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Construction & Design Team
The Construction and Design Team at Dunn Carney represents owners, developers, design professionals, general contractors, subcontractors, suppliers and sureties in all phases of private and public construction projects. Combining their legal knowledge with specialized knowledge about the construction industry, attorneys practicing in this area provide sound legal and practical advice to clients to help them achieve their business goals.
Team members include:
Laura Althouse
Ken Antell
Jon Bennett
Dave Buono
Brian Cable
John Chambers
Jay Chock
Susan Glen
Heather Guthrie
Damon Henrie
Tim Hering
Bill Joseph
Eric Kekel
Gil Parker
David Zehntbauer
APRIL 2010
All Dunn Carney
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www.dunncarney.com
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851 SW Sixth Ave
Suite 1500
Portland, OR 97204
Tel: 503.224.6440
FAX: 503.224.7324
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New Legislation Eliminates Option for Compliance with Homebuyer Protection Act (HPA) of 2003 and Makes Other Revisions to Oregon Lien Law
Under the Homebuyer Protection Act (HPA) of 2003, ORS 87.007, a contractor selling a new residence or an existing residence with over $50,000 in improvements must protect the purchaser from liens related to the new construction or improvements. The Act is designed to protect homebuyers from construction liens when the buyer has already paid for the construction work itself, because construction work performed before the sale of a new or remodeled home may result in the filing of construction liens after the sale.
The Act offers various ways for the contractor/seller to protect a buyer against such liens. Specifically, the contractor/seller can:
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Purchase title insurance that does not exclude filed or unfiled claims of lien; |
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Retain at least 25% of the sales price in escrow; |
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Maintain a qualifying bond or letter of credit for at least 25% of the sales price; |
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Obtain lien waivers or releases from design professionals, suppliers, laborers and other subcontractors; or |
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Wait to complete the sale until after the deadline for filing of liens passes. |
The contractor/seller must also complete a required Notice of Compliance with the Homebuyer Protection Act (HPA) of 2003 form that indicates the method of protection selected.
House Bill 3689, passed during the 2010 special session of the Oregon State Legislature, eliminates one additional option for compliance with the Act: Currently, in addition to the above options for compliance, the contractor/seller can also obtain a signed, written waiver from the buyer. That option will be eliminated effective January 1, 2011.
In addition, House Bill 3689 will prohibit contractors who were not licensed with the Oregon Construction Contractor’s Board either at the time of contracting or the time they provided the labor, material or other services at issue from filing liens after January 1, 2011. Currently, unlicensed contractors may file liens but are prohibited from initiating lawsuits to foreclose such liens, or prosecute any other type of lawsuit.
House Bill 3689 also provides the Oregon Construction Contractors Board with the authority to place a licensed contractor on probation if the contractor accepts 50 percent of the contract price as a deposit for residential construction but either (1) fails to perform the construction in a diligent manner, or in accordance with the contract (expect litigation over the meaning of these terms), or (2) fails to perform any construction work and further fails to return the deposit within 10 days of receiving a demand from the owner for the same. These provisions will also become effective on January 1, 2011.
For more information, please feel free to contact Bill Joseph.
Bill Joseph is a partner at Portland law firm Dunn Carney Allen Higgins & Tongue, LLP and a member of the firm’s Construction & Design Team. His practice focuses on business litigation and transactional law with a specific emphasis on helping those in construction and related industries.
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