Oregon Statutes - Chapter 701 - Construction Contractors and Contracts - Section 701.150 - Satisfaction of unpaid order from bond.

(1) A Construction Contractors Board final order that is not paid by the contractor and that:

(a) Arises out of a complaint filed under ORS 701.145 must be satisfied from a bond required for a residential contractor.

(b) Arises out of a complaint filed under ORS 701.146 must be satisfied from a bond required for a commercial contractor.

(2) If a board final order is not paid by the contractor, the board shall notify the surety on the bond. The surety may not pay on a complaint until the surety receives notice from the board that the complaint is ready for payment.

(3) Notwithstanding ORS 701.153 and 701.157, a bond is not subject to payment for a complaint that is filed more than 14 months after the earlier of:

(a) The expiration or cancellation date of the license that was in force when the work that is the subject of the complaint was completed or abandoned; or

(b) The date that the surety canceled the bond. [1971 c.740 §17; 1973 c.832 §60; 1981 c.618 §7; 1983 c.616 §15; 1987 c.414 §40c; 1989 c.928 §18; 1991 c.181 §11; 1997 c.387 §7; 1999 c.59 §208; 1999 c.402 §32; 2001 c.197 §16; 2001 c.427 §1a; 2007 c.793 §19; 2007 c.836 §69]

Note: The amendments to 701.150 by section 69, chapter 836, Oregon Laws 2007, become operative July 1, 2008, and apply to complaints filed against persons whose contractor licenses are issued or renewed on or after July 1, 2008. See section 70, chapter 836, Oregon Laws 2007. The text that is operative until July 1, 2008, including amendments by section 19, chapter 793, Oregon Laws 2007, is set forth for the userís convenience.

701.150. (1) If a Construction Contractors Board final order is not paid by the contractor, the board shall notify the surety on the bond. The surety may not pay on a complaint until the surety receives notice from the board that the complaint is ready for payment.

(2) If an order of the board that determines a complaint under ORS 701.145 becomes final by operation of law or on appeal and remains unpaid 10 days after the date the order becomes final, the complainant may file the order with the county clerk in any county of this state.

(3) Upon receipt, the clerk shall record the order in the County Clerk Lien Record. In addition to any other remedy provided by law, recording an order in the County Clerk Lien Record pursuant to the provisions of this section has the effect provided for in ORS 205.125 and 205.126, and the order may be enforced as provided in ORS 205.125 and 205.126.

(4) Payments from the surety bond of a contractor pursuant to board order and notice are satisfied in the following priority in any 90-day period. A 90-day period begins on the date the first complaint is filed with the board. Subsequent 90-day periods begin on the date the first complaint is filed with the board after the close of the preceding 90-day period. Within a 90-day period:

(a) Board orders as a result of complaints against a contractor by the owner of a residential or small commercial structure have payment priority to the full extent of the bond over all other types of complaints.

(b) If the complaints described in paragraph (a) of this subsection do not exhaust the bond, then amounts due as a result of all other types of residential or small commercial structure complaints filed within that 90-day period may be satisfied from the bond, except that the total amount paid from any one bond to nonowner complainants may not exceed $3,000.

(c) If payments involving residential and small commercial structures do not exhaust the bond, board orders and notice involving large commercial structure complaints are satisfied in the following priority, except that the total amount paid from any one bond to nonowner complainants may not exceed $3,000:

(A) Labor, including employee benefits.

(B) All other complaints involving large commercial structures except costs, interest and attorney fees.

(C) Any costs, interest and attorney fees the plaintiff may be entitled to recover.

(d) If the total complaints filed with the board against a contractor within 90 days after the board receives notice of the first complaint against the contractor exceed the amount of the bond available for those complaints, the bond shall be apportioned as the board determines, subject to the priorities established under this section.

(e) If the total amounts due as a result of complaints filed with the board within 90 days after the first complaint is filed do not exceed the amount of the bond available for those complaints, all amounts due as a result of complaints filed within the 90-day period shall have priority over all complaints subsequently filed until the amount of the bond available for the payment of complaints is exhausted.

(5) Notwithstanding subsection (4) of this section, a bond is not subject to payment for a complaint that is filed more than 14 months after the earlier of:

(a) The expiration or cancellation date of the license that was in force when the work that is the subject of the complaint was completed or abandoned; or

(b) The date that the surety canceled the bond.

(6) The total amount paid from any one bond for costs, interest and attorney fees may not exceed $3,000.

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Last modified: August 7, 2008