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OREGON CONTRCTOR'S LICENSE BOARD ORS
OREGON CONTRACTOR'S LICENSE LAW Excerpts. The entire statute is at: http://ccbed.ccb.state.or.us/WEBpdf/ccb/statutes/ORS%20701.pdf
Effective 7/01/08 701.010 Exemption from licensure; rules. The Construction Contractors Board may adopt rules to make licensure optional for persons who offer, bid or undertake to perform work peripheral to construction, as defined by administrative rule of the board. The following persons are exempt from licensure under this chapter:
direction of, a residential general contractor.
(8) A person licensed in one of the following trades or professions when operating within the scope of that license: (a) An architect licensed by the State Board of Architect Examiners. (b) A registered professional engineer licensed by the State Board of Examiners for Engineering and Land Surveying. (c) A water well contractor licensed by the Water Resources Department. (d) A sewage disposal system installer licensed by the Department of Environmental Quality. (e) A landscape contracting business licensed under ORS 671.510 to 671.760 that constructs fences, decks, arbors, patios, landscape edging, driveways, walkways or retaining walls and that meets the applicable bonding requirements under ORS 671.690. (f) A pesticide operator licensed under ORS 634.116 who does not conduct inspections for wood destroying organisms for the transfer of real estate. (g) An appraiser certified or licensed under ORS chapter 674 or an appraiser assistant registered under ORS chapter 674 by the Appraiser Certification and Licensure Board.
Effective 1/1/08 to 6/30/2010 701.026 License requirement; subcontractor licensing; landscaping. (1) A person or joint venture shall not undertake, offer to undertake or submit a bid to do work as a contractor unless that person or joint venture has a current, valid license issued under this chapter by the Construction Contractors Board. A partnership or joint venture is licensed for the purpose of offering to undertake work as a contractor on a structure if any of the partners or joint venturers whose name appears in the business name of the partnership or joint venture is licensed under this chapter. (2) A contractor may not hire any subcontractor or other contractor to perform work unless the subcontractor or contractor is licensed under this chapter or exempt from licensure under ORS 701.010. (3) Except as provided in ORS 671.540, a contractor that is not licensed under ORS 671.560 shall hire a person licensed under ORS 671.560 to perform landscaping work. [Formerly 701.055]
Effective 1/1/08-6/30/2010 701.035 Applicant required to be independent contractor to be eligible for a license; classes of licenses. (1) An applicant must qualify as an independent contractor under ORS 670.600 to be eligible for a license with the Construction Contractors Board. (2) The board shall establish two classes of independent contractor licenses: (a) The nonexempt class is composed of the following entities: (A) Sole proprietorships, partnerships, corporations, limited liability companies with one or more employees; and (B) Partnerships, corporations and limited liability companies with more than two partners, corporate officers or members, if any of the partners, corporate officers or members are not part of the same family and related as parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren. (b) The exempt class is composed of all sole proprietorships, partnerships, corporations and limited liability companies that do not qualify as nonexempt. All partnerships, corporations and limited liability companies must have an identification number issued for federal tax purposes. (3) If a person who qualifies for a license under subsection (2)(b) [non-exempt class] of this section hires one or more employees or falls into any of the categories set out in subsection (2)(a)(B) of this section, the person is subject to penalties under ORS 701.992 for improper licensing. The person must reapply to the board in the correct class. (4) The decision of the board that a person is an independent contractor applies only when the person is performing work of the nature described in ORS 701.026 and 701.060. [1989 c.870 §4; 1995 c.216 §1; 1999 c.402 §13]
Effective 7/01/2008 701.031 Evidence of doing business as contractor. (1) It is prima facie evidence that a person is doing business as a contractor if: (a) The person for that person’s own use performs, employs others to perform, or for compensation and with the intent to sell the structure arranges to have performed, work described in ORS 701.005 (5); and (b) Within any 36-month period the person offers for sale two or more newly built structures on which work described in paragraph (a) of this subsection was performed. (2) Licensure under this chapter is prima facie evidence that the licensee conducts a separate, independent business. [2007 c.114 §3]
Effective 7/1/08 701.038 Residential limited contractors. A residential limited contractor may not: (1) Perform work as a contractor exceeding $40,000 in gross annual volume; or (2) Enter into contracts to perform work as a contractor in excess of $5,000. [2007 c.836 §5] Note: 701.038 becomes operative July 1, 2008. See section 70, chapter 836, Oregon Laws 2007.
Effective 7/1/08 – 6/30/2010 701.042 Licensed developers; residential or commercial developers. A licensed developer or a residential or commercial developer: (1) Shall act only in association with licensed general contractors, one or a combination of whom must have sole responsibility for overseeing all phases of construction activity on a property; and (2) May not perform any construction work on a property. [2007 c.836 §6] Note: 701.042 becomes operative July 1, 2008. See section 70, chapter 836, Oregon Laws 2007. Note: The amendments to 701.042 by section 7, chapter 836, Oregon Laws 2007, become operative July 1, 2010. See section 70, chapter 836, Oregon Laws 2007. The text that is operative on and after July 1, 2010, is set forth for the user’s convenience.
Effective 7/1/08 701.046 License application. (1) An applicant for a construction contractor license must submit the application on a form prescribed by the Construction Contractors Board. The application shall include, but not be limited to, the following information: (a) The endorsement being sought. (b) A list of construction debts involving the applicant, or an owner or officer of the applicant, if the order, award, penalty or judgment that establishes the debt was issued within the preceding five years. (c) For each person described in paragraphs (h) and (i) of this subsection, a Social security number. (d) Workers' compensation insurance account number, if the applicant is required to have workers’ compensation insurance. (e) Unemployment insurance account number, if the applicant is required to have unemployment insurance. (f) State withholding tax account number, if the applicant is required to withhold state income tax. (g) Federal employer identification number, if the applicant is required to have a federal employer identification number. (h) The name and address of: (A) Each partner, if the applicant is a partnership, limited liability partnership or foreign limited liability partnership. (B) The general partner, if the applicant is a limited partnership. (C) Each joint venturer, if the applicant is a joint venture. (D) The owner, if the applicant is a sole proprietorship. (E) The officers, if the applicant is a corporation. (F) The manager and each member, if the applicant is a manager-managed limited liability company. (G) Each member, if the applicant is a membermanaged limited liability company. (H) The responsible managing individual designated by the applicant. (I) Each trustee, if the applicant is a trust. (i) The name and address of the following if the applicant is a partnership, limited liability partnership, foreign limited liability partnership, joint venture,
membermanaged limited liability company: (A) Each partner in a partnership, limited liability partnership or foreign limited liability partnership that is a partner, joint venturer or member of the applicant. (B) Each general partner in a limited partnership that is a partner, joint venturer or member of the applicant. (C) Each joint venturer in a joint venture that is a partner, joint venturer or member of the applicant. (D) The manager and each member of a managermanaged limited liability company that is a partner, joint venturer or member of the applicant. (E) Each member of a member-managed limited liability company that is a partner, joint venturer or member of the applicant. (F) Each officer of a corporation that is a partner,
joint venturer or member of the applicant. (G) The general partner in a limited partnership that is a partner, joint venturer or member of the applicant. (H) Each individual who has a controlling ownership interest in, or management authority over, the applicant and who meets criteria adopted by the board by rule. (j) For each person described in paragraphs (h) and (i) of this subsection, information as required by board rule regarding the following if related to construction activities: (A) A final judgment against the person by a court in any state entered within five years preceding the application date that requires the person to pay money to another person or to a public body if the judgment remains unsatisfied on the application date. (B) A final order against the person by an administrative agency in any state issued within five years preceding the application date that requires the person to pay money to another person or to a public body if the order remains unsatisfied on the application date. (C) A court action against the person in any state pending on the application date that alleges the person owes money to another person or to a public body. (D) An action by an administrative agency in any state pending on the application date that seeks an order that the person pay money to another person or to a public body. (E) A conviction for a crime listed in ORS 701.098(1)(i) entered within five years preceding the application date. (F) An indictment for a crime listed in ORS 701.098(1)(i) filed within five years preceding the application date. (k) The basis on which the applicant meets the standards for independent contractor status under ORS 670.600.
