Lien Rights in Oregon

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The Oregon Court of Appeals recently issued a decision confirming the pre-lien notice requirements necessary to perfect a lien in Oregon. The case, known as Multi/Tech Engineering Services, Inc. v. Innovative Design & Construction, LLC, 274 Or App 389 (2015), discussed whether a lien recorded by Multi/Tech for engineering services could be foreclosed where Multi/Tech may have failed to provide the project owner a notice of right to lien.

The case involved the development and construction of a commercial project in Salem owned by Adler Commercial Properties (ACP). The project owner retained the services of Innovative and Gene Pfeifer to assist in the development of the project, who in turn hired Multi/Tech to provide various engineering services. Following Innovative’s and Pfeifer’s failure to pay Multi/Tech’s final invoice, Multi/Tech recorded a lien identifying ACP (and other related entities) as the project owners and Innovative and Pfeifer as the lien debtors. Thereafter, the trial court granted a judgment of lien foreclosure to Multi/Tech. ACP, among others, appealed asserting that Multi/Tech failed to properly perfect its lien.

The Court of Appeals confirmed that under ORS 87.010(5) professionals providing engineering services, such as Multi/Tech, were generally authorized to lien the project for which such services were supplied. The Court went on further, however, to emphasize that “[i]n order to perfect one of the construction liens authorized by ORS 87.010, including a lien under ORS 87.010(5), a person who is entitled to a lien ordinarily must provide the owner of the property subject to the lien with notice of the person’s right to a lien.” Citing ORS 87.021(3)(a), the Court cautioned that “[f]ailure to provide the notice – when notice is required – means that the lien is not perfected and is not valid.”…
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Oregon’s lien statutes appear to have a gap in protection for architects who provide services at the request of someone other than the owner.  Because non-owners frequently hire architects, this issue should make all parties extra cautious about the nature of their contractual relationships. 

Like most states, Oregon protects payment rights for contractors, …
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Construction lien law is critical to understand, because it impacts a contractor’s ability to secure payment and it differs from state to state.  Contractors, however, can avoid many of these issues by being informed and prepared. Some of the most common issues in Oregon involve licensing, lienability, notice and documentation.

Licensing

First, a contractor has to be licensed.  Although it may seem straightforward, a contractor’s ability to get paid depends on valid licensing. Contractors must be validly licensed by the Construction Contractors Board (“CCB”) in order to bring a construction lien claim, file a complaint with the CCB, or commence any other action for compensation for work performed. ORS 701.131(1).

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