If you’re owed money on a job, one of the fastest ways to ensure you get paid is to file a mechanic’s lien. Placing a mechanic’s lien — also known as a construction lien or a contractor lien — on a property means using the worth of that property as leverage in exchange for your 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.
Essentially, a lien is insurance for laborers — holding all parties accountable for promises made before the work began.
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 for filing a mechanic’s lien in Oregon.
Not just anyone can walk into a recording office and file a lien. Though it’s usually less expensive than suing a customer outright, forcing foreclosure on a property can be just as damaging to a property’s worth. It’s a serious business, and every state treats it 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.”
Part of the reason this type of lien assumes so many different names is because it applies broadly to so many different types of work. 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).
If you’re still unsure whether or not you qualify, don’t hesitate to reach out. We have a committed, local team waiting to lend some expertise.
Eligibility to file a lien doesn’t stop at the type of service, however. Many states require you to send a preliminary notice — or, in Oregon, a “Notice of Right to Lien” — to reserve your right to file a mechanic’s lien in the event of non-payment. Not only does Oregon require preliminary notice for all residential projects, but they also require it sooner than any other state in the country.
On residential projects in Oregon 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 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.
By our count, there are two different methods of filing a construction lien in Oregon: the easy way or the hard way.
What we consider “the hard way” for most lienholders is filing the lien on your own, or with the help of a lawyer. Many of our customers have come to us because they found — like most legal processes — the process of filing a lien on their own to be tedious, confusing, and expensive. There are countless details, statutes, and laws that must be understood and abided by to deem the lien “lawful” and enforceable; what’s more, these requirements often differ state by state.
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 mechanic’s lien documents is critical; any incorrect information can ultimately lead to an invalid lien. 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.”
Don’t go overboard here: any fabrication or inflation can lead to a fraudulent lien, rejected upon review. Additionally, you shouldn’t include any interest, legal, or filing fees in your total — just the principal amount you’re claiming on the lien. Attorney fees can often be recovered if proper steps are taken after the lien has been recorded.
It’s possible for a construction lien to be deemed invalid if the correct property owner is not stated in the lien document. If you’re unsure who the property owner is, include the name of any person believed to be the 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.”
This is usually your customer. If there are multiple people who owe you for work done on one project, it’s best to include the names of all indebted.
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; in this case, however, 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.
From here, you can file your Oregon mechanic’s lien in person, by mail, or online. A lien must be recorded by the county recording office where the project itself took place; if the project spanned across county lines, 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 Service serves as an easier solution.
When it comes to matters of the law, it’s best to defer to the experts. Rather than writing and filing your own lien document, submit the following form to secure a mechanic’s lien through Northwest Lien. 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 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. The lien is not at risk of invalidation if the claimant fails to serve the property owner a copy, but failure to do so does disqualify you from recovering any legal fees you incurred during the lien process.
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.
If a lien is filed in the woods and there’s no one there to fulfill payment, was the lien ever really filed?
In most cases, filing a lien against their property is enough to convince property owners to settle their debts. Some property owners, however, need 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 claimed, recorded, and served, you’re required to file a Notice of Intent to Foreclose. Like a Notice of Right to Lien, a Notice of Intent to Foreclose is a type of warning document that lets 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 a lien waiver. 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.
Though the lien will expire automatically after 120 days, an expired lien doesn’t get removed from the records until it is officially released. The property owner will eventually need the expired mechanic’s lien off the books, and they may even have the right to file a lawsuit to get the record wiped. To avoid future liability, it’s best to just resolve the matter now and wipe your hands … lien of it.