Effective 1/1/08 to 6/30/08 Note: The amendments to 701.060 by section 17, chapter 836, Oregon Laws 2007, become operative July 1, 2008, and apply to licenses 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 9, chapter 114, Oregon Laws 2007, is set forth for the user’s convenience.
701.060. (1) Any contractor licensed under this chapter may at any time apply for a license in another category. The Construction Contractors Board may charge a transfer fee not to exceed $20 for each additional license.
(2) If a contractor applies for a license pursuant to subsection (1) of this section, all construction, alteration, improvement, moving over public highways, roads or streets, demolition or repair performed by that contractor on buildings of all types shall be subject to the provisions of this chapter and to regulation by the board. Licensure under subsection (1) of this section shall be exclusive as provided in ORS 701.325(6).
Effective 7/1/08 701.068 Bonding requirements; action against surety; rules. (1) An applicant for issuance or renewal of a contractor license shall file with the Construction Contractors Board a surety bond with one or more corporate sureties authorized to do business in this state in the amount set forth in ORS 701.081 or 701.084. (2) If an applicant for issuance, renewal or an additional endorsement of a license will hold endorsements as both a residential contractor and a commercial contractor, the applicant shall file with the board a surety bond for each endorsement in the amount set forth in ORS 701.081 or 701.084. (3) The surety bond must provide that the applicant, with regard to work subject to this chapter, will pay amounts ordered paid by the board under ORS 701.145 or 701.146. Bonds filed under this section shall remain in effect for at least one year or until depleted by payments under ORS 701.150, 701.153 and 701.157, unless the surety sooner cancels the bond. At the discretion of the surety the bond may be continued for an additional period by continuation certificate. Except as provided in subsection (4) of this section, the aggregate liability of the surety under the bond for complaints against the contractor may not exceed the penal sum of the bond no matter how many years the bond is in force. Except as provided in subsection (4) of this section, an extension by continuation certificate, reinstatement, reissue or renewal of the bond may not increase the liability of the surety. (4) The board, by rule, may require a licensee to obtain a new surety bond if, pursuant to a board order for payment of a complaint described in ORS 701.140, the surety pays an amount out of the bond of the licensee. The new surety bond must be in the applicable amount set forth in ORS 701.081 or 701.084, unless a higher amount is required by a board condition or rule described in subsection (5) or (6) of this section. The board may allow a licensee to obtain, instead of a new bond, a certification that the surety remains liable for the full penal sum of the bond, notwithstanding payment by the surety on the complaint. (5) If the amount the licensee must pay against the bond under subsection (3) of this section exceeds the amount of the bond, the board shall suspend the contractor’s license until the amount owed is paid. The board, as a condition of ending the suspension, may require a contractor requesting reinstatement of a license to file a bond of an amount up to five times as much as the amount required ordinarily of a licensee under ORS 701.081 or 701.084. (6) The board by rule may establish conditions for applicants or persons licensed under this chapter under which the applicant or licensee must file a bond of an amount up to five times as much as the amount required ordinarily of an applicant or licensee under ORS 701.081 or 701.084. The board may reduce the amount of bond it would otherwise require if the contractor demonstrates satisfactory completion of approved elective classes on dispute resolution and prevention, basic accounting and record keeping or such other classes as the board may prescribe. (7) The bond required under this section is for the exclusive purpose of payment of final orders and arbitration awards of the board in accordance with this chapter. (8) Upon determination under ORS 701.145 or 701.146 of a complaint against a contractor who holds a bond required under this section, the board shall notify the surety on the bond of the final order in a manner determined by the board by rule. The notification shall include a list of all complaints upon which a final order has been issued. (9) A court action may not be commenced against a surety on a bond required under this section until 30 days after the date that the surety is notified by the board under ORS 701.150 that payment is due on the final order. (10) In any action against a surety on a bond under this section that is based on the failure of the surety to pay a final order, the court may award: (a) Costs; (b) Reasonable attorney fees to the prevailing party as part of the costs; and (c) Twice the amount of any damages that the board ordered the surety to pay on the complaint, if the surety arbitrarily and capriciously refused to pay upon order of the board. [Formerly 701.085]
Effective 7/1/08 701.073 Insurance required of licensed contractors. (1) Except as provided in subsection (2) of this section, a contractor who possesses a license as required under this chapter shall have in effect public liability, personal injury and property damage insurance covering the work of the contractor that is subject to this chapter, including the covering of liability for products and completed operations according to the terms of the policy and subject to applicable policy exclusions, for an amount not less than the applicable amount set forth in 701.081 or 701.084.
(2) The contractor shall provide satisfactory evidence to the Construction Contractors Board at the time of licensure and renewal that the insurance required by subsection (1) of this section has been procured and is in effect. [Formerly 701.105]
701.075 [1971 c.740 §9; 1973 c.832 §56; 1979 c.312 §2; 1981 c.618 §12; 1989 c.624 §2; 1989 c.870 §2; 1989 c.928 §7; 1995 c.216 §6; 1999 c.344 §1; 1999 c.402 §18a; 2001 c. 160 §2; 2001 c.196 §5; 2003 c.675 §73; 2005 c.432 §9; 2007 c.478 §2; 2007 c. 648 §24; 2007 c.836 §58a; renumbered 701.046 in 2007] 701.077 [2005 c.432 §4; 2007 c.648 §25; renumbered 701.094 in 2007] 701.078 [2005 c.432 §3; 2007 c.113 §1; 2007 c.648 §26; 2007 c.836 §21; renumbered 701.091 in 2007] 701.080 [1979 c.312 §5; 1983 c.616 §9; 1989 c.928 §8; 1997 c.301 §1; 1999 c.402 §20; renumbered 701.117 in 2007]
Effective 7/1/08 701.081 Residential contractors; bond; insurance; responsible managing individual. (1) A residential general contractor shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $20,000; (b) Obtain general liability insurance under ORS 701.073 in an amount of not less than $500,000; and (c) Have a responsible managing individual who meets the requirements of ORS 701.091 .
(2) A residential specialty contractor shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $15,000; (b) Obtain general liability insurance under ORS 701.073 in an amount not less than $300,000; and (c) Have a responsible managing individual who meets the requirements of ORS 701.091. (3) A residential limited contractor shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $10,000; (b) Obtain general liability insurance under ORS 701.073 in an amount not less than $100,000; and (c) Have a responsible managing individual who meets the requirements of ORS 701.091. (4) A residential developer shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $20,000; and (b) Obtain general liability insurance under ORS 701.073 in an amount not less than $500,000. [2007 c. 836 §3] Note: 701.081 becomes operative July 1, 2008, and applies to licenses issued or renewed on or after July 1, 2008. See section 70, chapter 836, Oregon Laws 2007.
Effective 7/1/08 701.122 Training requirements for individuals and businesses; testing of business license applicant; exceptions; rules. (1) The Construction Contractors Board, by rule, shall impose training requirements for individuals and businesses seeking to be licensed under this chapter. The training required by the board must relate to business practices and laws affecting construction contractors. The board shall adopt standards for programs that provide training that meets the requirements of this subsection. (2) In establishing training requirements under subsection (1) of this section, the board shall take into consideration the availability of training programs within the state and shall encourage training providers to use the most up-to-date technology. The board shall recognize and grant credit for training provided by private organizations if the training program meets the standards established by the board under subsection (1) of this section. The board periodically shall review the qualifications of private organizations and instructors to determine compliance with the program standards. The board shall develop and make available to the public a list of public and private programs that provide training that meets the training requirements established by the board under subsection (1) of this section. (3) The board, by rule, shall approve a test for applicants for licensing under ORS 701.046. The test shall measure the applicant’s knowledge regarding business practices and laws that are the subject of the training required under subsection (1) of this section. (4) Subsections (1) and (3) of this section do not apply to an applicant for licensing with endorsement solely as a residential or commercial developer. [Formerly 701.072]
CONSTRUCTION CONTRACTS AND NOTICES Effective 1/1/08 701.305 Requirement for written contract, standard contractual terms; rules. (1) A contractor may not perform work subject to this section for an owner of a residential structure or zero-lot-line dwelling without a written contract if the aggregate contract price exceeds $2,000. If the price of a contract was initially less than $2,000, but during the course of performance the contract exceeds that amount, the contractor shall mail or otherwise deliver a written contract to the owner not later than five days after the contractor knows or should reasonably know that the contract price will exceed $2,000. Failure to have a written contract will not void the contract.
