2007 ORS 87.025¹
Priority of perfected liens
  • right to sell improvements separately from land
  • notice to mortgagee
  • list of materials or supplies

(1) A lien created under ORS 87.010 (Construction liens) (2) or (6) and perfected under ORS 87.035 (Perfecting lien) upon any lot or parcel of land shall be preferred to any lien, mortgage or other encumbrance which attached to the land after or was unrecorded at the time of commencement of the improvement.

(2) Except as provided in subsections (3) and (6) of this section, a lien created under ORS 87.010 (Construction liens) (1), (4) or (5) and perfected under ORS 87.035 (Perfecting lien) upon any improvement shall be preferred to all prior liens, mortgages or other encumbrances upon the land upon which the improvement was constructed. To enforce such lien the improvement may be sold separately from the land; and the purchaser may remove the improvement within a reasonable time thereafter, not to exceed 30 days, upon the payment to the owner of the land of a reasonable rent for its use from the date of its purchase to the time of removal. If such removal is prevented by legal proceedings, the 30 days shall not begin to run until the final determination of such proceedings in the court of first resort or the appellate court if appeal is taken.

(3) No lien for materials or supplies shall have priority over any recorded mortgage or trust deed on either the land or improvement unless the person furnishing the material or supplies, not later than eight days, not including Saturdays, Sundays and other holidays as defined in ORS 187.010 (Legal holidays), after the date of delivery of material or supplies for which a lien may be claimed delivers to the mortgagee either a copy of the notice given to the owner under ORS 87.021 (Notice to owners) to protect the right to claim a lien on the material or supplies or a notice in any form that provides substantially the same information as the form set forth in ORS 87.023 (Notice of right to lien).

(4) A mortgagee who has received notice of delivery of materials or supplies in accordance with the provisions of subsection (3) of this section, may demand a list of those materials or supplies including a statement of the amount due by reason of delivery thereof. The list of materials or supplies shall be delivered to the mortgagee within 15 days, not including Saturdays, Sundays and other holidays as defined in ORS 187.010 (Legal holidays), of receipt of demand, as evidenced by a receipt or a receipt of delivery of a registered or certified letter containing the demand. Failure to furnish the list or the amount due by the person giving notice of delivery of the materials or supplies shall constitute a waiver of the preference provided in subsections (1) and (2) of this section.

(5) Upon payment and acceptance of the amount due to the supplier of materials or supplies, and upon demand of the person making payment, the supplier shall execute a waiver of all lien rights as to materials or supplies for which payment has been made.

(6) Unless the mortgage or trust deed is given to secure a loan made to finance the alteration or repair, a lien created under ORS 87.010 (Construction liens) and perfected under ORS 87.035 (Perfecting lien) for the alteration and repair of an improvement commenced and made subsequent to the date of record of a duly executed and recorded mortgage or trust deed on that improvement or on the site shall not take precedence over the mortgage or trust deed.

(7) The perfection of a lien under ORS 87.035 (Perfecting lien) relates to the date of commencement of the improvement as defined in ORS 87.005 (Definitions for ORS 87.001 to 87.060 and 87.075 to 87.093). Except as provided in subsection (3) of this section, the date of creation of the lien under ORS 87.010 (Construction liens) and the date of perfection of the lien under ORS 87.035 (Perfecting lien) do not affect the priorities under this section, the equal priority of perfected lien claimants, or the distribution of proceeds to perfected lien claimants under ORS 87.060 (Foreclosure) (6). [Amended by 1965 c.446 §2; 1967 c.602 §2; 1975 c.466 §8; 1981 c.757 §6; 1983 c.513 §1; 1983 c.674 §3; 1985 c.513 §1; 1987 c.662 §3]

Notes of Decisions

This statute does not require notice to holders of both prior and sub­se­quently recorded mortgages and thus the construc­tion lien took precedence over mortgage not recorded until after holder of the lien commenced to deliver ma­te­ri­als to the prop­erty. Hickey v. Polachek, 63 Or App 784, 666 P2d 294 (1983)

For per­son claiming lien based on pro­vi­sion of ma­te­ri­als to obtain priority over prior mortgagee, lien claimant must provide mortgagee with notice of ma­te­ri­als provided, whether or not labor is also provided. Safeport, Inc. v. Equip­ment Roundup & Manufacturing, Inc., 184 Or App 690, 60 P3d 1076 (2002), Sup Ct review denied

Law Review Cita­tions

41 WLR 95 (2005)

Notes of Decisions

In absence of express waiver by contractor of right to file construc­tion lien, agree­ment to arbitrate disputes did not prevent filing of lien and thereafter foreclosing to recover unpaid amounts and costs and attorney fees incurred in prepara­tion, filing and foreclosure of lien claim. Harris v. Dyer, 50 Or App 223, 623 P2d 662 (1981), as modified by 292 Or 233, 637 P2d 918 (1981)

1 Legislative Counsel Committee, CHAPTER 87—Statutory Liens, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­087.­html (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 87, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­087ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.