Construction Defect Demand Letter - Oregon

CONSTRUCTION DEFECT DEMAND LETTER

STATE OF OREGON

NOTICE OF DEFECT UNDER ORS 701.565

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND REGULAR FIRST-CLASS MAIL

[DATE]

[CONTRACTOR/BUILDER NAME]
[ADDRESS]
[CITY, STATE ZIP]
Oregon CCB License No.: [LICENSE NUMBER]

Re: STATUTORY NOTICE OF CONSTRUCTION DEFECTS
Property Address: [PROPERTY ADDRESS]
Owner: [OWNER NAME]
Original Contract Date: [DATE]
Substantial Completion Date: [DATE]

Dear Sir or Madam:

This firm represents [OWNER NAME] ("Owner") regarding construction defects at the above-referenced property. If the claim falls within ORS 701.560 through 701.600, this letter is intended to serve as the notice of defect required by ORS 701.565. The Owner may seek to compel arbitration or bring a court action against the contractor, subcontractor, or supplier concerning the defects and incidental damage described below.

SEND ANY REQUEST FOR A VISUAL EXAMINATION OR INSPECTION, AND THE WRITTEN RESPONSE, WITHIN THE APPLICABLE STATUTORY PERIODS.

I. OREGON-SPECIFIC LEGAL FRAMEWORK

A. Oregon Construction Defect Notice and Opportunity to Repair Act

ORS 701.565 and 701.575 establish a notice-and-access procedure before an owner may compel arbitration or commence a court action for a covered defect in the construction, alteration, or repair of an Oregon residence. The procedure applies to covered claims against contractors, subcontractors, and suppliers; ORS 701.600 excludes specified matters, including personal-injury or death claims, Construction Contractors Board complaints under ORS 701.139, claims against registered architects, small-claims matters, and qualifying counterclaims or responses.

For an individual owner, the principal steps are:

• Send the notice by registered or certified mail, return receipt requested, to the contractor's or subcontractor's last known address in Construction Contractors Board records. ORS 701.565(2).
• State the owner or legal representative's name and mailing address, the residence address and location, each defect, the requested remediation, incidental damage, and supporting reports or documents. ORS 701.565(3).
• A recipient may request a visual examination within 14 days after receipt and may request a further inspection within 14 days after the visual examination. ORS 701.570(2)-(3).
• The owner must provide visual-examination access within 20 days after the request and reasonable inspection access. ORS 701.575(1)-(3).
• Unless the owner agrees otherwise, the recipient must send the certified or registered written response no later than 90 days after receipt. ORS 701.570(5).

This is not a blanket rule requiring the owner to wait 90 days in every case. ORS 701.580(4) identifies when the owner may proceed, including no timely response, a response without a remediation or monetary offer, rejection of an offer, or failure to perform an accepted offer. An owner generally has 30 days to accept an offer before it is deemed rejected. ORS 701.580(1).

Association claimants: If the owner is a homeowners association or association of unit owners, ORS 701.572 changes the examination, inspection, response, payment-offer, and dispute-resolution rules. Do not use the individual-owner timeline without association-specific review.

B. Statute of Limitations

Oregon law provides the following limitations periods for construction defect claims:

These are outer summaries, not deadline calculations. The claim theory, accrual rule, contract terms, discovery date, defendant, and tolling provisions must be analyzed separately. ORS 72.7250 does not create a four-year period for every construction or habitability warranty; it governs contracts for sale of goods.

C. Statute of Repose

For a non-public plaintiff, ORS 12.135 generally requires construction-related claims to be commenced before the earliest of the otherwise applicable limitation period or:

• 10 years after substantial completion or abandonment of a residential or small commercial structure; or
• 6 years after substantial completion or abandonment of a large commercial structure.

For a tort action by a homeowners association or association of unit owners, ORS 12.135(4) now provides a 7-year period, with a one-year discovery extension for a defect discovered more than six but less than seven years after substantial completion or abandonment. Oregon Laws 2025, chapter 578 limits that amendment to structures whose declaration was first recorded on or after the Act's effective date; project-specific review is required.

