US Laws, Codes, Statutes & Cases

Chapter 701 — Construction Contractors and Contracts

 

2005 EDITION

 

 

CONSTRUCTION CONTRACTORS AND CONTRACTS

 

OCCUPATIONS AND PROFESSIONS

 

GENERAL PROVISIONS

 

701.002     Short title

 

701.005     Definitions

 

701.010     Exemptions from licensure; rules

 

701.013     Intent relating to certain business license requirements

 

701.015     Business license requirements in cities and metropolitan service districts; fees; application to landscape contractors; distribution of fees

 

701.020     Certain cities exempt from application of ORS 701.015

 

LICENSING

 

701.035     Applicant required to be independent contractor to be eligible for license; classes of licenses

 

701.055     License requirement; notice of change in licensed partners or corporate officers; building permits; information notice to property owners; evidence of activity; local fees; contractor duties; consumer information; estimates; rules

 

701.058     Licensed developers

 

701.060     Licensing in another category; fee

 

701.065     License required to obtain judicial or administrative remedy; exception

 

701.067     Suit for damages for misrepresentation

 

701.072     Training requirements for individuals and businesses; testing of business license applicant; exception; rules

 

701.075     License application; rules

 

701.077     Definition for ORS 701.078 and 701.102; rules

 

701.078     Responsible managing individual

 

701.080     Contractor to notify board of address change; effect of mail to last-known address

 

701.085     Bonding requirements; action against surety; rules

 

701.100     Sanction for failure to comply with certain laws

 

701.102     Sanction for past unresolved activity; probation

 

701.103     Continuation of board authority when change occurs in license status

 

701.105     Insurance required of licensed contractors; alternative form of security; rules

 

701.115     Term of license; fee; renewal; inactive status; license identification card

 

701.120     Specialized education programs; standards; specialized education notation in credentials; removal of notation; rules for use of credentials

 

701.125     Licensing fee; rules

 

701.130     Determination of licensing fee; rules

 

701.135     Grounds for discipline; rules; suspension or refusal of license without prior hearing; hearing; civil penalty; injunctions; restoration or reissuance of license

 

701.138     Sewer contractor requirements

 

CLAIMS

 

701.139     Disputes as claims against bond; resolution processes

 

701.140     Types of allowable claims; restriction on processing claim for recoupment of lien

 

701.143     Requirement for timely filing of claims; timelines

 

701.145     Residential structure claims; small commercial structure claims not resolved under ORS 701.146; large commercial structure small contract claims not resolved under ORS 701.146

 

701.146     Large commercial structure claims; small commercial structure claims not resolved under ORS 701.145; optional procedure for large commercial structure small contract claims not resolved under ORS 701.145; rules

 

701.147     Notice of intent to file claim; fees; rules

 

701.148     Binding arbitration requirement; applicability; rules for arbitration; avoidance of arbitration; rules limiting contested case availability; board refusal of dispute

 

701.149     Conducting arbitration and contested case hearings; court filings; rules

 

701.150     Order of board as judgment; priority of satisfying claims from bond or deposit

 

701.160     Nonlawyer may represent certain forms of businesses before board; rules for additional business forms

 

701.175     Contents of contract for work on residential structure

 

701.180     Waiver of mediation or arbitration

 

Note          Task Force on Construction Claims--2005 c.647 §§1,2

 

CONSTRUCTION CONTRACTORS BOARD

 

701.205     Construction Contractors Board; members; terms; confirmation; vacancies; qualifications

 

701.215     Officers; quorum; compensation and expenses; advisory committees

 

701.225     Investigatory powers of board; use of city or county inspectors; notice of noncompliance; conduct of hearings; authority of board to order work stopped

 

701.227     Disqualification from eligibility for certain public contracts; list of disqualified contractors

 

701.230     Board to provide names of unlicensed contractors to other state agencies

 

701.235     Rulemaking; rules to substitute letter of credit for bond

 

701.240     Provision of licensed contractors list to other state agencies; rules

 

701.250     Board to provide licensee’s status on request; fee

 

701.252     Board to maintain record of grievances against licensed contractors

 

701.255     Funds retained for collection of civil penalties

 

701.260     Appeal committee; membership; duties

 

701.295     Board duty to investigate and seek prosecution of illegal activity

 

HOME INSPECTORS

 

701.350     Home inspectors; certification; rules; fees; exemption

 

701.355     Home inspector undertaking of repair work on inspected structure

 

RETAINAGE

 

701.410     Definitions

 

701.420     Partial payment; retainage; effect; interest; notice of completion; payment by contractor and owner

 

701.430     Performance bond; terms; effect of not obtaining bond

 

701.435     Deposits in lieu of cash retainage

 

701.440     Applicability to federal projects

 

LEAD POISONING AND HAZARD REDUCTION

 

701.500     Legislative findings

 

701.505     Definitions for ORS 431.920 and 701.500 to 701.515

 

701.510     License required to engage in lead-based paint activity

 

701.515     Licensing and business registration system; fees; rules

 

ACCESSIBILITY FEATURES

 

701.525     Provision of accessible features list to purchaser; effect

 

701.530     Model list of accessibility features; rules

 

MERCURY THERMOSTATS

 

701.550     Notice of Department of Consumer and Business Services rules regarding thermostats containing mercury

 

NOTICES OF DEFECT IN RESIDENCE

 

701.560     Definitions for ORS 701.560 to 701.595 and 701.605

 

701.565     Notice of defect requirement; contents; mailing

 

701.570     Secondary notice of defect; inspection of residence; response to notice or secondary notice

 

701.575     Availability of residence; scope of inspection; report of inspection results

 

701.580     Offer by contractor, subcontractor or supplier; effect of accepting offer; nonperformance; compelling arbitration or commencing court action; admissibility of response or reply

 

701.585     Effect of notice of defect on time for commencing court action

 

701.590     Contractor delivery of notification of procedure

 

701.595     Failure to follow notice of defect procedure

 

701.600     Nonapplicability of ORS 701.560 to 701.595 and 701.605

 

WARRANTIES

 

