Occasionally, however, you’ll come across a property owner who needs an extra push to write the check. The good news? Northwest Lien can help with the follow-up, too.
Once your Oregon mechanic’s lien has been properly perfected and served, you’re required to send notice of intent to foreclose. Like notice of right to lien, notice of intent to foreclose is a type of warning that informs indebted persons know that you’re willing and ready to take them to court if they are still non-compliant.
It’s important to keep in mind that Oregon mechanics’ liens are only good for 120 days from the date they are recorded. A consistent theme for Oregon lien deadlines, this 120-day expiration timeline is much shorter than in other states; so, if it becomes necessary to take more aggressive legal action, you must file a lien enforcement suit quickly, before the lien expires. If the 120-day period passes, then the lien is unenforceable.
Rather uniquely, Oregon lien expiration dates can be extended in 120-day increments up to two years from the date of original lien filing. The process of extending the lien requires the property owner’s approval, however, so it’s rare that liens are ever successfully extended.
Once you’ve received payment, we recommend officially releasing the mechanic’s lien with an Oregon lien release. The process of releasing a mechanic’s lien is pretty similar to obtaining one: you’ll need to file another document with the same county recording office you visited to file the lien itself. If you’ve filed a lien through Northwest Lien, we’ll take care of the lien release for you.
Though the lien will expire automatically after 120 days, an expired lien doesn’t get removed from the records until it is officially released. Liens can be damaged to a property’s value, and it’s advantageous for property owners to move forward without a lien on their property’s records. Plus, the property owner has a legal right to sue if a lien is not properly released once payment is fulfilled. To avoid future liability, it’s best to just resolve the matter now and wipe your hands … lien of it.
If you have any questions about any step in the lien filing process, reach out to the local team at Northwest Lien. We coordinate and file notices, liens, and releases in Washington and Oregon on a daily basis and are happy to provide clarity on an often-complicated legal process. If you’re ready to file a notice or lien now, you can order online now.