"Substantial completion" is the earliest statutory trigger among written acceptance (or acceptance of completed work if there is no written acceptance), issuance of a certificate of occupancy, or the owner's occupancy or intended use. Remediation under an accepted ORS 701.570 or 701.572 offer relates back and does not restart ORS 12.135. ORS 701.585(4).

D. Implied Warranties in Oregon

Oregon recognizes the following implied warranties in residential construction:

1. Builder-vendor warranty: A builder-vendor of a new home impliedly warrants that the structure was built in a proper and reasonably workmanlike manner and is fit for habitation. Yepsen v. Burgess, 269 Or. 635, 525 P.2d 1019 (1974).

2. Contract characterization: An action for breach of the implied warranty of habitability is contractual. Cabal v. Donnelly, 302 Or. 115, 727 P.2d 111 (1986). Warranty availability and scope depend on the transaction, the parties, the property, disclaimers, and the alleged defect.

3. Negligent property damage: A homeowner may pursue a negligence theory for property damage caused by defective construction even when the homeowner contracted with the builder. Abraham v. T. Henry Construction, Inc., 350 Or. 29, 249 P.3d 534 (2011). The claim still requires an independently imposed standard of care and cognizable property damage; contract duties and purely economic loss must be analyzed separately.

E. Contractor Licensing Requirements

Subject to statutory exemptions, ORS 701.021 requires a contractor to hold a current Construction Contractors Board license with the proper endorsement. ORS 701.131 may prevent a contractor from perfecting a lien, filing a board complaint, commencing arbitration, or pursuing a court claim for compensation unless the contractor was properly licensed at the required times, subject to the section's stated exceptions. It does not categorically void every construction contract or eliminate the owner's claims.

II. PROPERTY AND PROJECT INFORMATION

A. Property Description

B. Project Information

C. Parties Involved

General Contractor:

• Name: [NAME]
• CCB License Number: [NUMBER]
• Address: [ADDRESS]
• Contact: [PHONE/EMAIL]

Subcontractors: (List all subcontractors whose work is believed defective)

III. DESCRIPTION OF DEFECTS

Pursuant to ORS 701.565, the following is a detailed description of each claimed construction defect:

DEFECT #1: [TITLE - e.g., FOUNDATION CRACKING]

Location: [Specific location within the property]

Description: [Detailed description of the defect, including how it manifests, when it was discovered, and any progression]

Remediation Believed Necessary: [DESCRIBE REQUESTED REPAIR, REPLACEMENT, TESTING, OR OTHER REMEDIATION]

Incidental Damage Not Curable by Remediation: [DESCRIBE OR STATE "NONE presently identified"]

Building Components Affected:
☐ Foundation/Slab ☐ Framing ☐ Roofing ☐ Exterior walls/Siding ☐ Windows/Doors
☐ Plumbing ☐ Electrical ☐ HVAC ☐ Insulation ☐ Drywall/Interior finishes
☐ Flooring ☐ Waterproofing ☐ Drainage ☐ Other: [SPECIFY]

Evidence Supporting Defect:
[Describe supporting evidence - expert reports, photographs, testing results, etc.]

Supporting Report or Document Enclosed: [IDENTIFY DOCUMENT OR STATE "NONE presently available"]

Standards Violated:
☐ Oregon Structural Specialty Code
☐ Oregon Residential Specialty Code
☐ Manufacturer's Installation Instructions
☐ Industry Standards (IRC, IBC, ASTM)
☐ Contract Specifications
☐ Implied Warranty of Workmanship
☐ Implied Warranty of Habitability

Date First Observed: [DATE]

Estimated Cost to Repair: $[AMOUNT]

DEFECT #2: [TITLE]

[REPEAT FORMAT ABOVE FOR EACH DEFECT]

IV. SUMMARY OF DEFECTS AND DAMAGES

V. LEGAL BASIS FOR CLAIMS

A. Breach of Contract

You failed to perform construction in accordance with the contract terms, plans, specifications, and applicable building codes.

B. Breach of Express Warranty

You provided express warranties regarding quality and durability of construction which you have breached.