701.605     Recording of written warranty agreement

 

CONSTRUCTION CONTRACT PAYMENTS

 

701.620     Definitions for ORS 701.620 to 701.640

 

701.625     Progress payments; alternative billing cycle; certification of billing or estimate; payment in full; prohibited agreements

 

701.630     Payments to subcontractors and material suppliers; failure to pay; omission of payment; board discipline

 

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

 

PENALTIES

 

701.990     Criminal penalties

 

701.992     Civil penalties and other sanctions; enforcement

 

GENERAL PROVISIONS

 

      701.002 Short title. Chapter 928, Oregon Laws 1989, shall be known as the Construction Contractors Licensing Act. [Formerly 701.900]

 

      Note: Legislative Counsel has substituted “chapter 928, Oregon Laws 1989,” for the words “this Act” in section 31, chapter 928, Oregon Laws 1989, compiled as 701.900 and renumbered 701.002 in 2001. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 1989 Comparative Section Table located in Volume 20 of ORS.

 

      701.005 Definitions. As used in this chapter:

      (1) “Board” means the Construction Contractors Board.

      (2) “Construction debt” means an amount owed under:

      (a) A final order or arbitration award issued by the board; or

      (b) A judgment or civil penalty arising from construction activities within the United States.

      (3) “Contractor” means a person who, for compensation or with the intent to sell, arranges or undertakes or offers to undertake or submits a bid to construct, alter, repair, add to, subtract from, improve, inspect, move, wreck or demolish, for another, any building, highway, road, railroad, excavation or other structure, project, development or improvement attached to real estate or to do any part thereof. “Contractor” includes general contractors, residential-only contractors and specialty contractors as defined in this section.

      (4) “General contractor” means a contractor whose business operations require the use of more than two unrelated building trades or crafts that the contractor supervises or performs in whole or part, whenever the sum of all contracts on any single property, including materials and labor, exceeds an amount established by rule by the board. “General contractor” does not include specialty contractors or limited contractors, as described in ORS 701.085.

      (5) “Home inspector” means a person who, for a fee, inspects and provides written reports on the overall physical condition of a residential structure and the appurtenances thereto. “Home inspector” does not include persons certified under ORS chapter 455 to inspect new, repaired or altered structures for compliance with the state building code.

      (6) “Inspector” means a contractor registered with the board who inspects or otherwise provides services to a property owner or other contractor but does not substantively add to or subtract from a structure. “Inspector” includes but is not limited to a home inspector certified under ORS 701.350, a lead-based paint inspector licensed under ORS 701.515 and a cross connection inspector and backflow assembly tester certified under ORS 448.279. “Inspector” does not include city or county inspectors acting under ORS 701.225 or an inspector as defined in ORS 455.715.

      (7) “Large commercial structure” means a structure that is not a residential structure or small commercial structure.

      (8) “Licensed developer” means a contractor who owns property or an interest in property and arranges for construction work, if the contractor:

      (a) Engages in the business of arranging for construction work and performing other activities associated with the improvement of real property, with the intent to sell the property;

      (b) Acts in association with one or more licensed general contractors and the general contractor or combination of general contractors have sole responsibility for overseeing all phases of construction activity on the property; and

      (c) Does not perform any construction work on the property.

      (9) “Officer” means any of the following persons:

      (a) A president, vice president, secretary, treasurer or director of a corporation.

      (b) A general partner in a limited partnership.

      (c) A manager in a manager-managed limited liability company.

      (d) A member of a member-managed limited liability company.

      (e) A trustee.

      (f) A person defined as an officer under board rules. The definition of officer adopted by board rule may include persons not listed in this subsection who may exercise substantial control over a business.

      (10) “Residential-only contractor” means a general contractor or specialty contractor who performs work exclusively in connection with residential structures and small commercial structures, and the appurtenances thereto. “Residential-only contractor” includes, but is not limited to:

      (a) A person who purchases or owns property and constructs or for compensation arranges for the construction of one or more residential structures or small commercial structures with the intent of selling the structures;

      (b) A school district, as defined in ORS 332.002, that permits students to construct a residential structure or small commercial structure as an educational experience to learn building techniques and sells the completed structure;

      (c) A community college district, as defined in ORS 341.005, that permits students to construct a residential structure or small commercial structure as an educational experience to learn building techniques and sells the completed structure; or

      (d) Any person except a landscape contractor, nurseryman, gardener or person engaged in the commercial harvest of forest products who is engaged as an independent contractor to remove trees, prune trees, remove tree limbs or stumps or to engage in tree or limb guying.

      (11) “Residential structure” means a residence, including a site-built home, modular home constructed off-site, floating home as defined in ORS 830.700, condominium unit, manufactured dwelling or duplex, or a multiunit residential building consisting of four units or less that is not part of a multistructure complex of buildings.

      (12) “Small commercial structure” means a nonresidential structure that has a ground area of 4,000 square feet or less, including exterior walls, and a height of not more than 20 feet from the top surface of the lowest flooring to the highest interior overhead finish of the structure.

      (13) “Specialty contractor” means a contractor who performs work on a structure, project, development or improvement and whose operations as such do not fall within the definition of “general contractor.” “Specialty contractor” includes a person who performs work regulated under ORS chapter 446. [1971 c.740 §1; 1975 c.721 §1; 1977 c.537 §2; 1981 c.618 §8; 1983 c.616 §4; 1989 c.762 §7; 1989 c.928 §1; 1991 c.181 §1; 1993 c.18 §151; 1997 c.814 §1; 1999 c.325 §1; 2001 c.196 §2; 2001 c.197 §9; 2003 c.14 §440; 2003 c.675 §69; 2005 c.432 §6; 2005 c.609 §21]

 

      701.007 [1989 c.928 §3; repealed by 1991 c.79 §3]

 

      701.010 Exemptions from licensure; rules. The Construction Contractors Board may adopt rules to make licensure optional for persons who offer, bid or undertake to perform work peripheral to construction, as defined by administrative rule of the board. The following persons are exempt from licensure under this chapter:

      (1) A person who is constructing, altering, improving or repairing personal property.

