ORS 701.625
Progress payments

  • notice requirements
  • nonapproval of billing or estimate
  • withholding
  • final payment

(1)

If a construction contract is for construction work that is expected to take 60 or more days to complete, an owner shall make progress payments to the original contractor. By mutual agreement with an original contractor, an owner may make progress payments to the original contractor under a construction contract for which the construction work is expected to take less than 60 days to complete.

(2)

The owner shall make progress payments on the basis of a certified billing or estimate for work performed, and for materials or products supplied, during the preceding monthly billing cycle or during an alternative billing cycle identified in the construction contract. If a construction contract identifies an alternative billing cycle, the construction contract must expressly state in a clear and conspicuous manner that there is an alternative billing cycle and the owner must provide on each page of drawings and specifications in the construction contract a statement substantially similar to the following:

Notice of Alternative Billing Cycle
The construction contract will allow the owner to require the submission of billings or estimates in billing cycles other than monthly cycles. Billings or estimates for the construction contract shall be submitted as follows:




(3)

Intentionally left blank —Ed.

(a)

Except as provided in this subsection, the owner shall:

(A)

Make progress payments no later than 14 days after the date the billing is received; and

(B)

Make final payment of all remaining amounts no later than seven days after the date that the owner approves the work.

(b)

An owner may make progress payments or final payment later than the time allowed under paragraph (a) of this subsection if:

(A)

The owner provides drawings and specifications that expressly state in a clear and conspicuous manner that an extended payment period is allowed and identify the extended payment period as a specific number of days after the date that the billing or estimate is received or the date that the owner approves all work; and

(B)

The owner provides on each page of drawings and specifications a statement substantially similar to the following:

Notice of Extended Payment Provision
The construction contract will allow the owner to make:

(1)

Progress payments no later than _____ days after the date a billing or estimate is received.

(2)

Final payment of all remaining amounts no later than _____ days after the date the owner approves all work.

(4)

Payment is not required under this section unless the owner receives from the original contractor a billing or estimate for the work performed or the materials or products supplied in accordance with the terms of the construction contract.

(5)

The owner is deemed to have received the billing or estimate when the billing or estimate is received by 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 because of:

(a)

Unsatisfactory work progress;

(b)

Defective construction work, materials or products not remedied;

(c)

Disputed work, materials or products, except that the declined amount may not exceed 150 percent of the amount in dispute;

(d)

Failure to comply with other material provisions of the construction contract;

(e)

A third party claim being filed or reasonable evidence that a third party 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 construction contract terms and conditions.

(6)

An owner may extend the period within which the billing or estimate may be certified if:

(a)

The owner provides drawings 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 drawings and specifications, including bid drawings and specifications and construction drawings and specifications, a statement substantially similar to the following statement:

The construction contract will allow the owner to certify billings and estimates no later than _____ days after the billings and estimates are received from the original contractor.

(7)

Any requirement under this section that a statement be provided on a page of drawings or specifications may be satisfied by placing the required statement on either side of the page.

(8)

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 agree in writing to 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. The billings by any subcontractor or material supplier that does not provide written consent to the change remain subject to the certification period indicated in the drawings and specifications. A construction contract may not be changed in a manner that alters the right of any subcontractor or material supplier to receive prompt and timely progress payments as provided under ORS 701.630 (Payments to subcontractors and material suppliers).

(9)

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 detailed in a written statement under subsection (5) of this section. The owner may also withhold a reasonable amount as retainage. As used in this subsection, “retainage” has the meaning given that term in ORS 701.410 (Definitions).

(10)

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 as described in subsection (3) of this section. When an original contractor completes and an owner approves all work under a portion of a construction contract for which the construction 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 items detailed under subsection (5) of this section or ORS 701.630 (Payments to subcontractors and material suppliers) (4).

(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 no later than 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 no later than five days after the owner makes the final payment to the original contractor on the construction contract.

(13)

If the owner and original contractor are a single entity, that entity shall make progress and final payments to subcontractors and material suppliers as described in subsection (3) or (6) of this section.

(14)

In any action, claim or arbitration brought to collect interest pursuant to this section, the prevailing party shall be awarded costs and reasonable attorney fees. [2003 c.675 §55; 2011 c.553 §2]
Note: See note under 701.620 (Definitions for ORS 701.620 to 701.640).

Source: Section 701.625 — Progress payments; notice requirements; nonapproval of billing or estimate; withholding; final payment, https://www.­oregonlegislature.­gov/bills_laws/ors/ors701.­html.

