§ 16.10 Posting a Bond or Cash Deposit to Remove the Lien

LibraryConstruction Law in Oregon (OSBar) (2019 Ed.)
§ 16.10 POSTING A BOND OR CASH DEPOSIT TO REMOVE THE LIEN

§ 16.10-1 In General

A perfected construction lien may be removed from the land or an improvement by the owner's or other interested person's posting a valid bond or cash deposit at any time after the claim of lien is filed. ORS 87.076(1), (3).

If a bond is posted, the bond must be filed with the recorder of the county where the claim of lien is filed and must be

executed by a corporation authorized to issue surety bonds in the State of Oregon to the effect that the principal or principals on the bond shall pay the amount of the claim and all costs and attorney fees that are awarded against the improvement or land on account of the lien.

ORS 87.076(1).

In lieu of a bond, the owner of the improvement or property or other interested party may make a cash deposit with the treasurer of the county where the claim of lien is filed. ORS 87.076(2)(a).

The bond or cash deposit must be in an amount not less than 150 percent of the amount of the lien claimed, or $1,000, whichever is greater. ORS 87.076(1), (2)(a).

PRACTICE TIP: The terms of any bond should be reviewed to see whether it contains the required statutory language of ORS 87.076, or is merely a bond to pay a personal monetary judgment awarded against the owner.

NOTE: A cash depositor no longer needs a court order to receive investment income from a cash deposit. See ORS 87.076(2)(b), as amended by Or Laws 2009, ch 513, § 1. Rather, the county treasurer must pay the investment income to the depositor when the treasurer otherwise distributes the money from the deposit. However, the depositor bears the risk of a loss resulting from an investment of the money deposited. ORS 87.076(2)(b).

Simply filing the bond or making a cash deposit does not release the lien from the property. The person who files the bond or makes a cash deposit must give notice of the filing or deposit to the lien claimant "not later than 20 days after the filing or deposit." ORS 87.078(1). Otherwise, filing the bond or making the cash deposit has no effect. ORS 87.078(2). An affidavit of compliance with ORS 87.076 must also be filed with the county's recording officer. ORS 87.081. See Form 16-5 for a form of affidavit.

When an appropriate bond or cash deposit has been filed or posted and the required notice has been given, the property is free of the lien and the lien attaches to the bond or deposit. ORS 87.083(1); A-C Constr., Inc. v. Bakke Corp., 153 Or App 41, 51, 956 P2d 219, rev den, 327 Or 553 (1998) ("the lien transferred...

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