      (2) A person who is constructing, altering, improving or repairing a structure located within the boundaries of any site or reservation under the jurisdiction of the federal government.

      (3) A person who furnishes materials, supplies, equipment or finished product and does not fabricate them into, or consume them, in the performance of the work of a contractor.

      (4) A person working on one structure or project, under one or more contracts, when the aggregate price of all of that person’s contracts for labor, materials and all other items is less than $500 and such work is of a casual, minor or inconsequential nature. This subsection does not apply to a person who advertises or puts out any sign or card or other device that might indicate to the public that the person is a contractor.

      (5) An owner who contracts for work to be performed by a licensed contractor. This subsection does not apply to a person who, in the pursuit of an independent business, constructs, remodels, repairs or for compensation and with the intent to sell the structure, arranges to have constructed, remodeled or repaired a structure with the intent of offering the structure for sale before, upon or after completion. It is prima facie evidence that there was an intent of offering the structure for sale if the person who constructed, remodeled or repaired the structure or arranged to have the structure constructed, remodeled or repaired does not occupy the structure after its completion.

      (6) A person performing work on a property that person owns or performing work as the owner’s employee, whether the property is occupied by the owner or not, or a person performing work on that person’s residence, whether or not that person owns the residence. This subsection does not apply to a person performing work on a structure owned by that person or the owner’s employee if the work is performed, in the pursuit of an independent business, with the intent of offering the structure for sale before, upon or after completion.

      (7) A person licensed in one of the following trades or professions when operating within the scope of that license:

      (a) An architect licensed by the State Board of Architect Examiners.

      (b) A registered professional engineer licensed by the State Board of Examiners for Engineering and Land Surveying.

      (c) A water well contractor licensed by the Water Resources Department.

      (d) A sewage disposal system installer licensed by the Department of Environmental Quality.

      (e) A landscaping business licensed under ORS 671.510 to 671.710 that constructs fences, decks, arbors, patios, landscape edging, driveways, walkways or retaining walls and that meets the applicable bonding requirements under ORS 671.690.

      (f) A pesticide operator licensed under ORS 634.116 who does not conduct inspections for wood destroying organisms for the transfer of real estate.

      (g) An appraiser certified or licensed under ORS chapter 674 or an appraiser assistant registered under ORS chapter 674 by the Appraiser Certification and Licensure Board.

      (8) A person who performs work subject to this chapter as an employee of a contractor.

      (9) A manufacturer of a manufactured home constructed under standards established by the federal government.

      (10) A person involved in the movement of:

      (a) Modular buildings or structures other than manufactured structures not in excess of 14 feet in width.

      (b) Structures not in excess of 16 feet in width when the structures are being moved by their owner if the owner is not a contractor required to be licensed under this chapter.

      (11) A commercial lending institution or surety company that arranges for the completion, repair or remodeling of a structure. As used in this subsection, “commercial lending institution” means any bank, mortgage banking company, trust company, savings bank, savings and loan association, credit union, national banking association, federal savings and loan association, insurance company or federal credit union maintaining an office in this state.

      (12) A real estate licensee as defined in ORS 696.010 or the employee of that licensee when performing work on a structure that the real estate licensee manages under a contract.

      (13) Units of government other than those specified in ORS 701.005 (10)(b) and (c).

      (14) A qualified intermediary in a property exchange that qualifies under section 1031 of the Internal Revenue Code as amended and in effect on January 1, 2004, if the qualified intermediary is not performing construction activities.

      (15) A business that supplies personnel to a licensed contractor for the performance of work under the direction and supervision of the contractor. [1971 c.740 §20; 1979 c.312 §1; 1981 c.618 §9; 1983 c.616 §5a; 1989 c.928 §2; 1991 c.181 §2; 1991 c.463 §1; 1993 c.18 §152; 1995 c.644 §1; 1997 c.814 §8; 1999 c.32 §4; 1999 c.325 §5; 1999 c.402 §12; 2001 c.196 §3; 2001 c.197 §10; 2003 c.285 §1; 2003 c.329 §1; 2003 c.675 §70; 2005 c.254 §12; 2005 c.432 §7; 2005 c.609 §22]

 

      701.013 Intent relating to certain business license requirements. It is the intent of the Legislative Assembly to reduce the number of city business licenses that construction contractors and landscape contractors are required to obtain in order to conduct business in the Portland metropolitan area. It is the purpose of this section and ORS 701.015 to enable construction contractors and landscape contractors to secure from the metropolitan service district one business license that will permit the conduct of business by such contractors in cities in which the contractors perform a limited amount of work and in which they do not have a principal place of business. Furthermore, it is also the intent of the Legislative Assembly that this section and ORS 701.015 apply only to contractors engaged in the building trades and crafts and to landscape contractors without regard to any subsequent expansion of the jurisdiction of the Construction Contractors Board or State Landscape Contractors Board over other trades and crafts. It is declared to be the policy of this state that, to the maximum extent possible consistent with the requirements of this section and ORS 701.015, the cities within the boundaries of the metropolitan service district be allowed to control the imposition of business license taxes and to maintain the level of revenues obtained from those taxes. The amount and trends of revenue produced or distributed to each city is intended to reflect the construction business activity within the participating cities. [1991 c.79 §1; 2001 c.409 §10]

 

      Note: 701.013 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 701 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

 

      701.015 Business license requirements in cities and metropolitan service districts; fees; application to landscape contractors; distribution of fees. (1) A contractor or landscape contractor shall pay directly to any city within the boundaries of a metropolitan service district any business license tax imposed by the city when:

      (a) The principal place of business of the contractor or the landscape contractor is within the city; or

      (b) The principal place of business of the contractor or the landscape contractor is not within the city but the contractor or landscape contractor derives gross receipts of $250,000 or more from business conducted within the boundaries of the city during the calendar year for which the business license tax is owed.

      (2) A contractor or landscape contractor who conducts business during any year in any city within the boundaries of the metropolitan service district other than a city to which the contractor or landscape contractor has paid a business license tax for that year may apply for a business license from the metropolitan service district.

