Construction Lien Release - Oregon

CONSTRUCTION LIEN RELEASE — OREGON

ORS Chapter 87 — Construction Liens

PURPOSE: This document package provides forms and instructions for releasing, discharging, or compelling the removal of a previously recorded construction lien (Claim of Lien) in the State of Oregon. Oregon uses the term "construction lien" rather than "mechanics' lien." This distinction is important for proper statutory references and recording.

TABLE OF CONTENTS

1. Full Release of Construction Lien
2. Partial Release of Construction Lien
3. Release by Surety Bond or Cash Deposit (ORS 87.076)
4. Demand for Release of Construction Lien
5. Petition to Compel Release of Construction Lien
6. Recording Instructions
7. Statutory Deadlines and Penalties
8. Practitioner Notes

1. FULL RELEASE OF CONSTRUCTION LIEN

RELEASE OF CLAIM OF LIEN

AFTER RECORDING, RETURN TO:
[________________________________]
[________________________________]
[________________________________]

STATE OF OREGON
COUNTY OF [________________________________]

1. LIEN CLAIMANT INFORMATION

2. PROPERTY OWNER INFORMATION

3. ORIGINAL LIEN INFORMATION

4. LEGAL DESCRIPTION OF PROPERTY

[________________________________]
[________________________________]
[________________________________]
[________________________________]

5. DESCRIPTION OF IMPROVEMENT

The original Claim of Lien was filed for the following labor, materials, equipment, or services furnished in connection with the improvement of real property:

[________________________________]
[________________________________]
[________________________________]

6. RELEASE

The undersigned lien claimant hereby certifies and declares that the above-referenced Claim of Lien has been fully satisfied and discharged. The claimant has received full payment of all sums claimed under the original lien in the amount of $[________________________________].

The undersigned hereby unconditionally releases the above-described Claim of Lien in its entirety and authorizes the County Clerk/Recorder of [________________________________] County, Oregon, to note this release upon the records.

This release is executed pursuant to ORS 87.057.

7. CERTIFICATION

The undersigned certifies under penalty of perjury that the foregoing statements are true and correct.

Lien Claimant Signature: ______________________________

Printed Name: [________________________________]

Title/Capacity: [________________________________]

Date: [__/__/____]

NOTARIZATION

STATE OF OREGON
COUNTY OF [________________________________]

This instrument was acknowledged before me on [__/__/____] by [________________________________].

Notary Public for Oregon: ______________________________

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARY SEAL]

2. PARTIAL RELEASE OF CONSTRUCTION LIEN

PARTIAL RELEASE OF CLAIM OF LIEN

COUNTY OF [________________________________], OREGON

RECORDING NO. (Original Lien): [________________________________]

1. ORIGINAL LIEN INFORMATION

2. PARTIAL RELEASE

The undersigned lien claimant acknowledges receipt of partial payment in the amount of $[________________________________] and hereby partially releases the above-referenced Claim of Lien to the extent of the payment received.

3. REMAINING LIEN

The Claim of Lien remains in full force and effect as to the remaining balance.

4. SCOPE OF PARTIAL RELEASE

☐ The partial release reduces the lien amount only. The lien continues to encumber the entire property.

☐ The partial release releases the lien as to the following portion of the property:
Tax Lot / Map No.: [________________________________]
Legal Description: [________________________________]
The lien remains in effect against all remaining property described in the original Claim of Lien.

5. RESERVATION OF RIGHTS

The undersigned expressly reserves all rights under the remaining lien balance, including the right to foreclose under ORS 87.060 for the unpaid amount, and all other rights and remedies under Oregon law. The foreclosure deadline under ORS 87.055 continues to run from the original filing date.

Lien Claimant Signature: ______________________________

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

[NOTARIZATION — Same format as Section 1]

3. RELEASE BY SURETY BOND OR CASH DEPOSIT

(ORS 87.076)

Oregon Law: Any person having an interest in the property may release a construction lien by filing with the county clerk either:
- A surety bond in the amount of not less than 150% of the lien claim (or $1,000, whichever is greater), or
- A cash deposit in the same amount with the county treasurer.