(2) The Construction Contractors Board shall adopt rules that require a contractor to use standard contractual terms in a construction contract for which subsection (1) of this section requires a written contract. The standard contractual terms shall be clear, use words of common understanding and shall include but need not be limited to: (a) A statement that the contractor is licensed by the board; (b) The name, license number, address and telephone number of the contractor as shown on board records on the date the contract is entered into; (c) An acknowledgment of a written offer of a warranty, if an offer is required by ORS 701.320, and indication of the acceptance or rejection of the offered warranty; (d) For a residential structure contract, a summary of the notices required under ORS 87.093 or under rules adopted under ORS 701.330 and 701.335 (2), on the contractor’s bid proposal; (e) Acknowledgment of the receipt of the maintenance information required by the board under ORS 701.335; and (f) An explanation of the property owner’s rights under the contract, including, but not limited to, the ability to file a claim with the board and the existence of any mediation or arbitration provision in the contract, set forth in a conspicuous manner as defined by the board by rule. [2007 c.648 §7]
Effective 1/1/08 701.310 Cancellation of contract. (1) A property owner who enters into an initial written contract for the construction, improvement or repair of a residential structure or zero-lot-line dwelling may cancel the contract by delivery of a written notice of cancellation anytime prior to 12 midnight at the end of the next business day. The notice of cancellation may be delivered in any written form or by any means that can readily be converted to written form, including, but not limited to, facsimile, electronic mail and regular mail. The notice must state the intention of the property owner to cancel the contract. (2) Subsection (1) of this section does not allow a property owner to cancel a contract: (a) If both parties agree that work is to begin before the cancellation period has expired; (b) After a contractor substantially begins the residential construction, improvement or repair; or (c) When an initial contract is being modified after expiration of the initial cancellation period. [2007 c.648 §8]
Offer of warranty; withdrawal of contract offer. (1) A licensee that enters into a contract to construct a new residential structure or zero-lot-line dwelling shall make a written offer to the first purchaser or owner of the structure or dwelling of a warranty against defects in materials and workmanship for the structure or dwelling. The first purchaser or owner of the structure or dwelling may accept or refuse the offer of a warranty by the contractor. If a contractor makes the written offer of a warranty before the contractor and owner both sign a written construction contract and the owner refuses the offered warranty, the contractor may withdraw the offer to construct the structure or dwelling. (2) Subsection (1) of this section does not apply to a residential structure that is a manufactured dwelling as defined in ORS 446.003. [2007 c.648 §11] Note: 701.320 applies to new residential structures and zerolot- line dwellings for which the contractor enters into a written construction contract on or after July 1, 2008. See section 30, chapter 648, Oregon Laws 2007
Effective 1/1/08 701.330 Consumer notice form; notice of procedure form; rules. (1) The Construction Contractors Board shall adopt by rule a consumer notice form designed to inform a property owner of the actions the property owner should take to protect the owner in a residential repair, remodel or construction project. The form shall briefly describe and identify additional sources of information regarding: (a) Contractor licensing standards; (b) Contractor bond and insurance requirements; (c) The requirement to offer a warranty under ORS 701.320; and (d) Other information specified by the board. (2) The board shall adopt by rule a notice of procedure form that briefly describes and identifies additional sources of information regarding the procedure described under ORS 701.560 to 701.595 and other information specified by the board. (3) The consumer notice form and notice of procedure form adopted by the board shall include signature lines for the contractor and the property owner. (4) The board shall adopt rules specifying the time and manner for a contractor to deliver a consumer notice form and notice of procedure form to a property owner. (5) The board may adopt rules that require a contractor to maintain evidence of delivery of the consumer notice form and notice of procedure form and that specify the retention period for and the form of that evidence. [2007 c.648 §14]
Effective 7/1/08 701.348 Sewer contractor requirements. (1) Every person offering to undertake or undertaking construction of building sewer piping shall comply with the requirements of ORS chapter 701. (2) Every person submitting a bid or a written estimate of the costs to construct building sewer piping shall provide to potential customers, prior to an agreement to perform, the following: (a) The person's Construction Contractors Board license number; (b) The applicable bonding and liability coverage; and (c) The statement described in ORS 701.325 (1). (3) Any person licensed under ORS 701.026 may install a building sewer after obtaining a permit for plumbing inspection under ORS 447.095. (4) As used in this section, “building sewer” means that part of the system of drainage piping that conveys sewage into a septic tank, cesspool or other treatment unit that begins five feet outside the building or structure within which the sewage originates. [Formerly 701.138] [2007 c.648 §13]
Effective 7/1/08 701.605 Recording of written warranty agreement. (1) To facilitate the handling of warranty work or remediation of defects to a new commercial or residential structure or zero-lot-line dwelling, a contractor who builds the structure may present for recording in the deed records of the county in which the new structure is built a written warranty agreement that: (a) Is signed by the contractor and the original owner of the new structure; (b) Sets forth any express warranties furnished by the contractor; and (c) Contains the names of the contractor and the original property owner, the title of the document, a legal description of the property and acknowledgement of the signatures of the parties in the same manner as the parties to a deed are acknowledged. (2) The warranties set forth in the recorded warranty agreement: (a) Benefit and burden subsequent owners of the structure. (b) Cease to affect title to the property 10 years after the date the instrument is recorded. [2005 c.169 § 2; 2007 c.648 §29] Note: See note under 701.560.
CONSTRUCTION CONTACT PAYMENTS Unchanged 701.620 Definitions for ORS 701.620 to 701.640. As used in ORS 701.620 o 701.640: (1) “Construction contract” means a written or oral construction agreement, including all plans, specifications and addenda relating to: (a) Excavating, landscaping, demolishing and detaching existing structures, leveling, filling in and other preparation of land for the making and placement of a building, structure or superstructure; (b) Creation or making of a building, structure or superstructure; and (c) Alteration, partial construction and repairs done in and upon a building, structure or superstructure. (2) “Contractor” has the meaning given that term in ORS 87.005. (3) “Days” means calendar days. (4) “Material supplier” means any person providing materials or products under a construction contract by any contractual means including oral authorization, written contract, purchase order, price agreement or rental agreement. (5) “Original contractor” has the meaning given that term in ORS 87.005. (6) “Owner” has the meaning given that term in ORS 701.410. (7) “Subcontractor” has the meaning given that term in ORS 87.005. [2003 c.675 §54] Note: 701.620 to 701.645 were enacted into law by the
Legislative Assembly but were not added to or made a part of ORS chapter 701 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation. 701.625 Progress payments; alternative billing cycle; certification of billing or estimate; payment in full; prohibited agreements. (1) By mutual agreement with an original contractor, an owner may make progress payments to the original contractor on a construction contract that is anticipated to last less than 60 days. An owner shall make progress payments to the original contractor on all other construction contracts. Progress payments shall be made on the basis of a certified billing or estimate for the work performed and the materials or products supplied during the preceding 30-day billing cycle, or an alternate billing cycle as stated in the construction contract. If billings or estimates are to be submitted in alternate, rather than 30-day billing cycles, the construction contract shall specify the alternate billing cycles in a clear and conspicuous manner as prescribed in subsection (2) of this section. Except as provided in subsection (3) of this section, the owner shall make progress payments to the original contractor within 14 days after the date the billing is submitted pursuant to subsection (4) of this section.` (2) A construction contract may provide for an alternate billing cycle if the plans and specifications specifically set forth that there is an alternate billing` following statement: Notice of Alternate Billing Cycle The contract will allow the owner to require the submission of billings or estimates in billing cycles other than 30-day cycles. Billings or estimates for the contract shall be submitted as follows: _______________________________________ _______________________________________ _______________________________________ (3) An owner may make progress payments later than 14 days after the date the billing or estimate is submitted if: (a) The owner is responsible for providing plans and specifications that expressly allow in a clear and conspicuous manner an extended payment, defined by a specified number of days after the billing or estimate is submitted; and (b) The owner provides for each page of plans and specifications a statement substantially similar to the following statement:
Notice of Extended Payment Provision
The contract will allow the owner to make payment within _____ days after the date a billing or estimate is submitted.