      (3) When a contractor or landscape contractor obtains a business license from the metropolitan service district under subsection (2) of this section, if a city within the boundaries of the metropolitan service district other than a city to which the contractor or landscape contractor is required to directly pay a business license tax under subsection (1) of this section demands payment of a business license tax by the contractor or landscape contractor, the city shall waive such payment upon presentation of proof by the contractor or landscape contractor that the contractor or landscape contractor has a business license issued by the metropolitan service district. Possession by the contractor or landscape contractor of a current business license issued by the metropolitan service district under subsection (2) of this section shall be proof sufficient to obtain the waiver described in this subsection.

      (4) The metropolitan service district shall issue a business license to a contractor or landscape contractor when:

      (a) The contractor or landscape contractor presents proof to the district that the contractor or landscape contractor has paid the business license tax imposed by each city within the boundaries of the district to which the contractor or landscape contractor must directly pay a business license tax under subsection (1) of this section; and

      (b) The contractor or landscape contractor pays a license fee to the district. The license fee charged under this paragraph shall be twice the average business license tax charged contractors by cities located within the metropolitan service district plus an amount that is sufficient to reimburse the district for the administrative expenses of the district incurred in carrying out its duties under this section.

      (5) The metropolitan service district shall distribute the business license fees collected by the district under this section, less administrative expenses, to the cities that are located wholly or partly within the district and that collect a business license tax. In any year, each such city shall receive such share of the license fees as the number of residential building permits that it issued during that year bears to the total number of residential building permits that were issued during that year by all of the cities located wholly or partly within the district. Distribution of moneys under this subsection shall be made at least once in each year. The metropolitan service district shall determine the number of residential building permits issued by cities within the district from statistics and other data published by the State Housing Council.

      (6) As used in this section:

      (a) “Business license tax” means any fee paid by a person to a city or county for any form of license that is required by the city or county in order to conduct business in that city or county. The term does not include any franchise fee or privilege tax imposed by a city upon a public utility under ORS 221.420 or 221.450 or any provision of a city charter.

      (b) “Conducting business” means to engage in any activity in pursuit of gain including activities carried on by a person through officers, agents and employees as well as activities carried on by a person on that person’s own behalf.

      (c) “Landscape contractor” means a person or business who is licensed under ORS 671.510 to 671.710 as a landscape contractor.

      (d) “Principal place of business” means the location in this state of the central administrative office of a person conducting business in this state. [1987 c.581 §2; 1989 c.1064 §§1,2; 1991 c.79 §2; 1999 c.176 §1]

 

      701.020 Certain cities exempt from application of ORS 701.015. (1) A city that imposes a business license tax based on or measured by adjusted net income earned by conducting business within the city shall be exempt from ORS 701.015.

      (2) As used in this section, “business license tax” has the meaning given that term in ORS 701.015. [1987 c.581 §7]

 

      Note: 701.020 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 701 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

 

      701.025 [1989 c.762 §1; 1989 c.870 §§3,3a; renumbered 670.600 in 1991]

 

      701.030 [1989 c.762 §1a; renumbered 670.605 in 1991]

 

LICENSING

 

      701.035 Applicant required to be independent contractor to be eligible for license; classes of licenses. (1) An applicant must qualify as an independent contractor under ORS 670.600 to be eligible for a license with the Construction Contractors Board.

      (2) The board shall establish two classes of independent contractor licenses:

      (a) The nonexempt class is composed of the following entities:

      (A) Sole proprietorships, partnerships, corporations, limited liability companies with one or more employees; and

      (B) Partnerships, corporations and limited liability companies with more than two partners, corporate officers or members, if any of the partners, corporate officers or members are not part of the same family and related as parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren.

      (b) The exempt class is composed of all sole proprietorships, partnerships, corporations and limited liability companies that do not qualify as nonexempt. All partnerships, corporations and limited liability companies must have an identification number issued for federal tax purposes.

      (3) If a person who qualifies for a license under subsection (2)(b) of this section hires one or more employees or falls into any of the categories set out in subsection (2)(a)(B) of this section, the person is subject to penalties under ORS 701.992 for improper licensing. The person must reapply to the board in the correct class.

      (4) The decision of the board that a person is an independent contractor applies only when the person is performing work of the nature described in ORS 701.055 and 701.060. [1989 c.870 §4; 1995 c.216 §1; 1999 c.402 §13]

 

      701.055 License requirement; notice of change in licensed partners or corporate officers; building permits; information notice to property owners; evidence of activity; local fees; contractor duties; consumer information; estimates; rules. (1) A person may not undertake, offer to undertake or submit a bid to do work as a contractor unless that person has a current, valid license issued by the Construction Contractors Board. A partnership, corporation or joint venture may not undertake, offer to undertake or submit a bid to do work as a contractor unless that partnership, corporation or joint venture is licensed under this chapter. A partnership or joint venture is licensed for the purpose of offering to undertake work as a contractor on a structure if any of the partners or joint venturers whose name appears in the business name of the partnership or joint venture is licensed under this chapter.

      (2) A licensed partnership or corporation shall notify the board immediately upon any change in licensed partners or corporate officers. If a partnership no longer has a licensed partner, the partnership may not conduct activities that require a license under this chapter.

      (3) A city, county or the State of Oregon may not issue a building permit to any person required to be licensed under this chapter that does not have a current, valid license. A county, city or state agency that requires the issuance of a permit as a condition precedent to construction, alteration, improvement, demolition, movement or repair of any building or structure or the appurtenances to the structure shall, as a condition for issuing the permit, require that the applicant for a permit file a written statement, subscribed by the applicant. The statement must affirm that the applicant is licensed under this chapter, give the license number and state that the license is in full force and effect, or, if the applicant is exempt from licensing under this chapter, list the basis for the exemption. The city, county or state agency shall list the contractor’s license number on the permit obtained by that contractor.

