Who must have a bond?
Contractors in Oregon must have a surety bond. The amount of this bond varies between $10,000.00 and $75,000.00.
Who can file a claim against a contractor’s bond?
Anyone who has a claim against a contractor for negligent or defective work or for breach of contract may file a claim against a contractor’s bond. ORS 701.140(1) & (3). You must have a contractual relationship (i.e., either an oral or written contract) with the contractor. OAR 812-004-0320(5).
Do I need to send notice before filing a claim?
Yes. If you wish to file a complaint with the Construction Contractors Board (CCB) you must send notice to the contractor via certified mail at least thirty days before filing a complaint. ORS 701.133(1). If the contractor is already aware of your claim, the CCB may waive this notice requirement.ORS 701.133(1); OAR 812-004-0340(9-10).
Note, that this does include the Notice of Defect required by ORS 701.560-595; 605.
What must I include in the claim?
You must use the CCB’s claim form. OAR 812-004-340(1). You can only claim damages for the time the contractor was licensed with the CCB. OAR 812-004-320(3).
When must I bring my claim?
If you are a homeowner, you must typically bring your claim within one year. ORS 701.143.
What happens after I file my claim?
If the contractor has a residential endorsement and the structure involved is residential or small commercial, then you must use the administrative process under ORS 701.145.
If the contractor has a commercial endorsement and the structure involved is small commercial or large commercial you must use the judicial process under ORS 701.146.
If the contractor has a residential endorsement and the structure involved is large commercial, or the contractor has a commercial endorsement and the structure involved is residential, the CCB does not have jurisdiction.
What is the administrative process?
If no lawsuit has been filed and there is no arbitration clause in your contract the following will occur: after you file your complaint, you will need to pay the filing fee. Then the CCB will conduct an on-site inspection. If the contractor has been found to be liable, the CCB will recommend a resolution. If this is accepted the matter is resolved. If not, the CCB will schedule an administrative hearing. After the hearing, the hearings officer will issue a ruling.
If there is an arbitration clause in the parties contract the parties can either agree to waive it and proceed as outlined above or they can arbitrate the dispute. The CCB may also mandate that the parties arbitrate the dispute, even without an arbitration clause if the claim is residential or small commercial. ORS 701.148. The CCB can also determine that the case is to complete for the CCB’s dispute resolution proceedings and refer the parties to litigation. ORS 701.145(2)(b).
If a party has already filed a lawsuit then the CCB may suspend its proceedings until the lawsuit is resolved. ORS 701.145(2); OAR 812-004-0520.
What is the judicial process?
If the complaint is complex or involving a commercial structure, you will have to obtain a judgment in court before the CCB will issue an order. ORS 701.146. You must give the CCB and surety notice of the lawsuit by certified mail, return receipt requested. You must deliver a certified copy of the judgment, if one is obtained, within thirty dates after entry to the CCB and surety.
What do I need to do if I receive a final order?
If you receive a final order, the surety is obligated to pay you the award up to the amount of the bond.
Legal Disclaimer: The information on this page does not constitute legal advice and should not be relied upon as each situation is fact specific and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. The information on this page is solely for the purpose of legal education and is intended to only provide general information about the matters stated therein. The information on this page should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area of the matters stated therein. No attorney-client relationship is formed without an actual agreement confirmed in writing. I am licensed only in Washington and Oregon.