Getting Paid Faster with Liens, Bonds and Contracts - Oregon Webinar

In this webinar hosted by SunRay Construction Solutions and legal expert Andrew J. Nissen, we’ll walk through suggested contract edits for general contractors and suppliers, explain how to secure your lien rights on private jobs, and explore bond rights for public projects in Oregon. We’ll also break down important rules and exceptions, highlight common lien law mistakes to avoid, and explain how to properly exchange a lien release for payment. Finally, we’ll flag what to watch for in release forms issued by project owners—so you don’t give up your rights without knowing it. Let’s dive in.

Start with Your Contract: Avoiding the Attorney Fee Trap

If you're a general contractor working with an owner-prepared contract, be wary of a clause that awards attorney fees to the “prevailing party” in the event of a dispute. On the surface, this seems fair. But in practice, it often benefits the owner far more than the contractor.

Under lien law, contractors already have a legal right to recover attorney fees if they file a lien and prevail in court. Including an additional fee clause in your contract may expose you to unnecessary risk—especially if the owner later brings a defect claim. A minor issue could spiral into expensive litigation over attorney fees. For most contractors, it’s safer to strike this clause altogether.

Securing Lien Rights on Private Projects

Construction liens are among the most powerful tools for securing payment. When properly executed, a lien gives you a security interest in the property you’re working on—meaning you could, in theory, force a sale of the property to recover payment.

But here's the catch: lien laws are strictly interpreted. Missing a deadline or skipping a notice can wipe out your lien rights entirely. Here’s what to do:

1. Confirm Eligibility

Make sure the project and your scope of work qualify for lien protection. Only contractors or suppliers who provide labor, materials, equipment, or services that are physically incorporated into the project are eligible. Off-site work may not qualify unless it ends up on the jobsite.

2. Work Must Be on Private Property

You can’t file a lien on government-owned property. However, if a private entity leases public land (like a hotel at a public airport), you may be able to lien the private interest—even though the underlying land is public.

3. Licensing and Notices

You must be actively licensed, bonded, and insured with the Oregon Construction Contractors Board (CCB). Your contract must comply with CCB rules, and you must send the required notices:

• For residential work: provide the full CCB notice package, including the Notice of Right to a Lien.

• For commercial work: send a Notice of Right to Lien at the start of every project. This covers you going forward and retroactively for the previous 8 days of work.

Bond Rights for Public Projects

Since liens can’t be filed on public land, payment bonds provide an alternative remedy. These are required by law to ensure that subcontractors and suppliers get paid, even if the project owner is a government entity.

1. Miller Act (Federal Projects)

For federal projects over $100,000, the Miller Act requires the general contractor to post a payment bond. You have 90 days from your last labor or materials supplied to submit a claim.

2. “Little Miller Act” (Oregon Public Projects)

Oregon follows its own version of the Miller Act. You have 180 days from the last day of work to make a bond claim. If you’re not paid within 30 days, act quickly—contact an attorney or lien service to protect your rights.

3. Contractor-to-Contractor Bond Claims

In Oregon, you can also file a claim on another contractor’s CCB bond. Though less common, these claims are valid and must be filed within one year of project completion.

Lien and Bond Rules: Deadlines and Documentation

To preserve your rights, it’s crucial to follow the rules. Let’s break them down:

Pre-Lien Notices

Subcontractors and suppliers should send a Notice of Right to Lien as soon as work begins. Delays could mean that only part of your work is protected.

Filing the Lien

You must file your lien within 75 days of:

• The last date you supplied labor or materials, or

• The project’s completion date—whichever is earlier.

“Completion” can be defined in three ways:

1. Substantial completion of the work,

2. Posting of a valid completion notice, or

3. Project abandonment.

Lien Contents

Your lien must include a “true statement of demand”—the unpaid balance after deducting prior payments. This should include:

• Contract price

• Approved and pending change orders

• Total work performed

• Payments received

• Lien fees and costs

Break down the charges for labor, materials, and equipment in a clear exhibit. This helps the owner’s legal team evaluate your claim quickly.

Notice and Foreclosure

After recording your lien, you have 20 days to notify the property owner and any lenders via certified mail. You then have 120 days from the filing date to file a foreclosure lawsuit.

If your contract includes arbitration, consult your attorney. You may need to file a lawsuit and initiate arbitration simultaneously, pausing the court case while arbitration is underway.

Release Forms: Don’t Sign Away Your Rights

When exchanging a lien release for a check, read the form carefully. Project owners often use broad releases that waive more rights than intended. Watch for language that:

• Waives future claims

• Covers unpaid change orders

• Includes “through date” language beyond your last payment

Never waive your lien rights in a contract—especially in contracts drafted by out-of-state developers. Oregon law likely prohibits advance waivers, but don’t take chances. Cross out any waiver clauses before signing.

Common Lien Law Traps to Avoid

• Never agree to waive your lien rights in advance.

• Don’t delay sending pre-lien notices—they’re the foundation of your claim.

• Avoid non-segregated liens. Clearly break down labor, materials, and equipment charges.

• Always notify the owner and mortgage lender after filing your lien.

• Know your deadlines: 75 days to file a lien, 20 days to notify, 120 days to foreclose.

Key Takeaway

By understanding your rights and obligations under Oregon construction law, you can protect your business, ensure timely payment, and avoid costly legal missteps. Whether you’re a general contractor, subcontractor, or supplier, staying vigilant about contracts, notices, and deadlines is your best defense.

If in doubt, always consult with a construction attorney or lien service familiar with local laws—they can help you avoid costly mistakes and protect your bottom line.

FAQs: Oregon Construction Lien Law & Contract Best Practices

1. Can I file a mechanic’s lien in Oregon without a written contract?
Generally, no. If a written contract is required for the type of project you’re working on, then you cannot file a construction lien without one. Oregon’s lien statute requires a valid contract in most circumstances in order to enforce lien rights.

2. If I miss the 8-day deadline to send the Notice of Right to Lien, can I still send it?
Yes. While you can still send the notice after the 8-day window, it will only protect the work performed in the 8 days immediately prior to sending the notice. It’s a good idea to send it anyway—doing so may preserve lien rights for part of your work and may even help as a collections tool.

3. For the 5-day response deadline to an information request, when does the clock start?
The five calendar days likely begin when the request is sent, though the statute isn’t entirely clear. What is clear is that the request must be made to the party who sent the lien-related notice (which may not necessarily be the general contractor). For certainty, it's best to respond promptly upon receipt of any such request.

4. Is there a clause I can add to my contract to protect against tariff increases or material cost escalation?
Yes. You can include a modified escalation clause in your contract. One common approach uses a two-tiered structure tied to buyout timing—identifying which materials and subcontracts will be procured in the next 30 or 60 days, for example. This helps allocate risk: for instance, cost increases above 10% might be passed on to the owner, while increases below 10% could be absorbed by the general contractor via contingency. The clause can be tailored based on timing and thresholds.