Construction Contractors and Contracts

ORS 701.131
License required to perfect lien or obtain judicial or administrative remedy

  • exception


(1)

Except as provided in subsection (2) of this section, a contractor may not perfect a construction lien, file a complaint with the Construction Contractors Board or commence an arbitration or a claim in a court of this state for compensation for the performance of any work or for the breach of any contract for work that is subject to this chapter, unless the contractor had a valid license issued by the board and properly endorsed for the work performed:

(a)

At the time the contractor bid or entered into the contract for performance of the work; and

(b)

Continuously while performing the work for which compensation is sought.

(2)

The board, arbitrator or court may not apply the provisions of subsection (1) of this section to a contractor if the board, arbitrator or court determines that:

(a)

The contractor either did not have a valid license with a proper endorsement at any time required under subsection (1) of this section, or had an initial issuance of a valid license, and:

(A)

The contractor was not aware of the requirement that the contractor be licensed or properly endorsed for the work performed, and the contractor submitted a completed application for a license within a number of days established by the board, but not more than 90 days, of the date the contractor became aware of the requirement;

(B)

At the time the contractor perfected a construction lien or commenced any claim subject to the provisions of subsection (1) of this section, the contractor was licensed by the board and properly endorsed for the work performed; and

(C)

Enforcement of the provisions of subsection (1) of this section would result in substantial injustice to the contractor;

(b)

The contractor was licensed by the board for some but not all of the times required under subsection (1) of this section and had a lapse in the license and:

(A)

The contractor was not aware of the lapse in the license for more than a number of days established by the board, but not to exceed 90 days, before submitting a completed application for license renewal with the board;

(B)

Except for perfection of a construction lien and a court action to foreclose the lien, at the time the contractor commenced any claim subject to the provisions of subsection (1) of this section the contractor’s license was renewed under ORS 701.063 (Term of license) to include the entire time period for which a license was required under subsection (1) of this section; and

(C)

For perfection of a construction lien and a court action to foreclose the lien, the contractor’s license was renewed under ORS 701.063 (Term of license) for the entire time period for which a license was required under subsection (1) of this section, but not later than 90 days following perfection of the lien; or

(c)

The proceeding:

(A)

Is directed against a person or entity that:

(i)

Is subject to this chapter or ORS chapter 671 or 672;

(ii)

Provides construction or design labor or services of any kind; or
(iii) Manufactures, distributes, rents or otherwise provides materials, supplies, equipment, systems or products; and

(B)

Arises out of defects, deficiencies or inadequate performance in the construction, design, labor, services, materials, supplies, equipment, systems or products provided.

(3)

A contractor that falsely swears to information submitted to the board under ORS 701.046 (License application) or submitted in a registration of securities described in ORS 701.046 (License application) (2), or that knowingly violates the provisions of ORS 656.029 (Obligation of person awarding contract to provide coverage for workers under contract), 670.600 (Independent contractor defined) or 701.046 (License application), may not perfect a construction lien, file a complaint with the board or commence an arbitration or a claim in a court of this state for compensation for the performance of any work on a residential structure or for the breach of any contract for work on a residential structure that is subject to this chapter. [Formerly 701.065; 2009 c.226 §§8,9; 2013 c.251 §5]

(formerly 701.065)

Notes of Decisions

Since this section uses word "maintain" in reference to action for compensation, it applied to bar action by unregistered builder who entered into building contract, performed work and filed his complaint prior to date this section became effective. Kolodejchuk v. Lucier, 52 Or App 981, 630 P2d 889 (1981)

A trust deed used as a purchase-money mortgage was not a contract subject to registration requirements of this section and action by plaintiffs to foreclose trust deed on home originally constructed by them with intent that it be their residence was not thereby barred. Wills v. Harris, 57 Or App 712, 646 P2d 39 (1982), Sup Ct review denied

Plaintiff, who was not registered with Builder's Board is not barred from bringing action for breach of franchise agreement because that is not type of contract action legislature intended to bar by language of this section. MacLean & Associates v. American Guaranty Life, 85 Or App 284, 736 P2d 586 (1987), Sup Ct review denied

Failure of plaintiff to meet contractor registration requirement is not jurisdictional defect. Beckwith v. Frazey, 86 Or App 236, 738 P2d 1003 (1987), Sup Ct review denied; Mount Hood Community College v. Federal Insurance Co., 199 Or App 146, 111 P3d 752 (2005)

Registration in incorrect contracting specialty subcategory created by board rule does not disqualify contractor from maintaining suit. Edwards v. Perry, 130 Or App 165, 880 P2d 507 (1994)

For purposes of continuous registration requirement, "the work" refers to services performed by contractor during entire project, not just services performed during nonregistration period. Parthenon Construction and Design, Inc. v. Neuman, 166 Or App 172, 999 P2d 1169 (2000)

Continuous registration requirement does not incorporate principle of substantial compliance. Parthenon Construction and Design, Inc. v. Neuman, 166 Or App 172, 999 P2d 1169 (2000)

Where contractor relies on agency representation that license is unnecessary, denying remedy based on lack of license constitutes "substantial injustice." Splinters, Inc. v. Andersen/Weitz, 192 Or App 632, 87 P3d 689 (2004), Sup Ct review denied

Section applies to construction-defect proceedings and, consequently, to claims involving services whose inadequacy contributed to defects subject to those proceedings. Pincetich v. Nolan, 252 Or App 42, 285 P3d 759 (2012)

Chapter 701

Notes of Decisions

This is a remedial statute made for the protection of the building business and of people dealing with builders who might be irresponsible; it should be read as a whole and liberally construed to accomplish its purpose. Robinson v. Builders Bd., 20 Or App 340, 531 P2d 752 (1975)

Atty. Gen. Opinions

Lack of authority for director to appoint executive secretary for board, (1971) Vol 35, p 930; inapplicability of this chapter to business of construction or installation of fences, sidewalks, septic tanks, wells and underground sprinkling systems, (1972) Vol 35, p 1278; mobile home as personal or real property under this chapter, (1972) Vol 36, p 41; application of Homebuilders Law to mobile homes, (1978) Vol 38, p 693


Source

Last accessed
Jun. 26, 2021