After posting the bond or deposit, the interested party may deliver a written demand to the lien claimant requiring release of the lien. If the lien is not released within 10 days after the demand, the claimant is liable for actual costs or $500, whichever is greater. (ORS 87.076)

SURETY BOND TO RELEASE CONSTRUCTION LIEN

KNOW ALL PERSONS BY THESE PRESENTS:

That [________________________________] ("Principal"), as principal, and [________________________________] ("Surety"), a corporation authorized to issue surety bonds in the State of Oregon, as surety, are held and firmly bound unto [________________________________] ("Lien Claimant") in the penal sum of $[________________________________].

RECITALS:

1. On [__/__/____], the Lien Claimant filed a Claim of Lien with the County Clerk of [________________________________] County, Oregon, Recording No. [________________________________], claiming a construction lien in the amount of $[________________________________] against property located at [________________________________], Tax Lot [________________________________].

2. The Principal desires to release the Claim of Lien from the property by posting this surety bond pursuant to ORS 87.076.

3. This bond is in the amount of $[________________________________], which is not less than 150% of the lien claim amount of $[________________________________] (or $1,000, whichever is greater).

CONDITION:

This bond is conditioned upon payment of any judgment and costs that may be rendered in favor of the Lien Claimant in any action to enforce the construction lien, up to the penal sum of this bond.

Upon filing of this bond, the Claim of Lien shall be released from the real property, and the Lien Claimant's security interest, if any, shall attach to this bond.

IN WITNESS WHEREOF, the undersigned have executed this bond on [__/__/____].

PRINCIPAL:

______________________________
[________________________________]
By: [________________________________]
Title: [________________________________]

SURETY:

______________________________
[________________________________] (Surety Company)
By: [________________________________]
Title: Attorney-in-Fact

[CORPORATE SEAL]

Attach: Power of Attorney for Surety's Attorney-in-Fact

DEMAND FOR RELEASE OF CONSTRUCTION LIEN AFTER BOND FILING

(ORS 87.076)

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED OR PERSONAL DELIVERY

Date: [__/__/____]

TO:
[________________________________] (Lien Claimant)
[________________________________]
[________________________________]

FROM:
[________________________________] (Property Owner / Bond Principal)
[________________________________]
[________________________________]

RE: Demand for Release of Construction Lien — ORS 87.076

Dear [________________________________]:

I. BOND/DEPOSIT FILING

Please be advised that on [__/__/____], the undersigned filed the following with the [________________________________] County Clerk (or County Treasurer):

☐ Surety bond in the amount of $[________________________________] (Bond No. [________________________________], issued by [________________________________])

☐ Cash deposit in the amount of $[________________________________] (Receipt No. [________________________________])

This bond/deposit was filed to release your Claim of Lien recorded on [__/__/____], Recording No. [________________________________], in the amount of $[________________________________], against property at [________________________________].

II. DEMAND FOR RELEASE

Pursuant to ORS 87.076, you are hereby required to release the Claim of Lien within ten (10) days from delivery of this demand and notice.

III. CONSEQUENCES OF FAILURE TO RELEASE

If you fail to release the lien within 10 days after delivery of this demand and you do not bring a suit to foreclose the lien within the time provided by ORS 87.055, you will be liable to the undersigned for:

• Actual costs incurred, OR
• $500, whichever is greater.

Additionally, the prevailing party in any action related to this demand is entitled to reasonable attorney's fees under ORS 87.076.

IV. DELIVERY CONFIRMATION

This demand is delivered pursuant to ORS 87.018 by:

☐ Personal delivery on [__/__/____]
☐ Certified mail, return receipt requested, mailed on [__/__/____]
☐ First-class mail to last known address on [__/__/____]

Sincerely,

______________________________
[________________________________]
[________________________________]
Telephone: [________________________________]

NOTICE TO COUNTY TREASURER — REQUEST FOR RETURN OF DEPOSIT

(ORS 87.088)

Date: [__/__/____]

TO: County Treasurer of [________________________________] County, Oregon

FROM: [________________________________] (Depositor)

RE: Request for Release of Deposited Funds — ORS 87.088

The undersigned deposited $[________________________________] with the County Treasurer on [__/__/____] (Receipt No. [________________________________]) pursuant to ORS 87.076 to release a construction lien.

The undersigned hereby requests the return of the deposited funds based on the following:

☐ No foreclosure suit commenced: The lien claimant has failed to commence a foreclosure suit within the time required by ORS 87.055. I have notified the lien claimant and the County Treasurer by certified mail as required by ORS 87.088. More than 15 calendar days have passed since notification, and no objection has been filed.

