ORS 701.068
Bonding requirements

  • action against surety
  • rules

(1)

An applicant for issuance or renewal of a contractor license shall file with the Construction Contractors Board a surety bond with one or more corporate sureties authorized to do business in this state in the amount set forth in ORS 701.081 (Residential contractors) or 701.084 (Commercial contractors).

(2)

If an applicant for issuance, renewal or an additional endorsement of a license will hold endorsements as both a residential contractor and a commercial contractor, the applicant shall file with the board a surety bond for each endorsement in the amount set forth in ORS 701.081 (Residential contractors) or 701.084 (Commercial contractors).

(3)

The surety bond for a residential contractor must provide that the applicant, with regard to work subject to this chapter, will pay amounts determined by the board as provided under ORS 701.145 (Resolution of complaints involving work on residential structures or certain small commercial structures). The surety bond for a commercial contractor must provide that the applicant, with regard to work subject to this chapter, will pay amounts determined by the board as provided under ORS 701.146 (Resolution of complaints involving work on large commercial structures or certain small commercial structures). Bonds filed under this section shall remain in effect for at least one year or until depleted by payments under ORS 701.150 (Determination of amount to be paid from bond), 701.153 (Recording of order as lien) and 701.157 (Satisfaction of order against commercial contractor), unless the surety sooner cancels the bond. At the discretion of the surety the bond may be continued for an additional period by continuation certificate. Except as provided in subsection (4) of this section, the aggregate liability of the surety under the bond for complaints against the contractor may not exceed the penal sum of the bond no matter how many years the bond is in force. Except as provided in subsection (4) of this section, an extension by continuation certificate, reinstatement, reissue or renewal of the bond may not increase the liability of the surety.

(4)

The board, by rule, may require a licensee to obtain a new surety bond if, pursuant to a board determination issued under ORS 701.145 (Resolution of complaints involving work on residential structures or certain small commercial structures) or 701.146 (Resolution of complaints involving work on large commercial structures or certain small commercial structures), the surety pays an amount out of the bond of the licensee. The new surety bond must be in the applicable amount set forth in ORS 701.081 (Residential contractors) or 701.084 (Commercial contractors) unless a higher amount is required by a board condition or rule described in subsection (5) or (6) of this section. The board may allow a licensee to obtain, instead of a new bond, a certification that the surety remains liable for the full penal sum of the bond, notwithstanding payment by the surety on the complaint.

(5)

If the amount the licensee must pay against the bond under subsection (3) of this section exceeds the amount of the bond, the board shall suspend the contractor’s license until the amount owed is paid. The board, as a condition of ending the suspension, may require a contractor requesting reinstatement of a license to file a bond of an amount up to five times as much as the amount required ordinarily of a licensee under ORS 701.081 (Residential contractors) or 701.084 (Commercial contractors).

(6)

The board by rule may establish conditions for applicants or persons licensed under this chapter under which the applicant or licensee must file a bond of an amount up to five times as much as the amount required ordinarily of an applicant or licensee under ORS 701.081 (Residential contractors) or 701.084 (Commercial contractors). The board may reduce the amount of bond it would otherwise require if the contractor demonstrates satisfactory completion of approved elective classes on dispute resolution and prevention, basic accounting and record keeping or such other classes as the board may prescribe.

(7)

The bond required under this section is for the exclusive purpose of payment of amounts for which the board has determined the surety to have responsibility.

(8)

Upon issuance of a determination under ORS 701.145 (Resolution of complaints involving work on residential structures or certain small commercial structures) or 701.146 (Resolution of complaints involving work on large commercial structures or certain small commercial structures) for a complaint against a contractor who holds a bond required under this section, the board shall notify the surety on the bond of the determination in a manner determined by the board by rule. The notification shall include a list of all board determinations for payment by the surety from the bond.

(9)

A court action may not be commenced against a surety on a bond required under this section until 30 days after the date that the surety is notified by the board under ORS 701.150 (Determination of amount to be paid from bond) that payment is due on the determination.

(10)

In any action against a surety on a bond under this section that is based on the failure of the surety to pay an amount determined by the board, the court may award:

(a)

Costs;

(b)

Reasonable attorney fees to the prevailing party as part of the costs; and

(c)

Twice the amount that the board determined the surety must pay on the complaint, if the surety arbitrarily and capriciously refused to pay. [Formerly 701.085; 2009 c.225 §1; 2011 c.630 §§39,60; 2016 c.99 §2]

Source: Section 701.068 — Bonding requirements; action against surety; rules, https://www.­oregonlegislature.­gov/bills_laws/ors/ors701.­html.

(formerly 701.085)

Notes of Decisions

A claim against the bond was valid for the full amount of a judgment, including attorney fees and costs, against the builder for breach of a contract that included installation of appliances and landscaping. Robinson v. Builders Bd., 20 Or App 340, 531 P2d 752 (1975)

Attorney General Opinions

Registration requirements for persons not engaged in construction of items not physically attached to the residential structure, (1975) Vol 37, p 676

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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