(4) The owner is deemed to have received the billing or estimate when the billing or estimate is submitted to any person designated by the owner for the receipt, review or approval of the billing or estimate. A billing or estimate is deemed to be certified 10 days after the owner receives the billing or estimate, unless before that time the owner or the owner’s agent prepares and issues a written statement detailing those items in the billing or estimate that are not approved. An owner may decline to approve a billing or estimate or portion of a billing or estimate for:
(a) Unsatisfactory work progress; (b) Defective construction work, materials or products not remedied; (c) Disputed work, materials or products, not to exceed 150 percent of the amount in dispute; (d) Failure to comply with other material provisions of the construction contract; (e) Third party claims filed or reasonable evidence that such a claim will be filed; (f) Failure of the original contractor or a subcontractor to make timely payments to subcontractors and material suppliers for labor, equipment, materials and products; (g) Damage to the owner; (h) Reasonable evidence that the construction contract cannot be completed for the unpaid balance of the construction contract sum; or (i) Other items as allowed under the contract terms and conditions.
(5) An owner may withhold from a progress payment an amount that is sufficient to pay the direct expenses the owner reasonably expects to incur to correct any items set forth in writing pursuant to subsection (4) of this section. The owner may also withhold a reasonable amount as retainage as defined in ORS 701.410.
(6) An owner may extend the period within which the billing or estimate may be certified if: (a) The owner is responsible for providing plans and specifications that expressly allow in a clear and conspicuous manner an extended period within which a billing or estimate may be certified; and (b) The owner provides for each page of plans and specifications, including bid plans and construction plans, a statement substantially similar to the following statement:
Notice of Extended Certification Period Provision
The contract will allow the owner to certify billings and estimates within _____ days after the billings and estimates are received from the original contractor.
(7) After a subcontractor or material supplier submits a bid or proposal or other written pricing information to an original contractor, an owner and the original contractor may change the specified number of days after certification during which the owner may make payment to the original contractor or within which the owner must certify a billing or estimate. Any original contractor, subcontractor or material supplier that does not provide written consent to the change will continue to be paid as indicated in the plans and specifications.
(8) When an original contractor completes and an owner approves all work under a construction contract, the owner shall make payment in full of all remaining amounts due on the construction contract within seven days. When an original contractor completes and an owner approves all work under a portion of a construction contract for which the contract states a separate price, the owner shall make payment in full of all remaining amounts due on that portion of the construction contract, subject to the satisfaction of any issue described in subsection (4) of this section or ORS 701.630 (4).
(9) Payment is not required under this section unless the original contractor provides the owner with a billing or estimate for the work performed or the materials or products supplied in accordance with the terms of the construction contract between the parties. (10) A construction contract may not alter the right of any original contractor, subcontractor or material supplier to receive prompt and timely progress payments as provided under this section. (11) If an owner or a person designated by the owner as responsible for making progress payments on a construction contract does not make a timely payment under this section, the owner shall pay the original contractor interest on the unpaid balance at the rate of one and one-half percent a month or fraction of a month, or at a higher rate as the parties to the construction contract may agree. (12) On the written request of a subcontractor, the owner shall notify the subcontractor within five days after the issuance of a progress payment to the original contractor. On the written request of a subcontractor, the owner shall notify the subcontractor within five days after the owner makes the final payment to the original contractor on the construction contract. (13) In any action, claim or arbitration brought to collect payments or interest pursuant to this section, the prevailing party shall be awarded reasonable costs and attorney fees. (14) If the owner and original contractor are a single entity, that entity shall pay subcontractors and material suppliers within 14 days after the billing or estimate is received unless the deadlines for certification or payment have been modified pursuant to subsection (3) or (6) of this section. [2003 c.675 §55] Note: See notes under 701.620
701.630 Payments to subcontractors and material suppliers; failure to pay; omission of payments; board discipline.
(1) Performance by an original contractor, subcontractor or material supplier in accordance with the provisions of a construction contract entitles the original contractor, subcontractor or material supplier to payment from the party with whom the original contractor, subcontractor or material supplier contracts. (2) If a subcontractor or material supplier has performed in accordance with the provisions of a construction contract, the original contractor shall pay to the subcontractor or material supplier, and each subcontractor shall pay to its subcontractors or material suppliers, the full amount received for such subcontractor’s work and for materials and products supplied based on the subcontract or purchase order terms and conditions within seven days of receipt by the original contractor or subcontractor of a progress payment or final payment. Payment is not required under this subsection unless a subcontractor or material supplier provides to the original contractor or subcontractor a billing or invoice for the work performed or materials or products supplied in compliance with the terms of the contract between the parties. Each subcontractor or material supplier must provide an appropriate waiver of any mechanic’s or materialman’s lien in accordance with subcontract or purchase order terms and conditions. The original contractor or subcontractor may require that such waivers of lien be notarized. (3) Any failure to reasonably account for the application or use of payments, as proven in a legal proceeding authorized under the terms of the construction contract, may constitute grounds for disciplinary action by the Construction Contractors Board under ORS 701.098. (4) Nothing in this section prevents an original contractor when submitting a bill or estimate to an owner, or a subcontractor when submitting a bill or estimate to the original contractor, from omitting from the bill estimate amounts withheld from payment to a subcontractor or material supplier for: (a) Unsatisfactory work progress; (b) Defective construction work, materials or products not remedied; (c) Disputed work, materials or products, not to exceed 150 percent of the amount in dispute; (d) Failure to comply with other material provisions of the construction contract; (e) Third party claims filed or reasonable evidence that such a claim will be filed; (f) Failure of the subcontractor to make timely payments to subcontractors and material suppliers for labor, equipment, materials and products; (g) Damage to an original contractor, subcontractor or material supplier; (h) Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract sum; (i) A reasonable amount for retainage, as defined in ORS 701.410, that does not exceed the actual percentage allowed by the subcontract or purchase order; or (j) Other items as allowed under the subcontract or purchase order terms and conditions. (5) If a progress or final payment to a subcontractor or material supplier is delayed by more than seven days after receipt of a progress or final payment by an original contractor or subcontractor, the original contractor or subcontractor shall pay its subcontractor or material supplier interest beginning on the eighth day, except during periods of time during which payment is withheld pursuant to subsection (4) of this section, at the rate of one and one-half percent a month or a fraction of a month on the unpaid balance or at such higher rate as the parties agree. (6) In any action, claim or arbitration brought to collect payments or interest under this section, the prevailing party shall be awarded reasonable costs and attorney fees. [2003 c.675 §56] Note: See notes under 701.620.
UNIFORM ARBITRATION ACT 36.600. Definitions. As used in ors 36.600 to 36.740:
36.610. Effect of agreement to arbitrate; nonwaivable provisions. (1) Except as otherwise provided in this section, a party to an agreement to arbitrate or to an arbitration proceeding may waive, or the parties may vary the effect of, the requirements of ORS 36.600 to 36.740 to the extent permitted by law. (2) Before a controversy arises that is subject to an agreement to arbitrate, a party to the agreement may not: (a) Waive or agree to vary the effect of the requirements of this section or ORS 36.615 (1), 36.620 (1), 36.630, 36.675 (1) or (2), 36.720 or 36.730; (b) Agree to unreasonably restrict the right under ORS 36.635 to notice of the initiation of an arbitration proceeding; (c) Agree to unreasonably restrict the right under ORS 36.650 to disclosure of any facts by a neutral arbitrator; or (d) Waive the right under ORS 36.670 of a party to an agreement to arbitrate to be represented by a lawyer at any proceeding or hearing under ORS 36.600 to 36.740, but an employer and a labor organization may waive the right to representation by a lawyer in a labor arbitration. (3) A party to an agreement to arbitrate or arbitration proceeding may not waive, or the parties may not vary the effect of, the requirements of this section or ORS 36.625, 36.660, 36.680, 36.690 (4) or (5), 36.700, 36.705, 36.710, 36.715 (1) or (2), 36.735, 36.740 or section 3 (1) or (3) or 31, chapter 598, Oregon Laws 2003. (4) Subsections (2) and (3) of this section do not apply to agreements to arbitrate entered into by two or more insurers, as defined by ORS 731.106, or selfinsured persons for the purpose of arbitration of disputes arising out of the provision of insurance. [2003 c. 598 §4] Note: See note s under 36.600.
