What does Oregon's construction prompt-payment statute say about lien waivers from subcontractors and suppliers?
An original contractor, subcontractor or material supplier that performs in accordance with a construction contract is entitled to payment from the party with whom it contracts (ORS 701.630(1)), and the seven-day pass-through duty in 701.630(2)(a) runs to a subcontractor, to a material supplier and from an original subcontractor down to the next tier. ORS 701.630(2)(b) provides that payment under subsection (2) is not required unless a subcontractor or material supplier provides a billing or invoice for the work performed or materials or products supplied in compliance with the terms of its contract, that each subcontractor or material supplier must provide an appropriate waiver of any lien for labor, equipment, services, materials or products in accordance with subcontract or purchase order terms and conditions, and that the original contractor or subcontractor may require that such lien waivers be notarized. ORS 701.620 to 701.640 do not apply to buildings subject to the Low-Rise Residential Dwelling Code, public contracts, or housing in which all or part of the dwelling units are reserved for rental to persons with income at or below 80 percent of area median household income (701.645).
The trap
What the lien waiver must cover is set by the subcontract or purchase order terms, not by a statutory form: Oregon's private prompt-payment sections prescribe no form of construction lien waiver, and nothing in them says whether a waiver given for a progress payment releases amounts not yet paid. No Oregon appellate decision construing ORS 701.620 to 701.645 was found, so what an 'appropriate' waiver must contain has no judicial gloss in this state. The waiver obligation is also a condition on the seven-day payment duty, not a free-standing one: 701.630(2)(b) makes payment 'not required under this subsection' unless the billing complies with the contract and the appropriate waiver is provided.
4 authorities
- statuteORS 701.630enactment date not established
The words that state the rule
An original contractor, subcontractor or material supplier that performs in accordance with a construction contract is entitled to payment from the party with whom the original contractor, subcontractor or material supplier contracts.
- statuteORS 701.630enactment date not established
The words that state the rule
If a subcontractor has performed in accordance with a construction contract, and the original contractor receives payment from the owner for work performed by the subcontractor, the original contractor shall pay the subcontractor for that work no later than seven days after the original contractor receives the payment. If a material supplier has performed in accordance with a construction contract, and the original contractor receives payment from the owner for materials or products provided by the material supplier, the original contractor shall pay the material supplier for those materials and products no later than seven days after the original contractor receives the payment. An original subcontractor that receives payment under this subsection for work provided to the original subcontractor by another subcontractor, or for materials or products provided to the original subcontractor, shall pay the other subcontractor or material supplier for the work, materials or products no later than seven days after the original subcontractor receives the payment.
- statuteORS 701.630enactment date not established
The words that state the rule
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 lien for labor, equipment, services, materials or products in accordance with subcontract or purchase order terms and conditions. The original contractor or subcontractor may require that such waivers of lien be notarized.
- statuteORS 701.645enactment date not established
The words that state the rule
ORS 701.620 to 701.640 do not apply to: (1) A contract for the construction, alteration, repair, maintenance, moving or demolition of a building that is subject to the Low-Rise Residential Dwelling Code; (2) A public contract under ORS 279.835 to 279.855 or ORS chapter 279A, 279B or 279C; or (3) Housing in which all or part of the dwelling units are reserved for rental to persons having an income equal to or less than 80 percent of the median household income for the area as determined by the Housing and Community Services Department.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.