Construction Lien Release - Oregon

CONSTRUCTION LIEN RELEASE — OREGON

ORS Chapter 87 — Construction Liens

PURPOSE: This document package provides forms and instructions for releasing or discharging 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. Recording Instructions
6. Statutory Deadlines and Penalties
7. 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 by the lien claimant to document satisfaction of the recorded claim of lien identified above.

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 applicable foreclosure deadline under ORS 87.055 continues to run; check the filed claim for stated extended-payment terms and the two-year outer limit 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: An owner or interested person may replace the property as security for a construction lien by:
- Filing a surety bond with the county recording officer where the lien claim was filed, in the amount of not less than 150% of the lien claim (or $1,000, whichever is greater); or
- Depositing money or its equivalent in the same minimum amount with that county's treasurer.

A person eligible to post a bond or deposit may deliver the written demand described in ORS 87.076(4)(a). Its cost remedy requires more than an unanswered demand: the claimant must fail to release the lien within 10 days and fail to bring a timely foreclosure suit, while the demanding person complies with ORS 87.076, 87.078 and 87.081. The recoverable amount is the actual compliance costs or $500, whichever is greater.

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 provided the following security in [________________________________] County, Oregon:

☐ Surety bond filed with the county recording officer in the amount of $[________________________________] (Bond No. [________________________________], issued by [________________________________])

☐ Money or its equivalent deposited with the county treasurer in the amount of $[________________________________] (Receipt No. [________________________________])

The bond was filed or the money deposited 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(4)(a), I demand that you release the Claim of Lien within ten (10) days after delivery of this demand and notice. Filing and service of the bond or deposit, and the affidavit required by ORS 87.081, must also be completed for the statutory cost remedy.

III. CONSEQUENCES OF FAILURE TO RELEASE

If you fail to release the lien within 10 days after delivery of this demand and do not bring a suit to foreclose within the period in ORS 87.055, and I comply with ORS 87.076, 87.078 and 87.081, ORS 87.076(4)(a) provides a claim for:

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

Attorney fees in a later damages action depend on the written demand for payment and tender rules in ORS 87.076(4)(b); this demand for lien release alone is not a blanket fee entitlement. Fees in a lien foreclosure suit are governed separately by ORS 87.060(5).

IV. DELIVERY CONFIRMATION

This demand is delivered pursuant to ORS 87.018 by:

☐ Personal delivery on [__/__/____]
☐ Certified mail, return receipt requested, mailed on [__/__/____]
☐ Registered mail, mailed 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 applicable ORS 87.055 period has expired without suit: 120 days after claim filing, or, if the filed claim states extended-payment terms, 120 days after that payment expired, subject to the two-year limit from filing. Filed claim and payment terms reviewed: [________________________________].

III. DEMAND

You are requested to record a Release of Claim of Lien with the [________________________________] County Clerk within [____] days of your receipt of this general demand. This is not an ORS 87.076(4)(a) demand unless the statutory bond or deposit procedure is completed.

IV. CONSEQUENCES OF FAILURE TO COMPLY

This general demand alone does not trigger the costs, $500 alternative, or attorney-fee provisions of ORS 87.076. Any claim to those remedies requires proof of the applicable statutory conditions.

The undersigned may use the bond or deposit process in ORS 87.076 and may seek a court order only on an independently available legal claim. ORS 87.089 does not make the bond provisions a standalone cause of action.

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. 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: Verify each office's current mailing instructions before sending a document; the addresses below are office locations.

For Marion County mail, the Clerk lists PO Box 14500, Salem, OR 97309, separately from its office location.

6. STATUTORY DEADLINES AND PENALTIES

7. 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

The ordinary foreclosure period is 120 days after claim filing. If the filed claim states extended-payment terms, ORS 87.055 instead allows suit within 120 days after that payment expires; no agreement continues the lien beyond two years after claim filing. Before asserting expiration, inspect the filed claim and calculate the applicable deadline.

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 a bond (150% of lien amount or $1,000 minimum) with the county recording officer, or deposit the same minimum amount with the county treasurer
2. Deliver written demand to lien claimant
3. Claimant has 10 days to release
4. If no release within 10 days and no timely foreclosure, the demanding person must also satisfy ORS 87.076, 87.078 and 87.081 before claiming actual compliance costs or the $500 alternative
5. Attorney fees require the separate conditions of ORS 87.076(4)(b), or arise in a lien foreclosure suit under ORS 87.060(5)

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

D. CCB Licensing and Lien Eligibility

ORS 87.036 addresses a subcontractor or supplier on an existing owner-occupied residence who worked through an unlicensed contractor, using the earlier of contracting or first delivery to the site. It does not impose a universal license-at-filing rule. Before alleging a separate claimant-licensing defect, identify the claimant's status, work dates, license record, and controlling provision.

E. Information Notice to Owner (ORS 87.093)

For a residential construction or improvement contract exceeding $2,000, the original contractor must deliver the statutory Information Notice to Owner to the owner or the owner's agent at contract signing. If the price later exceeds $2,000, delivery is due within five days after the contractor knows or should know of that increase. ORS 87.093(5) exempts an owner licensed as a contractor. Failure to deliver the required notice bars the original contractor's lien for the covered residential contract under ORS 87.093(6). The separate notice of right to a lien under ORS 87.021 applies to the persons and work described there.

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

ORS 87.060(5) awards reasonable attorney fees to the party prevailing on lien validity and foreclosure issues in a suit to enforce a perfected lien. ORS 87.076(4)(b) sets additional demand and tender conditions for fees in a damages action under that subsection. Neither provision promises fees to the prevailing party in every action involving a release demand.

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