      (4) If the applicant for a building permit is exempt from licensure under ORS 701.010 (6), the city, county or state shall supply the applicant with an Information Notice to Property Owners About Construction Responsibilities. The city, county or state may not issue a building permit for a residential structure to the applicant until the applicant signs a statement in substantially the following form:

______________________________________________________________________________

      (a) I have read and understand the Information Notice to Property Owners About Construction Responsibilities; and

      (b) I own, reside in or will reside in the completed dwelling. My general contractor is_________, Construction Contractors Board license no.______, license expiration date________. I will instruct my general contractor that all subcontractors who work on this dwelling must be licensed with the Construction Contractors Board; or

      (c) I am performing work on property I own, a residence that I reside in or a residence that I will reside in.

      (d) I will be my own general contractor and, if I hire subcontractors, I will hire only subcontractors licensed with the Construction Contractors Board.

      (e) If I change my mind and do hire a general contractor, I will contract with a general contractor who is licensed with the Construction Contractors Board and I will immediately notify the office issuing this building permit of the name of the general contractor_________.

______________________________________________________________________________

      (5) The board shall adopt by rule a form entitled “Information Notice to Property Owners About Construction Responsibilities” that shall describe, in nontechnical language and in a clear and coherent manner using words in their common and everyday meaning, the responsibilities property owners are undertaking by acting as their own general contractor and the problems that could develop. The responsibilities described in the form shall include, but not be limited to:

      (a) Compliance with state and federal laws regarding Social Security tax, income tax and unemployment tax.

      (b) Workers’ compensation insurance on workers.

      (c) Liability and property damage insurance.

      (6) The board shall develop and furnish to city, county and state building permit offices, at no cost to the offices, the Information Notice to Property Owners About Construction Responsibilities and the statement to be signed by the permit applicant.

      (7) A city or county that requires a business license for engaging in a business subject to regulation under this chapter shall require that the licensee or applicant for issuance or renewal of the business license file, or have on file, with the city or county, a signed statement that the licensee or applicant is licensed under this chapter.

      (8) It is prima facie evidence of doing business as a contractor if a person for that person’s own use performs, employs others to perform, or for compensation and with the intent to sell the structure, arranges to have performed any work described in ORS 701.005 (3) if within any 36-month period that person offers for sale two or more newly built structures on which that work was performed.

      (9) Licensure under this chapter is prima facie evidence that the licensee conducts a separate, independent business.

      (10) The provisions of this chapter are exclusive and a city, county or other political subdivision may not require or issue any registrations, licenses or surety bonds, nor charge any fee for the regulatory or surety registration of any contractor licensed with the board. This subsection does not limit or abridge the authority of any city or county to:

      (a) License and levy and collect a general and nondiscriminatory license fee levied upon all businesses or upon business conducted by any firm within the city or county;

      (b) Require a contractor to pay a fee, post a bond or require insurance when the city, county or political subdivision is contracting for the service of the contractor; or

      (c) Regulate a contractor that is not required to be licensed under this chapter.

      (11)(a) A contractor shall maintain a list that includes the following information about all subcontractors or other contractors performing work on a project for that contractor:

      (A) Names and addresses.

      (B) License numbers.

      (b) The contractor must deliver the list referred to in paragraph (a) of this subsection to the board within 72 hours after a board request made during reasonable working hours.

      (12) A contractor may not hire any subcontractor or other contractor to perform work unless the subcontractor or contractor is licensed under this chapter or exempt from licensure under ORS 701.010.

      (13) A consumer notification form designed to specifically inform a property owner what the property owner should do to protect themselves in a residential repair, remodel or construction project shall be prepared by the board and provided at no cost to all licensed contractors. The contractor shall deliver the form to the property owner when the contractor submits a bid or proposal for work on a residential structure. The form shall include an explanation of the meaning of licensure, including a statement that licensure is not an endorsement of a contractor’s work, and an explanation of the bond and insurance levels required of contractors for the benefit of property owners. The form must not be larger than one side of a sheet of paper that is 8-1/2 inches by 11 inches. The contractor may reproduce the form on the contractor’s bid proposal.

      (14) A contractor may not perform work subject to this section for an owner of a residential structure without a written contract if the aggregate contract price exceeds $2,000. If the price of a contract was initially less than $2,000, but during the course of performance the contract exceeds that amount, the contractor shall mail or otherwise deliver a written contract to the owner not later than five days after the contractor knows or should reasonably know that the contract price will exceed $2,000. Failure to have a written contract will not void the contract.

      (15) Except as provided in ORS 671.540, a contractor that is not licensed under ORS 671.560 shall hire a person licensed under ORS 671.560 to perform landscaping work. [1971 c.740 §7; 1975 c.721 §2; 1981 c.618 §10; 1983 c.616 §6; 1989 c.430 §6; 1989 c.624 §1; 1989 c.928 §4; 1995 c.771 §1; 1997 c.785 §3; 1999 c.35 §1; 1999 c.325 §2; 1999 c.402 §14; 2001 c.196 §4; 2001 c.197 §11; 2005 c.249 §1; 2005 c.432 §8]

 

      701.058 Licensed developers. The Construction Contractors Board shall develop a separate class of contractor license for contractors who are licensed developers. [2003 c.675 §68]

 

      701.060 Licensing in another category; fee. (1) Any contractor licensed under this chapter may at any time apply for a license in another category. The Construction Contractors Board may charge a transfer fee not to exceed $20 for each additional license.

      (2) If a contractor applies for a license pursuant to subsection (1) of this section all construction, alteration, improvement, moving over public highways, roads or streets, demolition or repair performed by that contractor on buildings of all types shall be subject to the provisions of this chapter and to regulation by the board. Such licensure shall be exclusive as provided in ORS 701.055 (10). [1977 c.426 §2; 1981 c.618 §11; 1983 c.616 §7; 1989 c.430 §2; 1989 c.928 §5; 1999 c.402 §15]

 

      701.065 License required to obtain judicial or administrative remedy; exception. (1) Except as provided in subsection (2) of this section, a contractor may not perfect a claim of a construction lien, or commence a claim with the Construction Contractors Board, in arbitration or in any court of this state for compensation for the performance of any work or for the breach of any contract for work that is subject to this chapter, unless the contractor had a valid license issued by the board:

      (a) At the time the contractor bid or entered into the contract for performance of the work; and

      (b) Continuously while performing the work for which compensation is sought.