Effective 7/01/08 701.010 Exemption from licensure; rules. The Construction Contractors Board may adopt rules to make licensure optional for persons who offer, bid or undertake to perform work peripheral to construction, as defined by administrative rule of the board. The following persons are exempt from licensure under this chapter:
direction of, a residential general contractor.
(7) A person performing work on a property that person owns or performing work as the owner's employee, whether the property is occupied by the owner or not, or a person performing work on that person's residence, whether or not that person owns the residence. This subsection does not apply to a person performing work on a structure owned by that person or the owner's employee if the work is performed in the pursuit of an independent business with the intent of offering the structure for sale before, upon or after completion.
(8) A person licensed in one of the following trades or professions when operating within the scope of that license: (a) An architect licensed by the State Board of Architect Examiners. (b) A registered professional engineer licensed by the State Board of Examiners for Engineering and Land Surveying. (c) A water well contractor licensed by the Water Resources Department. (d) A sewage disposal system installer licensed by the Department of Environmental Quality. (e) A landscape contracting business licensed under ORS 671.510 to 671.760 that constructs fences, decks, arbors, patios, landscape edging, driveways, walkways or retaining walls and that meets the applicable bonding requirements under ORS 671.690. (f) A pesticide operator licensed under ORS 634.116 who does not conduct inspections for wood destroying organisms for the transfer of real estate. (g) An appraiser certified or licensed under ORS chapter 674 or an appraiser assistant registered under ORS chapter 674 by the Appraiser Certification and Licensure Board.
Effective 1/1/08 to 6/30/2010 701.026 License requirement; subcontractor licensing; landscaping. (1) A person or joint venture shall not undertake, offer to undertake or submit a bid to do work as a contractor unless that person or joint venture has a current, valid license issued under this chapter by the Construction Contractors Board. A partnership or joint venture is licensed for the purpose of offering to undertake work as a contractor on a structure if any of the partners or joint venturers whose name appears in the business name of the partnership or joint venture is licensed under this chapter. (2) A contractor may not hire any subcontractor or other contractor to perform work unless the subcontractor or contractor is licensed under this chapter or exempt from licensure under ORS 701.010. (3) Except as provided in ORS 671.540, a contractor that is not licensed under ORS 671.560 shall hire a person licensed under ORS 671.560 to perform landscaping work. [Formerly 701.055]
Effective 1/1/08-6/30/2010 701.035 Applicant required to be independent contractor to be eligible for a license; classes of licenses. (1) An applicant must qualify as an independent contractor under ORS 670.600 to be eligible for a license with the Construction Contractors Board. (2) The board shall establish two classes of independent contractor licenses: (a) The nonexempt class is composed of the following entities: (A) Sole proprietorships, partnerships, corporations, limited liability companies with one or more employees; and (B) Partnerships, corporations and limited liability companies with more than two partners, corporate officers or members, if any of the partners, corporate officers or members are not part of the same family and related as parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren. (b) The exempt class is composed of all sole proprietorships, partnerships, corporations and limited liability companies that do not qualify as nonexempt. All partnerships, corporations and limited liability companies must have an identification number issued for federal tax purposes. (3) If a person who qualifies for a license under subsection (2)(b) [non-exempt class] of this section hires one or more employees or falls into any of the categories set out in subsection (2)(a)(B) of this section, the person is subject to penalties under ORS 701.992 for improper licensing. The person must reapply to the board in the correct class. (4) The decision of the board that a person is an independent contractor applies only when the person is performing work of the nature described in ORS 701.026 and 701.060. [1989 c.870 §4; 1995 c.216 §1; 1999 c.402 §13]
Effective 7/01/2008 701.031 Evidence of doing business as contractor. (1) It is prima facie evidence that a person is doing business as a contractor if: (a) The person for that person’s own use performs, employs others to perform, or for compensation and with the intent to sell the structure arranges to have performed, work described in ORS 701.005 (5); and (b) Within any 36-month period the person offers for sale two or more newly built structures on which work described in paragraph (a) of this subsection was performed. (2) Licensure under this chapter is prima facie evidence that the licensee conducts a separate, independent business. [2007 c.114 §3]
Effective 7/1/08 701.038 Residential limited contractors. A residential limited contractor may not: (1) Perform work as a contractor exceeding $40,000 in gross annual volume; or (2) Enter into contracts to perform work as a contractor in excess of $5,000. [2007 c.836 §5] Note: 701.038 becomes operative July 1, 2008. See section 70, chapter 836, Oregon Laws 2007.
Effective 7/1/08 – 6/30/2010 701.042 Licensed developers; residential or commercial developers. A licensed developer or a residential or commercial developer: (1) Shall act only in association with licensed general contractors, one or a combination of whom must have sole responsibility for overseeing all phases of construction activity on a property; and (2) May not perform any construction work on a property. [2007 c.836 §6] Note: 701.042 becomes operative July 1, 2008. See section 70, chapter 836, Oregon Laws 2007. Note: The amendments to 701.042 by section 7, chapter 836, Oregon Laws 2007, become operative July 1, 2010. See section 70, chapter 836, Oregon Laws 2007. The text that is operative on and after July 1, 2010, is set forth for the user’s convenience.
Effective 7/1/08 701.046 License application. (1) An applicant for a construction contractor license must submit the application on a form prescribed by the Construction Contractors Board. The application shall include, but not be limited to, the following information: (a) The endorsement being sought. (b) A list of construction debts involving the applicant, or an owner or officer of the applicant, if the order, award, penalty or judgment that establishes the debt was issued within the preceding five years. (c) For each person described in paragraphs (h) and (i) of this subsection, a Social security number. (d) Workers' compensation insurance account number, if the applicant is required to have workers’ compensation insurance. (e) Unemployment insurance account number, if the applicant is required to have unemployment insurance. (f) State withholding tax account number, if the applicant is required to withhold state income tax. (g) Federal employer identification number, if the applicant is required to have a federal employer identification number. (h) The name and address of: (A) Each partner, if the applicant is a partnership, limited liability partnership or foreign limited liability partnership. (B) The general partner, if the applicant is a limited partnership. (C) Each joint venturer, if the applicant is a joint venture. (D) The owner, if the applicant is a sole proprietorship. (E) The officers, if the applicant is a corporation. (F) The manager and each member, if the applicant is a manager-managed limited liability company. (G) Each member, if the applicant is a membermanaged limited liability company. (H) The responsible managing individual designated by the applicant. (I) Each trustee, if the applicant is a trust. (i) The name and address of the following if the applicant is a partnership, limited liability partnership, foreign limited liability partnership, joint venture,
membermanaged limited liability company: (A) Each partner in a partnership, limited liability partnership or foreign limited liability partnership that is a partner, joint venturer or member of the applicant. (B) Each general partner in a limited partnership that is a partner, joint venturer or member of the applicant. (C) Each joint venturer in a joint venture that is a partner, joint venturer or member of the applicant. (D) The manager and each member of a managermanaged limited liability company that is a partner, joint venturer or member of the applicant. (E) Each member of a member-managed limited liability company that is a partner, joint venturer or member of the applicant. (F) Each officer of a corporation that is a partner,
joint venturer or member of the applicant. (G) The general partner in a limited partnership that is a partner, joint venturer or member of the applicant. (H) Each individual who has a controlling ownership interest in, or management authority over, the applicant and who meets criteria adopted by the board by rule. (j) For each person described in paragraphs (h) and (i) of this subsection, information as required by board rule regarding the following if related to construction activities: (A) A final judgment against the person by a court in any state entered within five years preceding the application date that requires the person to pay money to another person or to a public body if the judgment remains unsatisfied on the application date. (B) A final order against the person by an administrative agency in any state issued within five years preceding the application date that requires the person to pay money to another person or to a public body if the order remains unsatisfied on the application date. (C) A court action against the person in any state pending on the application date that alleges the person owes money to another person or to a public body. (D) An action by an administrative agency in any state pending on the application date that seeks an order that the person pay money to another person or to a public body. (E) A conviction for a crime listed in ORS 701.098(1)(i) entered within five years preceding the application date. (F) An indictment for a crime listed in ORS 701.098(1)(i) filed within five years preceding the application date. (k) The basis on which the applicant meets the standards for independent contractor status under ORS 670.600.