☐ Court order: A certified copy of the court's order for release is attached.

☐ Written release: A written release of lien signed by the lien claimant is attached.

Depositor Signature: ______________________________

Printed Name: [________________________________]

Date: [__/__/____]

4. DEMAND FOR RELEASE OF CONSTRUCTION LIEN

(General Demand — Satisfied Lien)

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

Date: [__/__/____]

TO:
[________________________________] (Lien Claimant)
[________________________________]
[________________________________]

FROM:
[________________________________] (Property Owner / Interested Party)
[________________________________]
[________________________________]

RE: Demand for Release of Satisfied Construction Lien

Dear [________________________________]:

I. IDENTIFICATION OF LIEN

You filed a Claim of Lien against the following property:

II. SATISFACTION

☐ Full payment of $[________________________________] was tendered and received by you on [__/__/____].
☐ Payment method: ☐ Check No. [____] ☐ Wire Transfer ☐ Cashier's Check ☐ Other: [________________________________]
☐ The lien was satisfied by court order or settlement agreement dated [__/__/____].
☐ The lien has expired under ORS 87.055 (120-day foreclosure deadline passed without suit).

III. DEMAND

You are hereby demanded to record a Release of Claim of Lien with the [________________________________] County Clerk within ten (10) days of your receipt of this demand.

IV. CONSEQUENCES OF FAILURE TO COMPLY

If you fail to release the lien after demand, you may be liable under ORS 87.076 for actual costs or $500, whichever is greater, plus reasonable attorney's fees.

Additionally, the undersigned may file a bond under ORS 87.076, petition the court for an order compelling release, and seek all available statutory and equitable remedies.

V. RESPONSE REQUESTED

Please confirm in writing that the Release of Claim of Lien has been recorded and provide the recording number.

Sincerely,

______________________________
[________________________________]
[________________________________]
Telephone: [________________________________]
Email: [________________________________]

5. PETITION TO COMPEL RELEASE OF CONSTRUCTION LIEN

IN THE CIRCUIT COURT OF THE STATE OF OREGON
FOR THE COUNTY OF [________________________________]

PETITION

[________________________________] ("Petitioner"), by and through undersigned counsel, respectfully petitions this Court for an order compelling the release of the construction lien filed by [________________________________] ("Respondent") and states as follows:

I. PARTIES AND PROPERTY

1. Petitioner is the owner of real property located at [________________________________], Tax Lot [________________________________], in [________________________________] County, Oregon.

2. Respondent filed a Claim of Lien with the County Clerk of [________________________________] County on [__/__/____], Recording No. [________________________________], claiming a construction lien in the amount of $[________________________________].

II. GROUNDS FOR COMPELLED RELEASE

☐ Satisfied Lien: The lien was fully satisfied by payment of $[________________________________] on [__/__/____]. Respondent has failed to release the lien despite written demand served on [__/__/____].

☐ Expired Lien (ORS 87.055): The lien has expired because Respondent failed to commence a foreclosure action within 120 days of filing the Claim of Lien.

☐ Bond/Deposit Filed (ORS 87.076): A surety bond or cash deposit in the amount of $[________________________________] (150% of the lien amount) was filed on [__/__/____], and a demand for release was delivered on [__/__/____]. More than 10 days have elapsed without release or commencement of foreclosure.

☐ Invalid Lien:
☐ The Claim of Lien was not filed within 75 days of completion of work or cessation of labor/materials (ORS 87.035).
☐ The claimant failed to provide required notice to the property owner under ORS 87.021 or ORS 87.023.
☐ The lien was filed by a person not licensed by the Construction Contractors Board as required by ORS 87.036.
☐ The claimant is not a person entitled to a construction lien under ORS 87.010.
☐ Other: [________________________________]

☐ Exaggerated Lien: The lien amount ($[________________________________]) materially exceeds the true amount owed ($[________________________________]).

III. ATTORNEY FEES AND PENALTIES

3. Pursuant to ORS 87.076, the Respondent is liable for actual costs incurred or $500, whichever is greater, for failure to release the lien within 10 days of demand after bond/deposit filing.