      (2) The board, arbitrator or court shall not apply the provisions of subsection (1) of this section to a lien or claim if the board, arbitrator or court determines that:

      (a) The contractor either did not have a valid license at any time required under subsection (1) of this section, or had an initial issuance thereof, and:

      (A) The contractor was not aware of the requirement that the contractor be licensed, and the contractor submitted a completed application for a license within a number of days established by the board, but not more than 90 days, of the date the contractor became aware of the requirement;

      (B) At the time the contractor perfected a claim of a construction lien or commenced any other claim subject to the provisions of subsection (1) of this section, the contractor was licensed by the board; and

      (C) Enforcement of the provisions of subsection (1) of this section would result in substantial injustice to the contractor;

      (b) The contractor was licensed by the board for some but not all of the times required under subsection (1) of this section and had a lapse in such license and:

      (A) The contractor was not aware of the lapse in the license for more than a number of days established by the board, but not to exceed 90 days, before submitting a completed application for license renewal with the board;

      (B) Except for perfection of a claim of a construction lien and a suit to foreclose the lien, at the time the contractor commenced any other claim subject to the provisions of subsection (1) of this section the contractor’s license was renewed under ORS 701.115 to include the entire time period for which a license was required under subsection (1) of this section; and

      (C) For perfection of a claim of a construction lien and a suit to foreclose the lien, the contractor’s license was renewed under ORS 701.115 for the entire time period for which a license was required under subsection (1) of this section, but not later than 90 days following perfection of the lien;

      (c)(A) The contractor is a licensed developer and did not have a valid license during all or part of the period described in subsection (1) of this section;

      (B) The licensed developer was unaware of the license requirement and obtained a license within a time established by the board, not to exceed 90 days after the licensed developer learned of the requirement;

      (C) The licensed developer was licensed at the time the licensed developer perfected the lien or commenced the claim; and

      (D) Enforcement of subsection (1) of this section would result in substantial injustice to the licensed developer; or

      (d) The claim:

      (A) Is directed against a person or entity that:

      (i) Is subject to this chapter or ORS chapter 671 or 672;

      (ii) Provides construction or design labor or services of any kind; or

      (iii) Manufactures, distributes, rents or otherwise provides materials, supplies, equipment, systems or products; and

      (B) Arises out of defects, deficiencies or inadequate performance in the construction, design, labor, services, materials, supplies, equipment, systems or products provided.

      (3) If a contractor falsely swears to information provided under ORS 701.075 or knowingly violates the provisions of ORS 656.029, 670.600 or 701.075, the contractor may not perfect a claim of a construction lien, or commence a claim with the board, in arbitration or in any court of this state for compensation for the performance of any work on a residential structure or for the breach of any contract for work on a residential structure that is subject to this chapter. [1971 c.740 §8; 1973 c.832 §55; 1975 c.654 §1; 1979 c.874 §1; 1983 c.616 §8; 1989 c.870 §§10,10a; 1989 c.928 §6; 1997 c.818 §3; 1999 c.402 §16; 2003 c.675 §71]

 

      Note: Section 72, chapter 675, Oregon Laws 2003, provides:

      Sec. 72. Notwithstanding ORS 701.065, a contractor is not barred from commencing a claim described in ORS 701.065 (2)(d) with the Construction Contractors Board, in arbitration or in a court, for construction work performed in whole or in part prior to April 1, 2004, if the contractor obtains a license as a licensed developer prior to April 1, 2004, and at the time of the work the contractor:

      (1) Owns the property or an interest in the property associated with the construction work;

      (2) Arranges for the construction work;

      (3) Is engaged in the business of arranging for construction work and performing other activities associated with the improvement of real property, with the intent to sell the property;

      (4) Acts in association with one or more licensed general contractors and the general contractor or combination of general contractors have sole responsibility for overseeing all phases of construction activity on the property; and

      (5) Does not perform any construction work on the property. [2003 c.675 §72]

 

      701.067 Suit for damages for misrepresentation. If any person suffered costs or damages as a result of an individual providing a false or invalid Construction Contractors Board number or otherwise misleading a person with respect to licensure with the board, that person may bring suit in a court of competent jurisdiction to recover damages. The court may award reasonable attorney fees to the prevailing party in an action under this section. [1989 c.870 §9; 1995 c.618 §124; 1999 c.402 §17]

 

      Note: 701.067 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 701 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

 

      701.070 [1975 c.383 §§2,3; repealed by 1983 c.616 §17]

 

      701.072 Training requirements for individuals and businesses; testing of business license applicant; exception; rules. (1) The Construction Contractors Board, by rule, shall impose training requirements for individuals and businesses seeking to be licensed under this chapter. The training required by the board must relate to business practices and laws affecting construction contractors. The board shall adopt standards for programs that provide training that meets the requirements of this subsection.

      (2) In establishing training requirements under subsection (1) of this section, the board shall take into consideration the availability of training programs within the state and shall encourage training providers to use the most up-to-date technology. The board shall recognize and grant credit for training provided by private organizations if the training program meets the standards established by the board under subsection (1) of this section. The board periodically shall review the qualifications of private organizations and instructors to determine compliance with the program standards. The board shall develop and make available to the public a list of public and private programs that provide training that meets the training requirements established by the board under subsection (1) of this section.

      (3) The board, by rule, shall approve a test for applicants for licensing under ORS 701.075. The test shall measure the applicant’s knowledge regarding business practices and laws that are the subject of the training required under subsection (1) of this section.

      (4) Subsections (1) and (3) of this section do not apply to an applicant for licensing as a licensed developer. [2005 c.432 §2]

 

      701.075 License application; rules. (1) An applicant for a construction contractor license must submit the application on a form prescribed by the Construction Contractors Board. The application shall include, but not be limited to, the following information regarding the applicant:

      (a) Classification of the license being sought.