- The application described in subsection (1) of
- this section must be accompanied by proof satisfactory
Effective 1/1/08 to 6/30/08 Note: The amendments to 701.060 by section 17, chapter 836, Oregon Laws 2007, become operative July 1, 2008, and apply to licenses 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 9, chapter 114, Oregon Laws 2007, is set forth for the user’s convenience.
701.060. (1) Any contractor licensed under this chapter may at any time apply for a license in another category. The Construction Contractors Board may charge a transfer fee not to exceed $20 for each additional license.
(2) If a contractor applies for a license pursuant to subsection (1) of this section, all construction, alteration, improvement, moving over public highways, roads or streets, demolition or repair performed by that contractor on buildings of all types shall be subject to the provisions of this chapter and to regulation by the board. Licensure under subsection (1) of this section shall be exclusive as provided in ORS 701.325(6).
Effective 7/1/08 701.068 Bonding requirements; action against surety; rules. (1) An applicant for issuance or renewal of a contractor license shall file with the Construction Contractors Board a surety bond with one or more corporate sureties authorized to do business in this state in the amount set forth in ORS 701.081 or 701.084. (2) If an applicant for issuance, renewal or an additional endorsement of a license will hold endorsements as both a residential contractor and a commercial contractor, the applicant shall file with the board a surety bond for each endorsement in the amount set forth in ORS 701.081 or 701.084. (3) The surety bond must provide that the applicant, with regard to work subject to this chapter, will pay amounts ordered paid by the board under ORS 701.145 or 701.146. Bonds filed under this section shall remain in effect for at least one year or until depleted by payments under ORS 701.150, 701.153 and 701.157, unless the surety sooner cancels the bond. At the discretion of the surety the bond may be continued for an additional period by continuation certificate. Except as provided in subsection (4) of this section, the aggregate liability of the surety under the bond for complaints against the contractor may not exceed the penal sum of the bond no matter how many years the bond is in force. Except as provided in subsection (4) of this section, an extension by continuation certificate, reinstatement, reissue or renewal of the bond may not increase the liability of the surety. (4) The board, by rule, may require a licensee to obtain a new surety bond if, pursuant to a board order for payment of a complaint described in ORS 701.140, the surety pays an amount out of the bond of the licensee. The new surety bond must be in the applicable amount set forth in ORS 701.081 or 701.084, unless a higher amount is required by a board condition or rule described in subsection (5) or (6) of this section. The board may allow a licensee to obtain, instead of a new bond, a certification that the surety remains liable for the full penal sum of the bond, notwithstanding payment by the surety on the complaint. (5) If the amount the licensee must pay against the bond under subsection (3) of this section exceeds the amount of the bond, the board shall suspend the contractor’s license until the amount owed is paid. The board, as a condition of ending the suspension, may require a contractor requesting reinstatement of a license to file a bond of an amount up to five times as much as the amount required ordinarily of a licensee under ORS 701.081 or 701.084. (6) The board by rule may establish conditions for applicants or persons licensed under this chapter under which the applicant or licensee must file a bond of an amount up to five times as much as the amount required ordinarily of an applicant or licensee under ORS 701.081 or 701.084. The board may reduce the amount of bond it would otherwise require if the contractor demonstrates satisfactory completion of approved elective classes on dispute resolution and prevention, basic accounting and record keeping or such other classes as the board may prescribe. (7) The bond required under this section is for the exclusive purpose of payment of final orders and arbitration awards of the board in accordance with this chapter. (8) Upon determination under ORS 701.145 or 701.146 of a complaint against a contractor who holds a bond required under this section, the board shall notify the surety on the bond of the final order in a manner determined by the board by rule. The notification shall include a list of all complaints upon which a final order has been issued. (9) A court action may not be commenced against a surety on a bond required under this section until 30 days after the date that the surety is notified by the board under ORS 701.150 that payment is due on the final order. (10) In any action against a surety on a bond under this section that is based on the failure of the surety to pay a final order, the court may award: (a) Costs; (b) Reasonable attorney fees to the prevailing party as part of the costs; and (c) Twice the amount of any damages that the board ordered the surety to pay on the complaint, if the surety arbitrarily and capriciously refused to pay upon order of the board. [Formerly 701.085]
Effective 7/1/08 701.073 Insurance required of licensed contractors. (1) Except as provided in subsection (2) of this section, a contractor who possesses a license as required under this chapter shall have in effect public liability, personal injury and property damage insurance covering the work of the contractor that is subject to this chapter, including the covering of liability for products and completed operations according to the terms of the policy and subject to applicable policy exclusions, for an amount not less than the applicable amount set forth in 701.081 or 701.084.
(2) The contractor shall provide satisfactory evidence to the Construction Contractors Board at the time of licensure and renewal that the insurance required by subsection (1) of this section has been procured and is in effect. [Formerly 701.105]
701.075 [1971 c.740 §9; 1973 c.832 §56; 1979 c.312 §2; 1981 c.618 §12; 1989 c.624 §2; 1989 c.870 §2; 1989 c.928 §7; 1995 c.216 §6; 1999 c.344 §1; 1999 c.402 §18a; 2001 c. 160 §2; 2001 c.196 §5; 2003 c.675 §73; 2005 c.432 §9; 2007 c.478 §2; 2007 c. 648 §24; 2007 c.836 §58a; renumbered 701.046 in 2007] 701.077 [2005 c.432 §4; 2007 c.648 §25; renumbered 701.094 in 2007] 701.078 [2005 c.432 §3; 2007 c.113 §1; 2007 c.648 §26; 2007 c.836 §21; renumbered 701.091 in 2007] 701.080 [1979 c.312 §5; 1983 c.616 §9; 1989 c.928 §8; 1997 c.301 §1; 1999 c.402 §20; renumbered 701.117 in 2007]
Effective 7/1/08 701.081 Residential contractors; bond; insurance; responsible managing individual. (1) A residential general contractor shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $20,000; (b) Obtain general liability insurance under ORS 701.073 in an amount of not less than $500,000; and (c) Have a responsible managing individual who meets the requirements of ORS 701.091 .
(2) A residential specialty contractor shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $15,000; (b) Obtain general liability insurance under ORS 701.073 in an amount not less than $300,000; and (c) Have a responsible managing individual who meets the requirements of ORS 701.091. (3) A residential limited contractor shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $10,000; (b) Obtain general liability insurance under ORS 701.073 in an amount not less than $100,000; and (c) Have a responsible managing individual who meets the requirements of ORS 701.091. (4) A residential developer shall: (a) Obtain a surety bond under ORS 701.068 in the amount of $20,000; and (b) Obtain general liability insurance under ORS 701.073 in an amount not less than $500,000. [2007 c. 836 §3] Note: 701.081 becomes operative July 1, 2008, and applies to licenses issued or renewed on or after July 1, 2008. See section 70, chapter 836, Oregon Laws 2007.
Effective 7/1/08 701.122 Training requirements for individuals and businesses; testing of business license applicant; exceptions; rules. (1) The Construction Contractors Board, by rule, shall impose training requirements for individuals and businesses seeking to be licensed under this chapter. The training required by the board must relate to business practices and laws affecting construction contractors. The board shall adopt standards for programs that provide training that meets the requirements of this subsection. (2) In establishing training requirements under subsection (1) of this section, the board shall take into consideration the availability of training programs within the state and shall encourage training providers to use the most up-to-date technology. The board shall recognize and grant credit for training provided by private organizations if the training program meets the standards established by the board under subsection (1) of this section. The board periodically shall review the qualifications of private organizations and instructors to determine compliance with the program standards. The board shall develop and make available to the public a list of public and private programs that provide training that meets the training requirements established by the board under subsection (1) of this section. (3) The board, by rule, shall approve a test for applicants for licensing under ORS 701.046. The test shall measure the applicant’s knowledge regarding business practices and laws that are the subject of the training required under subsection (1) of this section. (4) Subsections (1) and (3) of this section do not apply to an applicant for licensing with endorsement solely as a residential or commercial developer. [Formerly 701.072]
CONSTRUCTION CONTRACTS AND NOTICES Effective 1/1/08 701.305 Requirement for written contract, standard contractual terms; rules. (1) A contractor may not perform work subject to this section for an owner of a residential structure or zero-lot-line dwelling without a written contract if the aggregate contract price exceeds $2,000. If the price of a contract was initially less than $2,000, but during the course of performance the contract exceeds that amount, the contractor shall mail or otherwise deliver a written contract to the owner not later than five days after the contractor knows or should reasonably know that the contract price will exceed $2,000. Failure to have a written contract will not void the contract.