701.002
Short title
701.005
Definitions
701.010
Exemptions from licensure
701.013
Intent relating to certain business license requirements
701.015
Business license requirements in cities and metropolitan service districts
701.020
Certain cities exempt from application of ORS 701.015
701.021
License requirement
701.026
Subcontractor licensing
701.031
Evidence of doing business as contractor
701.035
Applicant required to be independent contractor to be eligible for license
701.038
Residential limited contractors
701.042
Residential or commercial developers
701.046
License application
701.050
Commercial contractor key employees
701.056
Licensing application fee
701.060
Licensing in another category
701.063
Term of license
701.068
Bonding requirements
701.073
Insurance required of licensed contractors
701.081
Residential contractors
701.082
Residential contractor continuing education requirements
701.083
Residential contractor specialized education programs
701.084
Commercial contractors
701.086
Key employee continuing education
701.088
Contractor rehabilitating illegal drug manufacturing site
701.091
Responsible managing individual
701.093
Change in responsible managing individual
701.094
Definition for ORS 701.098 and 701.102
701.098
Grounds for discipline
701.102
Sanction for past unresolved activity or outstanding matters
701.106
Sanction for violation or failure to comply with certain laws
701.107
Sanction for assisting evasion of obligations
701.108
Failure to comply with prevailing wage rate or other wage and hour standards for energy efficiency and sustainable technology projects
701.109
Reporting of final judgments
701.110
License suspension for unpaid determined wage claim
701.112
Continuation of board authority when change occurs in license status
701.114
Change in responsible managing individual or persons exercising control of contractor
701.117
Contractor to notify board of address change
701.119
Certification to participate in small scale local energy project program
701.120
Specialized education programs
701.122
Training requirements for individuals and businesses
701.128
Suit for damages for misrepresentation
701.131
License required to perfect lien or obtain judicial or administrative remedy
701.133
Notice of intent to file complaint
701.139
Complaint validity
701.140
Types of allowable complaints
701.143
Requirement for timely filing of complaints
701.145
Resolution of complaints involving work on residential structures or certain small commercial structures
701.146
Resolution of complaints involving work on large commercial structures or certain small commercial structures
701.149
Status reports
701.150
Determination of amount to be paid from bond
701.153
Recording of order as lien
701.157
Satisfaction of order against commercial contractor
701.160
Nonlawyer may represent certain forms of businesses before board
701.180
Alternative mediation or arbitration process
701.205
Construction Contractors Board
701.215
Officers
701.225
Investigatory powers of board
701.227
Disqualification from eligibility for certain public contracts
701.230
Board to provide names of unlicensed or improperly endorsed contractors to other state agencies
701.235
Rulemaking
701.238
Determination of licensing application fee
701.240
Provision of licensed contractors list to other state agencies
701.246
Confidentiality of information
701.250
Board to provide licensee’s status on request
701.255
Funds retained for collection of civil penalties
701.260
Appeal committee
701.265
Continuing education system for residential contractors
701.267
Agreements with continuing education providers
701.269
Residential general master builder certification program
701.272
Interagency agreements
701.295
Board duty to investigate and seek prosecution of illegal activity
701.305
Requirement for written contract with residential property owner
701.310
Cancellation of contract
701.312
Additional grounds for placing contractor on probation
701.315
Contents of contract for work on residential structure
701.320
Offer of warranty
701.325
Condition for obtaining building permit
701.330
Consumer notice form
701.335
Recommended maintenance schedule
701.340
Commercial structure warranty
701.345
Subcontractor list
701.348
Sewer contractor requirements
701.410
Definitions
701.420
Partial payment
701.430
Performance bond
701.435
Deposits in lieu of cash retainage
701.440
Applicability to federal projects
701.445
Home inspectors
701.450
Home inspector undertaking of repair work on inspected structure
701.455
Home inspector services contractor license
701.470
Licensing
701.475
Definitions for ORS 701.475 to 701.490
701.480
Certification
701.485
Standards of practice and professional conduct
701.490
Exemptions from certification, licensure and other requirements
701.495
Residential locksmith services contractor license
701.501
Home services contractor license
701.505
Definitions for ORS 701.505 to 701.515
701.510
License required to engage in lead-based paint activity
701.515
Licensing system
701.520
Construction Contractors Board Lead-Based Paint Activities Fund
701.527
Definitions for ORS 702.527 to 701.536
701.529
Certification and licensing requirements
701.532
Home energy assessor certification
701.534
Home energy performance score contractors
701.536
Assessor and contractor exemption from testing and continuing education
701.540
Licensing
701.545
Provision of accessible features list to purchaser
701.547
Model list of accessibility features
701.550
Notice of Department of Consumer and Business Services rules regarding thermostats containing mercury
701.555
Barrier-type exterior insulation and finish systems
701.560
Definitions for ORS 701.560 to 701.595 and 701.605
701.565
Notice of defect requirement
701.570
Secondary notice of defect
701.575
Availability of residence
701.580
Offer by contractor, subcontractor or supplier
701.585
Effect of notice of defect on time for commencing court action
701.595
Failure to follow notice of defect procedure
701.600
Nonapplicability of ORS 701.560 to 701.595 and 701.605
701.605
Recording of written warranty agreement
701.620
Definitions for ORS 701.620 to 701.640
701.625
Progress payments
701.630
Payments to subcontractors and material suppliers
701.635
Suspension of performance
701.640
Prohibition against contrary provisions, covenants or clauses
701.645
Contracts and housing not subject to ORS 701.620 to 701.640
701.990
Criminal penalties
701.992
Civil penalties and other sanctions
701.995
Civil penalties for violations related to lead-based paint activities
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