      (b) A list of construction debts involving the applicant, or an owner or officer of the applicant, if the order, award, penalty or judgment that establishes the debt was issued within the preceding five years.

      (c) Social Security number.

      (d) Workers’ compensation insurance account number, if the applicant is required to have workers’ compensation insurance.

      (e) Unemployment insurance account number, if the applicant is required to have unemployment insurance.

      (f) State withholding tax account number, if the applicant is required to withhold state income tax.

      (g) Federal employer identification number, if the applicant is required to have a federal employer identification number.

      (h) The name and address of:

      (A) Each partner, if the applicant is a partnership, limited liability partnership or foreign limited liability partnership.

      (B) The general partner, if the applicant is a limited partnership.

      (C) Each joint venturer, if the applicant is a joint venture.

      (D) The owner, if the applicant is a sole proprietorship.

      (E) The officers, if the applicant is a corporation.

      (F) The manager and each member, if the applicant is a manager-managed limited liability company.

      (G) Each member, if the applicant is a member-managed limited liability company.

      (i) The name and address of the following if the applicant is a partnership, limited liability partnership, foreign limited liability partnership, joint venture, manager-managed limited liability company or member-managed limited liability company:

      (A) Each partner in a partnership, limited liability partnership or foreign limited liability partnership that is a partner, joint venturer or member of the applicant.

      (B) Each general partner in a limited partnership that is a partner, joint venturer or member of the applicant.

      (C) Each joint venturer in a joint venture that is a partner, joint venturer or member of the applicant.

      (D) The manager and each member of a manager-managed limited liability company that is a partner, joint venturer or member of the applicant.

      (E) Each member of a member-managed limited liability company that is a partner, joint venturer or member of the applicant.

      (F) Each officer of a corporation that is a partner, joint venturer or member of the applicant.

      (G) The general partner in a limited partnership that is a partner, joint venturer or member of the applicant.

      (H) Each individual who has a controlling ownership interest in, or management authority over, the applicant and who meets criteria adopted by the board by rule.

      (j) The basis on which the applicant meets the standards for independent contractor status under ORS 670.600.

      (2) The application described in subsection (1) of this section must be accompanied by proof satisfactory to the board that the applicant:

      (a) Is in compliance with ORS 701.078.

      (b) Has the legal capacity to enter into contracts.

      (3) Subsection (2)(a) of this section does not apply to a licensed developer.

      (4) An applicant shall conform to the information provided by the applicant on the application and to the terms of the application. [1971 c.740 §9; 1973 c.832 §56; 1979 c.312 §2; 1981 c.618 §12; 1989 c.624 §2; 1989 c.870 §2; 1989 c.928 §7; 1995 c.216 §6; 1999 c.344 §1; 1999 c.402 §18a; 2001 c.160 §2; 2001 c.196 §5; 2003 c.675 §73; 2005 c.432 §9]

 

      701.077 Definition for ORS 701.078 and 701.102; rules. (1) As used in ORS 701.078 and 701.102, “owner” means:

      (a) A sole proprietor of, partner in or holder of a controlling interest in a business; or

      (b) A person defined as an owner by Construction Contractors Board rule.

      (2) The board shall adopt rules defining an owner for purposes of subsection (1) of this section. The rules may not define an owner in a manner that includes an investor who has no right to manage a business, including but not limited to:

      (a) A person who is solely a minority shareholder in a corporation;

      (b) A member of a manager-managed limited liability company; or

      (c) A limited partner in a limited partnership who does not participate in the control of the business of the limited partnership. [2005 c.432 §4]

 

      701.078 Responsible managing individual. (1) As used in this section, “responsible managing individual” means an individual who:

      (a)(A) Is an owner; or

      (B) Is an employee of a business, designated by the owner, who exercises management or supervisory authority over the construction activities of the business; and

      (b)(A) Has successfully completed the training and testing required for licensing under ORS 701.072 within a period identified by the Construction Contractors Board by rule;

      (B) Has demonstrated experience required by the board by rule; or

      (C) Has complied with the licensing requirements of ORS 446.395.

      (2) A business licensed under this chapter must at all times have at least one responsible managing individual.

      (3) Subsection (2) of this section does not apply to a licensed developer. [2005 c.432 §3]

 

      701.080 Contractor to notify board of address change; effect of mail to last-known address. A contractor shall notify the Construction Contractors Board of any change of address while licensed and for one year following the date the contractor’s license expires or otherwise becomes inactive. The contractor shall so notify the board within 10 days of the date upon which the change of address occurs. Initial notice of a contested case or arbitration directed by the board to the last-known address of record shall be considered delivered when deposited in the United States mail and sent registered or certified or post office receipt secured. Any other communication directed by the board to the last-known address of record shall be considered delivered when deposited in the United States mail, regular mail. [1979 c.312 §5; 1983 c.616 §9; 1989 c.928 §8; 1997 c.301 §1; 1999 c.402 §20]

 

      701.085 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 subsections (2) to (5) of this section. The surety bond must provide that the applicant, with regard to work subject to this chapter, will pay claims ordered paid by the board under ORS 701.145 or 701.146. Bonds filed under this subsection shall remain in effect for at least one year or until depleted by claims paid under ORS 701.150, 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 (6) of this section, the aggregate liability of the surety under the bond for claims against the bond may not exceed the penal sum of the bond no matter how many years the bond is in force. Except as provided in subsection (6) of this section, an extension by continuation certificate, reinstatement, reissue or renewal of the bond may not increase the liability of the surety.

      (2) A general contractor or licensed developer shall obtain a surety bond in the amount of $15,000.

      (3) A specialty contractor shall obtain a surety bond in the amount of $10,000.

      (4) An inspector shall obtain a surety bond in the amount of $10,000.

      (5) The board may reduce the amount of the surety bond required by this section to $5,000 for a contractor upon a showing that the contractor does not perform work as a contractor exceeding $40,000 in gross annual volume and does not enter into contracts that exceed $5,000. The board shall designate the contractor as a limited contractor.