(2) The Construction Contractors Board shall adopt rules that require a contractor to use standard contractual terms in a construction contract for which subsection (1) of this section requires a written contract. The standard contractual terms shall be clear, use words of common understanding and shall include but need not be limited to: (a) A statement that the contractor is licensed by the board; (b) The name, license number, address and telephone number of the contractor as shown on board records on the date the contract is entered into; (c) An acknowledgment of a written offer of a warranty, if an offer is required by ORS 701.320, and indication of the acceptance or rejection of the offered warranty; (d) For a residential structure contract, a summary of the notices required under ORS 87.093 or under rules adopted under ORS 701.330 and 701.335 (2), on the contractor’s bid proposal; (e) Acknowledgment of the receipt of the maintenance information required by the board under ORS 701.335; and (f) An explanation of the property owner’s rights under the contract, including, but not limited to, the ability to file a claim with the board and the existence of any mediation or arbitration provision in the contract, set forth in a conspicuous manner as defined by the board by rule. [2007 c.648 §7]
Effective 1/1/08 701.310 Cancellation of contract. (1) A property owner who enters into an initial written contract for the construction, improvement or repair of a residential structure or zero-lot-line dwelling may cancel the contract by delivery of a written notice of cancellation anytime prior to 12 midnight at the end of the next business day. The notice of cancellation may be delivered in any written form or by any means that can readily be converted to written form, including, but not limited to, facsimile, electronic mail and regular mail. The notice must state the intention of the property owner to cancel the contract. (2) Subsection (1) of this section does not allow a property owner to cancel a contract: (a) If both parties agree that work is to begin before the cancellation period has expired; (b) After a contractor substantially begins the residential construction, improvement or repair; or (c) When an initial contract is being modified after expiration of the initial cancellation period. [2007 c.648 §8]
Offer of warranty; withdrawal of contract offer. (1) A licensee that enters into a contract to construct a new residential structure or zero-lot-line dwelling shall make a written offer to the first purchaser or owner of the structure or dwelling of a warranty against defects in materials and workmanship for the structure or dwelling. The first purchaser or owner of the structure or dwelling may accept or refuse the offer of a warranty by the contractor. If a contractor makes the written offer of a warranty before the contractor and owner both sign a written construction contract and the owner refuses the offered warranty, the contractor may withdraw the offer to construct the structure or dwelling. (2) Subsection (1) of this section does not apply to a residential structure that is a manufactured dwelling as defined in ORS 446.003. [2007 c.648 §11] Note: 701.320 applies to new residential structures and zerolot- line dwellings for which the contractor enters into a written construction contract on or after July 1, 2008. See section 30, chapter 648, Oregon Laws 2007
Effective 1/1/08 701.330 Consumer notice form; notice of procedure form; rules. (1) The Construction Contractors Board shall adopt by rule a consumer notice form designed to inform a property owner of the actions the property owner should take to protect the owner in a residential repair, remodel or construction project. The form shall briefly describe and identify additional sources of information regarding: (a) Contractor licensing standards; (b) Contractor bond and insurance requirements; (c) The requirement to offer a warranty under ORS 701.320; and (d) Other information specified by the board. (2) The board shall adopt by rule a notice of procedure form that briefly describes and identifies additional sources of information regarding the procedure described under ORS 701.560 to 701.595 and other information specified by the board. (3) The consumer notice form and notice of procedure form adopted by the board shall include signature lines for the contractor and the property owner. (4) The board shall adopt rules specifying the time and manner for a contractor to deliver a consumer notice form and notice of procedure form to a property owner. (5) The board may adopt rules that require a contractor to maintain evidence of delivery of the consumer notice form and notice of procedure form and that specify the retention period for and the form of that evidence. [2007 c.648 §14]
Effective 7/1/08 701.348 Sewer contractor requirements. (1) Every person offering to undertake or undertaking construction of building sewer piping shall comply with the requirements of ORS chapter 701. (2) Every person submitting a bid or a written estimate of the costs to construct building sewer piping shall provide to potential customers, prior to an agreement to perform, the following: (a) The person's Construction Contractors Board license number; (b) The applicable bonding and liability coverage; and (c) The statement described in ORS 701.325 (1). (3) Any person licensed under ORS 701.026 may install a building sewer after obtaining a permit for plumbing inspection under ORS 447.095. (4) As used in this section, “building sewer” means that part of the system of drainage piping that conveys sewage into a septic tank, cesspool or other treatment unit that begins five feet outside the building or structure within which the sewage originates. [Formerly 701.138] [2007 c.648 §13]
Effective 7/1/08 701.605 Recording of written warranty agreement. (1) To facilitate the handling of warranty work or remediation of defects to a new commercial or residential structure or zero-lot-line dwelling, a contractor who builds the structure may present for recording in the deed records of the county in which the new structure is built a written warranty agreement that: (a) Is signed by the contractor and the original owner of the new structure; (b) Sets forth any express warranties furnished by the contractor; and (c) Contains the names of the contractor and the original property owner, the title of the document, a legal description of the property and acknowledgement of the signatures of the parties in the same manner as the parties to a deed are acknowledged. (2) The warranties set forth in the recorded warranty agreement: (a) Benefit and burden subsequent owners of the structure. (b) Cease to affect title to the property 10 years after the date the instrument is recorded. [2005 c.169 § 2; 2007 c.648 §29] Note: See note under 701.560.
CONSTRUCTION CONTACT PAYMENTS Unchanged 701.620 Definitions for ORS 701.620 to 701.640. As used in ORS 701.620 o 701.640: (1) “Construction contract” means a written or oral construction agreement, including all plans, specifications and addenda relating to: (a) Excavating, landscaping, demolishing and detaching existing structures, leveling, filling in and other preparation of land for the making and placement of a building, structure or superstructure; (b) Creation or making of a building, structure or superstructure; and (c) Alteration, partial construction and repairs done in and upon a building, structure or superstructure. (2) “Contractor” has the meaning given that term in ORS 87.005. (3) “Days” means calendar days. (4) “Material supplier” means any person providing materials or products under a construction contract by any contractual means including oral authorization, written contract, purchase order, price agreement or rental agreement. (5) “Original contractor” has the meaning given that term in ORS 87.005. (6) “Owner” has the meaning given that term in ORS 701.410. (7) “Subcontractor” has the meaning given that term in ORS 87.005. [2003 c.675 §54] Note: 701.620 to 701.645 were enacted into law by the
Legislative Assembly but were not added to or made a part of ORS chapter 701 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation. 701.625 Progress payments; alternative billing cycle; certification of billing or estimate; payment in full; prohibited agreements. (1) By mutual agreement with an original contractor, an owner may make progress payments to the original contractor on a construction contract that is anticipated to last less than 60 days. An owner shall make progress payments to the original contractor on all other construction contracts. Progress payments shall be made on the basis of a certified billing or estimate for the work performed and the materials or products supplied during the preceding 30-day billing cycle, or an alternate billing cycle as stated in the construction contract. If billings or estimates are to be submitted in alternate, rather than 30-day billing cycles, the construction contract shall specify the alternate billing cycles in a clear and conspicuous manner as prescribed in subsection (2) of this section. Except as provided in subsection (3) of this section, the owner shall make progress payments to the original contractor within 14 days after the date the billing is submitted pursuant to subsection (4) of this section.` (2) A construction contract may provide for an alternate billing cycle if the plans and specifications specifically set forth that there is an alternate billing` following statement: Notice of Alternate Billing Cycle The contract will allow the owner to require the submission of billings or estimates in billing cycles other than 30-day cycles. Billings or estimates for the contract shall be submitted as follows: _______________________________________ _______________________________________ _______________________________________ (3) An owner may make progress payments later than 14 days after the date the billing or estimate is submitted if: (a) The owner is responsible for providing plans and specifications that expressly allow in a clear and conspicuous manner an extended payment, defined by a specified number of days after the billing or estimate is submitted; and (b) The owner provides for each page of plans and specifications a statement substantially similar to the following statement:
Notice of Extended Payment Provision
The contract will allow the owner to make payment within _____ days after the date a billing or estimate is submitted.