4. Petitioner is entitled to reasonable attorney's fees under ORS 87.076 as the prevailing party.

IV. RELIEF REQUESTED

WHEREFORE, Petitioner respectfully requests that this Court:

1. Order the Respondent to release the Claim of Lien, Recording No. [________________________________], within [____] days;
2. If Respondent fails to comply, order the County Clerk of [________________________________] County to note the release on the records;
3. Award Petitioner actual costs or $500, whichever is greater, under ORS 87.076;
4. Award Petitioner reasonable attorney's fees under ORS 87.076;
5. Award Petitioner all damages caused by the improper lien;
6. Grant such other relief as this Court deems just and equitable.

DATED: [__/__/____]

Respectfully submitted,

______________________________
[________________________________], Esq.
Oregon State Bar No. [________________________________]
[________________________________]
[________________________________]
Telephone: [________________________________]
Email: [________________________________]

Attorney for Petitioner

CERTIFICATE OF SERVICE

I certify that on [__/__/____], I served a true copy of the foregoing Petition upon:

[________________________________]
[________________________________]
[________________________________]

☐ By personal service
☐ By first-class mail, postage prepaid
☐ By certified mail, return receipt requested

______________________________
[________________________________]

6. RECORDING INSTRUCTIONS

Oregon County Clerk Filing Requirements

Filing Office: County Clerk of the county where the Claim of Lien was recorded.

Important: Oregon uses "County Clerk" rather than "County Recorder" in most counties for real property recording. Some counties have a separate Recorder's Office.

General Requirements:

Major County Clerk Offices:

7. STATUTORY DEADLINES AND PENALTIES

8. PRACTITIONER NOTES

Key Considerations for Oregon Construction Lien Releases

A. "Construction Lien" — Not "Mechanics' Lien"

Oregon uses the statutory term "construction lien" (ORS Chapter 87). While "mechanics' lien" is sometimes used colloquially, all legal documents, recordings, and court filings should use "construction lien" to maintain accuracy and avoid potential challenges.

B. 120-Day Foreclosure Deadline — Extremely Short

Oregon's 120-day foreclosure deadline (from the date of filing the Claim of Lien, not from completion of work) is one of the shortest in the nation. This means many Oregon construction liens expire relatively quickly. Property owners should calendar the 120th day after the lien was filed and, if no foreclosure suit is commenced, use the expired lien as grounds for release.

C. ORS 87.076 — Bond/Demand Procedure Is Highly Effective

The Oregon bond/demand procedure is one of the most powerful lien-clearing tools available:

1. File bond (150% of lien amount or $1,000 minimum) with county clerk
2. Deliver written demand to lien claimant
3. Claimant has 10 days to release
4. If not released and no suit filed, claimant owes actual costs or $500 minimum
5. Prevailing party gets attorney's fees

This creates significant pressure on lien claimants to either release or promptly foreclose.

D. CCB Licensing Requirement (ORS 87.036)

Oregon requires that the lien claimant hold a valid Construction Contractors Board (CCB) license at the time the Claim of Lien is filed. A lien filed by an unlicensed contractor is invalid and subject to immediate release. Always verify CCB licensure when evaluating a lien for discharge.

E. Information Notice to Owner (ORS 87.021)

Before or at the time of first delivery of materials or services, contractors must provide an "Information Notice to Owner" in the form prescribed by statute. Failure to provide this notice may invalidate the lien, providing grounds for release. This applies particularly to residential projects.

F. Cash Deposit vs. Surety Bond

Cash deposits are held by the county treasurer and are subject to the return procedures in ORS 87.088. Investment income on deposited funds belongs to the depositor. Surety bonds avoid tying up cash but require surety company approval and premium payment (typically 1-3% of bond amount).

G. Multiple County Recording

If the property spans multiple counties, the Claim of Lien and any release documents may need to be recorded in each county. Verify the legal description to determine whether multi-county recording is required.

H. Attorney Fees — Prevailing Party Standard

Oregon's construction lien statutes include mandatory attorney fee provisions for the prevailing party (ORS 87.076). This applies to both lien claimants and property owners. Practitioners should factor attorney fee exposure into settlement calculations.

SOURCES AND REFERENCES

• ORS Chapter 87 — Construction Liens
• ORS 87.076 — Bond or Deposit; Demand for Release
• ORS 87.088 — Release of Lien or Return of Money
• Oregon Mechanics Lien FAQs — Levelset
• Oregon Construction Contractors Board