      (6) The board, by rule, may require a licensee to obtain a new surety bond if, pursuant to a board order for payment of a claim described in ORS 701.140, the surety pays a claim out of the bond of the licensee. The new surety bond must be in the amount set forth in subsections (2) to (5) of this section unless a higher amount is required by a board condition or rule described in subsection (7) or (8) 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 claim.

      (7) If the amount the licensee must pay against the bond under 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 this section.

      (8) 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 this section. 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.

      (9) The bond required under this section is for the exclusive purpose of payment of final orders and arbitration awards of the board in accordance with this chapter.

      (10) Upon determination under ORS 701.145 or 701.146 of a claim against a contractor who holds a bond required under this section, the board shall notify the surety on the bond of the final order in a manner determined by the board by rule. The notification shall include a list of all claims upon which a final order has been issued.

      (11) A suit or 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 that payment is due on the claim.

      (12) In any action against a surety on a bond under this section that is based on the failure of the surety to pay a claim or on the denial of a claim by the surety, the court may award:

      (a) Costs;

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

      (c) Twice the amount of any damages that the board ordered the surety to pay on the claim, if the surety arbitrarily and capriciously refused to pay upon order of the board. [1971 c.740 §10; 1975 c.383 §4; 1975 c.721 §3; 1979 c.874 §2; 1981 c.618 §1; 1983 c.616 §10; 1989 c.430 §3; 1989 c.624 §3; 1989 c.928 §10; 1991 c.181 §4; 1995 c.771 §2; 1997 c.301 §2; 1999 c.325 §3; 1999 c.344 §2; 1999 c.402 §21a; 2001 c.157 §1; 2001 c.196 §6; 2001 c.197 §12; 2003 c.675 §74]

 

      701.095 [1971 c.740 §11; 1975 c.721 §4; 1981 c.618 §5; repealed by 1987 c.414 §172]

 

      701.100 Sanction for failure to comply with certain laws. (1) The failure of a contractor to comply with the provisions of this section and ORS 87.007 (2), 656.021, 657.665, 670.600, 701.035, 701.065, 701.067, 701.075, 701.135, 701.240 and 701.250 or to be in conformance with the provisions of ORS chapter 316, 656 or 657 or ORS chapter 455 and the rules adopted thereunder is a basis for suspension of the contractor’s license, revocation of the contractor’s license, refusal to issue or reissue a contractor’s license, assessment of a civil penalty as set forth in ORS 701.992 or a combination of these sanctions.

      (2) Any action against a contractor under this section shall be conducted in conformance with the provisions of ORS 183.413 to 183.497. [1989 c.870 §5; 1991 c.67 §185; 1991 c.181 §5; 1995 c.771 §8; 1999 c.344 §3; 1999 c.402 §22; 2001 c.850 §5; 2001 c.924 §24; 2003 c.778 §3]

 

      701.102 Sanction for past unresolved activity; probation. (1) As used in this section, “construction contractor license” means a license issued within the United States to engage in the business of construction contracting.

      (2) The Construction Contractors Board may suspend or refuse to issue a license required under this chapter to a business if:

      (a) The business owes a construction debt or has had a construction contractor license revoked or suspended;

      (b) An owner or officer of the business owes a construction debt or has had a construction contractor license revoked or suspended; or

      (c) An owner or officer of the business was an owner or officer of another business at the time the other business incurred a construction debt that is owing or at the time of an event that resulted in the revocation or suspension of the other business’s construction contractor license.

      (3) The board may place a contractor on probation if a total of three or more claims are filed with the board within a 12-month period against the contractor or a former licensed construction contracting business in which the contractor held at least a 10 percent ownership interest, measured as determined by board rule. A contractor may not be placed on probation unless the board determines after investigation that it is likely that the contractor has caused harm to the claimants. The board may require a contractor that is placed on probation to develop a corrective action plan, to attend specific classes and to resolve outstanding claims. The board may require a contractor that is placed on probation to take training and pass a test, both as described in ORS 701.072. The board shall take action to terminate the contractor’s license if the contractor is unwilling or unable to comply with the conditions of probation. [Formerly 701.137; 1999 c.344 §8; 1999 c.402 §23a; 2001 c.924 §27; 2005 c.432 §10]

 

      701.103 Continuation of board authority when change occurs in license status. A lapse, surrender, suspension or other change in license status does not affect any authority otherwise granted the Construction Contractors Board to proceed with an investigation, conduct a disciplinary hearing or take disciplinary action against a person for a violation of this chapter or rules of the board, or to determine a timely claim described in ORS 701.140. [2001 c.850 §2]

 

      701.105 Insurance required of licensed contractors; alternative form of security; rules. (1) Except as provided in subsection (2) of this section, a contractor who possesses a license as required under this chapter shall have in effect public liability, personal injury and property damage insurance covering the work of the contractor that is subject to this chapter, for an amount not less than:

      (a) $500,000 for a general contractor or licensed developer.

      (b) $300,000 for a residential-only specialty contractor.

      (c) $500,000 for all other specialty contractors.

      (d) $100,000 for a limited contractor.

      (e) $300,000 for an inspector.

      (2) The Construction Contractors Board by rule, in consultation with the Department of Consumer and Business Services, may allow a general or specialty contractor that is a residential-only contractor to provide an alternative form of security approved by the board instead of procuring a public liability, personal injury and property damage insurance policy. The board may approve an alternative form of security if the board determines that the alternative form of security provides protection to the public equivalent to the protection provided by an insurance policy in the amounts otherwise applicable to the residential-only contractor under subsection (1) of this section. A board-approved alternative form of security may consist of a combination of financial resources.

      (3) A residential-only contractor who provides a board-approved alternative form of security under subsection (2) of this section is considered for purposes of this chapter to have obtained insurance described in subsection (1) of this section. This subsection does not subject to regulation as an insurer a person who issues all or part of an alternative form of security, unless the alternative form of security otherwise qualifies as an insurance product.

      (4) The contractor shall provide satisfactory evidence to the board at the time of licensure and renewal that the insurance policy or board-