C. Breach of Implied Warranty of Habitability

If the builder-vendor/new-home rule applies, the alleged defects breach the implied warranty recognized in Yepsen v. Burgess, 269 Or. 635, 525 P.2d 1019 (1974), and characterized as contractual in Cabal v. Donnelly, 302 Or. 115, 727 P.2d 111 (1986).

D. Breach of Implied Warranty of Workmanlike Construction

To the extent applicable to this transaction and work, the alleged defects breach the implied contractual requirement of proper and reasonably workmanlike construction recognized in Yepsen and related Oregon authority.

E. Negligence

To the extent the facts establish property damage and a standard of care imposed independently of the contract, the defective work may support a negligence claim under Abraham v. T. Henry Construction, Inc., 350 Or. 29, 249 P.3d 534 (2011).

F. Violation of Building Codes

The work appears to violate the project-specific state or local code provisions identified below. Verify the code, edition, local amendments, effective date, and cited section before asserting a violation.

VI. STATUTORY NOTICE REQUIREMENTS

A. Your Rights Under ORS 701.560 et seq.

For an individual-owner notice, ORS 701.570 permits the recipient to:

1. Request a visual examination within 14 days after receiving this notice.
2. Request an inspection within 14 days after conducting the visual examination.
3. Send a written response acknowledging, differently describing, or denying each defect and offering remediation, monetary compensation, or denying responsibility.
4. Send any secondary notice to a known potentially responsible contractor, subcontractor, or supplier within 14 days after receiving this notice.

If the Owner is an association, ORS 701.572 substitutes association-specific periods and requirements.

B. Response Timeline (ORS 701.570)

1. Within 14 days after receipt: Request a visual examination, if desired.
2. Within 14 days after the visual examination: Request a further inspection, if desired.
3. No later than 90 days after receipt: Send the written response by registered or certified mail, return receipt requested, unless the Owner agrees otherwise or ORS 701.572 supplies the association timeline.
4. Within 30 days after an offer is received: The Owner may accept; otherwise the offer is generally deemed rejected. ORS 701.580(1).

C. Consequences of Non-Response

If the recipient does not send a timely response, sends a response without a remediation or monetary offer, fails to perform an accepted offer, or the Owner rejects an offer, ORS 701.580(4) permits the Owner to compel arbitration or commence a court action. If the Owner fails to follow ORS 701.565 and 701.575, ORS 701.595 requires dismissal without prejudice until the Owner follows the procedure.

VII. DEMAND FOR INSPECTION ACCESS

The Owner will provide the access required by ORS 701.575. To schedule a visual examination or inspection:

1. Send the statutory written request within the applicable period
2. Propose inspection dates during reasonable business hours
3. For an inspection request, state the nature and scope, whether testing is proposed, and the estimated time required
4. Identify all persons and experts who will attend

The Owner will make the residence available for a requested visual examination within 20 days after receiving the request, during normal business hours or as otherwise agreed. Reasonable testing may be conducted during an inspection; absent agreement otherwise, the inspecting party must repair damage caused by the inspection. ORS 701.575.

Contact Information:
[LAW FIRM NAME]
[ADDRESS]
[PHONE]
[EMAIL]

VIII. PRESERVATION OF EVIDENCE

Please preserve all documents and materials relating to the construction, including:

• All contracts and subcontracts
• Plans, specifications, and drawings
• Inspection reports and quality control records
• Correspondence with owner and subcontractors
• Photographs taken during construction
• Daily logs and progress reports
• Warranties from manufacturers
• Insurance policies and certificates

This preservation request does not authorize destructive testing, alteration of the property, or disposal of materials without coordinating reasonable notice and documentation.

IX. SETTLEMENT DEMAND

To resolve this matter without litigation, we demand:

Option A - Repair by Contractor:

1. Complete repair of all identified defects within [NUMBER] days
2. All repairs warranted for minimum of [NUMBER] years
3. Payment of investigation and expert costs, to the extent recoverable or agreed: $[AMOUNT]
4. Payment of attorney's fees only if supported by contract or applicable law: $[AMOUNT]

Option B - Monetary Settlement:
Payment of $[AMOUNT] by [DATE].