(4) The owner is deemed to have received the billing or estimate when the billing or estimate is submitted to any person designated by the owner for the receipt, review or approval of the billing or estimate. A billing or estimate is deemed to be certified 10 days after the owner receives the billing or estimate, unless before that time the owner or the owner’s agent prepares and issues a written statement detailing those items in the billing or estimate that are not approved. An owner may decline to approve a billing or estimate or portion of a billing or estimate for:
(a) Unsatisfactory work progress; (b) Defective construction work, materials or products not remedied; (c) Disputed work, materials or products, not to exceed 150 percent of the amount in dispute; (d) Failure to comply with other material provisions of the construction contract; (e) Third party claims filed or reasonable evidence that such a claim will be filed; (f) Failure of the original contractor or a subcontractor to make timely payments to subcontractors and material suppliers for labor, equipment, materials and products; (g) Damage to the owner; (h) Reasonable evidence that the construction contract cannot be completed for the unpaid balance of the construction contract sum; or (i) Other items as allowed under the contract terms and conditions.
(5) An owner may withhold from a progress payment an amount that is sufficient to pay the direct expenses the owner reasonably expects to incur to correct any items set forth in writing pursuant to subsection (4) of this section. The owner may also withhold a reasonable amount as retainage as defined in ORS 701.410.
(6) An owner may extend the period within which the billing or estimate may be certified if: (a) The owner is responsible for providing plans and specifications that expressly allow in a clear and conspicuous manner an extended period within which a billing or estimate may be certified; and (b) The owner provides for each page of plans and specifications, including bid plans and construction plans, a statement substantially similar to the following statement:
Notice of Extended Certification Period Provision
The contract will allow the owner to certify billings and estimates within _____ days after the billings and estimates are received from the original contractor.
(7) After a subcontractor or material supplier submits a bid or proposal or other written pricing information to an original contractor, an owner and the original contractor may change the specified number of days after certification during which the owner may make payment to the original contractor or within which the owner must certify a billing or estimate. Any original contractor, subcontractor or material supplier that does not provide written consent to the change will continue to be paid as indicated in the plans and specifications.
(8) When an original contractor completes and an owner approves all work under a construction contract, the owner shall make payment in full of all remaining amounts due on the construction contract within seven days. When an original contractor completes and an owner approves all work under a portion of a construction contract for which the contract states a separate price, the owner shall make payment in full of all remaining amounts due on that portion of the construction contract, subject to the satisfaction of any issue described in subsection (4) of this section or ORS 701.630 (4).
(9) Payment is not required under this section unless the original contractor provides the owner with a billing or estimate for the work performed or the materials or products supplied in accordance with the terms of the construction contract between the parties. (10) A construction contract may not alter the right of any original contractor, subcontractor or material supplier to receive prompt and timely progress payments as provided under this section. (11) If an owner or a person designated by the owner as responsible for making progress payments on a construction contract does not make a timely payment under this section, the owner shall pay the original contractor interest on the unpaid balance at the rate of one and one-half percent a month or fraction of a month, or at a higher rate as the parties to the construction contract may agree. (12) On the written request of a subcontractor, the owner shall notify the subcontractor within five days after the issuance of a progress payment to the original contractor. On the written request of a subcontractor, the owner shall notify the subcontractor within five days after the owner makes the final payment to the original contractor on the construction contract. (13) In any action, claim or arbitration brought to collect payments or interest pursuant to this section, the prevailing party shall be awarded reasonable costs and attorney fees. (14) If the owner and original contractor are a single entity, that entity shall pay subcontractors and material suppliers within 14 days after the billing or estimate is received unless the deadlines for certification or payment have been modified pursuant to subsection (3) or (6) of this section. [2003 c.675 §55] Note: See notes under 701.620
701.630 Payments to subcontractors and material suppliers; failure to pay; omission of payments; board discipline.
(1) Performance by an original contractor, subcontractor or material supplier in accordance with the provisions of a construction contract entitles the original contractor, subcontractor or material supplier to payment from the party with whom the original contractor, subcontractor or material supplier contracts. (2) If a subcontractor or material supplier has performed in accordance with the provisions of a construction contract, the original contractor shall pay to the subcontractor or material supplier, and each subcontractor shall pay to its subcontractors or material suppliers, the full amount received for such subcontractor’s work and for materials and products supplied based on the subcontract or purchase order terms and conditions within seven days of receipt by the original contractor or subcontractor of a progress payment or final payment. Payment is not required under this subsection unless a subcontractor or material supplier provides to the original contractor or subcontractor a billing or invoice for the work performed or materials or products supplied in compliance with the terms of the contract between the parties. Each subcontractor or material supplier must provide an appropriate waiver of any mechanic’s or materialman’s lien in accordance with subcontract or purchase order terms and conditions. The original contractor or subcontractor may require that such waivers of lien be notarized. (3) Any failure to reasonably account for the application or use of payments, as proven in a legal proceeding authorized under the terms of the construction contract, may constitute grounds for disciplinary action by the Construction Contractors Board under ORS 701.098. (4) Nothing in this section prevents an original contractor when submitting a bill or estimate to an owner, or a subcontractor when submitting a bill or estimate to the original contractor, from omitting from the bill estimate amounts withheld from payment to a subcontractor or material supplier for: (a) Unsatisfactory work progress; (b) Defective construction work, materials or products not remedied; (c) Disputed work, materials or products, not to exceed 150 percent of the amount in dispute; (d) Failure to comply with other material provisions of the construction contract; (e) Third party claims filed or reasonable evidence that such a claim will be filed; (f) Failure of the subcontractor to make timely payments to subcontractors and material suppliers for labor, equipment, materials and products; (g) Damage to an original contractor, subcontractor or material supplier; (h) Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract sum; (i) A reasonable amount for retainage, as defined in ORS 701.410, that does not exceed the actual percentage allowed by the subcontract or purchase order; or (j) Other items as allowed under the subcontract or purchase order terms and conditions. (5) If a progress or final payment to a subcontractor or material supplier is delayed by more than seven days after receipt of a progress or final payment by an original contractor or subcontractor, the original contractor or subcontractor shall pay its subcontractor or material supplier interest beginning on the eighth day, except during periods of time during which payment is withheld pursuant to subsection (4) of this section, at the rate of one and one-half percent a month or a fraction of a month on the unpaid balance or at such higher rate as the parties agree. (6) In any action, claim or arbitration brought to collect payments or interest under this section, the prevailing party shall be awarded reasonable costs and attorney fees. [2003 c.675 §56] Note: See notes under 701.620.
UNIFORM ARBITRATION ACT 36.600. Definitions. As used in ors 36.600 to 36.740:
36.610. Effect of agreement to arbitrate; nonwaivable provisions. (1) Except as otherwise provided in this section, a party to an agreement to arbitrate or to an arbitration proceeding may waive, or the parties may vary the effect of, the requirements of ORS 36.600 to 36.740 to the extent permitted by law. (2) Before a controversy arises that is subject to an agreement to arbitrate, a party to the agreement may not: (a) Waive or agree to vary the effect of the requirements of this section or ORS 36.615 (1), 36.620 (1), 36.630, 36.675 (1) or (2), 36.720 or 36.730; (b) Agree to unreasonably restrict the right under ORS 36.635 to notice of the initiation of an arbitration proceeding; (c) Agree to unreasonably restrict the right under ORS 36.650 to disclosure of any facts by a neutral arbitrator; or (d) Waive the right under ORS 36.670 of a party to an agreement to arbitrate to be represented by a lawyer at any proceeding or hearing under ORS 36.600 to 36.740, but an employer and a labor organization may waive the right to representation by a lawyer in a labor arbitration. (3) A party to an agreement to arbitrate or arbitration proceeding may not waive, or the parties may not vary the effect of, the requirements of this section or ORS 36.625, 36.660, 36.680, 36.690 (4) or (5), 36.700, 36.705, 36.710, 36.715 (1) or (2), 36.735, 36.740 or section 3 (1) or (3) or 31, chapter 598, Oregon Laws 2003. (4) Subsections (2) and (3) of this section do not apply to agreements to arbitrate entered into by two or more insurers, as defined by ORS 731.106, or selfinsured persons for the purpose of arbitration of disputes arising out of the provision of insurance. [2003 c. 598 §4] Note: See note s under 36.600.
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