3 things to know about Construction Liens

One of the most frequently asked questions we get when a  client decides to move forward with us on their project is about Construction Liens. And we get it; it’s confusing.

What is a construction lien?

Construction liens have been a part of Oregon’s law for over 100 years. Under this law, anyone who constructs improvements on property, supplies materials, rents equipment, or provides services for improvements has a right to collect payment from the property if they are not paid. If the general contractor is not paid or does not pay the subcontractors, laborers, material suppliers, or equipment rental companies, those persons may claim a lien against the property.

In years past, the industry has been lax on doing all the necessary paperwork. Mountainwood Homes keeps up on paperwork and encourages its trade partners to do the same.

What is the purpose of a Notice of Right to a Lien?

It lets the property owner know of the possibility that a lien could be placed on their property by subcontractors, employees, material suppliers, and equipment rental companies who are not paid. A Notice of Right to a Lien gives the property owner the name of the subcontractor, employee, material, equipment, or service provider and describes the materials, equipment, or services ordered. So you will likely receive a Right to Lien form from some trades as well.

Here’s how it works:

– Mountainwood Homes or its trade partners will send you, the client, a ‘Right to Lien’ form within a few days of signing a contract with us.

– The State of Oregon requires us to send this to you as Certified Mail to comply with state law. This means you will receive a postcard in your mailbox, and you’ll have to go to the Post Office to sign and receive the Right to Lien.

– That form will state that you have requested us to do work on your home at your particular address.

– You file this form away, and the project gets underway.

 

Construction Liens are a formal way for companies to protect themselves. We pride ourselves in paying our trade partners and not having to ever exercise our lien right. Lien law makes consumers be better decision makers on who they allow to walk in their home.

Read the entire Construction Liens pamphlet here.

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