X. CONCLUSION

Please send any visual-examination or inspection request, and the written response, within the periods specified in ORS 701.570 or, for an association claimant, ORS 701.572. The Owner reserves the right to proceed as authorized by ORS 701.580 and all other applicable law.

Respectfully submitted,

[LAW FIRM NAME]

By: _________________________________
[ATTORNEY NAME]
Oregon State Bar No. [NUMBER]
[ADDRESS]
[CITY, STATE ZIP]
[TELEPHONE]
[EMAIL]

Attorneys for [OWNER NAME]

ENCLOSURES:
☐ Photographs of defects
☐ Expert report(s)
☐ Repair estimates
☐ Copy of construction contract
☐ Correspondence history

cc: [OWNER NAME]
[INSURANCE CARRIER]
[OTHER RECIPIENTS, IF ANY]

OREGON-SPECIFIC PRACTICE NOTES

Notice Procedure (ORS 701.560-701.600):

• Confirm that the property is a statutory "residence," the sender is an "owner," the recipient is a covered contractor, subcontractor, or supplier, and no ORS 701.600 exclusion applies.
• The notice must be sent by registered or certified mail, return receipt requested, to the statutory address and must include every item listed in ORS 701.565(3).
• The individual-owner timeline is 14 days for a visual-examination request, another 14 days after the visual examination for an inspection request, 20 days for the owner to provide visual-examination access, and up to 90 days for the written response.
• Associations use the materially different ORS 701.572 procedure.
• Noncompliance by the owner results in dismissal without prejudice under ORS 701.595, not a merits adjudication.

Offers, Filing, and Tolling:

• ORS 701.580 identifies when the owner may proceed to arbitration or court; there is no universal 90-day waiting period.
• An owner generally has 30 days to accept an offer before it is deemed rejected.
• A timely notice can extend the filing period under ORS 701.585(1), but deadline calculations are fact-specific. Send notice before the existing deadline; do not assume the procedure revives an expired claim.
• Remediation does not restart ORS 12.135. ORS 701.585(4).

Implied Warranty and Tort Theories:

• Yepsen recognizes a builder-vendor warranty that a new home was built properly and in a reasonably workmanlike manner and is fit for habitation.
• Cabal treats the implied habitability warranty as contractual.
• Abraham permits a negligence claim for construction-caused property damage notwithstanding contractual privity, but the independent standard of care, property damage, and economic-loss issues still require analysis.

Contractor Licensing:

• Verify the recipient's license and endorsement under ORS 701.021 and the statutory exemptions in ORS 701.010.
• ORS 701.131 restricts specified contractor remedies for compensation and contains exceptions; it does not automatically void every contract.
• A CCB complaint under ORS 701.139 is a separate path excluded from the ORS 701.560-.595 notice procedure by ORS 701.600(2).

Statute of Repose (ORS 12.135):

• The ordinary periods are 10 years for residential/small commercial structures and 6 years for large commercial structures, subject to the otherwise applicable limitation period.
• Qualifying association tort claims may have the 7-year/one-year-discovery structure in ORS 12.135(4), subject to Oregon Laws 2025, chapter 578's applicability rule.
• Use the statutory earliest-of definition of substantial completion; do not rely only on a contractual completion label.

Discovery Rule:

• ORS 12.110(1) expressly applies discovery accrual to fraud or deceit, and Oregon construction tort claims ordinarily accrue when the plaintiff discovers or should discover the injury. Abraham, 350 Or. at 34 n.3.
• Do not apply a discovery rule automatically to a contract claim under ORS 12.080. Determine accrual separately for each theory.

SOURCES AND REFERENCES

• Oregon Legislature — ORS Chapter 701
• Oregon Legislature — ORS Chapter 12
• Oregon Legislature — ORS Chapter 72
• Oregon Legislature — Enrolled HB 3746 (2025)
• Oregon Legislature — ORS Chapter 12 annotations
• Oregon Supreme Court — Abraham v. T. Henry Construction, Inc.
• Yepsen v. Burgess, 269 Or. 635, 525 P.2d 1019 (1974)
• Cabal v. Donnelly, 302 Or. 115, 727 P.2d 111 (1986)

This template is for informational purposes only and does not constitute legal advice. Consult a licensed Oregon attorney before use.