Tag Archives: oregon contractor license

Changes to Contractor License Bond Claims Process in Oregon

As of January 1, the process of filing a claim against a residential contractor license bond now also includes a mediation process

By Vic Lance, Lance Surety Bond Associates

(April 8, 2017)

res_contractor_bond_claimsAs of January 1, 2017, new rules regarding the contractor license bond claim process in Oregon have been put in place. These rules only apply to bond claims brought against residential contractors.

Under the new rules, the Oregon Construction Contractors Board (CCB) will first attempt to mediate the situation that has given rise to a complaint before letting claimants file a formal claim against the bond. Read on for a full overview of the new rules regarding filing a contractor license bond claim in Oregon.

The Oregon residential contractor license bond

According to Section 701.145 of the Oregon Revised Statutes (ORS), residential contractors are required to obtain a contractor license bond when applying for their license. Current state law requires residential contractors to obtain bonds in the following amounts, depending on the type of license they obtain:

  • $20,000 bond for residential general contractors and residential developers;
  • $15,000 bond for residential specialty contractors; and
  • $10,000 bond for residential limited contractor, residential locksmith services contractor, home services contractor, home inspector services contractor, home performance score contractor.

The purpose of contractor license bonds is to offer protection to the Construction Contractors Board as well as to the clients of a contractor. The protection is provided in cases when a contractor violates Oregon contractor regulations and laws and causes damages or losses. This may include defaulting on a contract, not complying with the conditions of a contract or simply doing a bad job.

In the case of a violation, a contractor license bond claim can be made. Once the claim is investigated by the CCB and the surety company and is deemed within the scope of the bond, compensation is paid to claimants.

But as of January 1 the process of filing a contractor license bond claim against residential contractors in Oregon has been amended.

Changes to the Oregon residential contractor license bond claims process

In order to protect contractors from surety bond claims that may not be within the scope of the law as well as to assist the process of resolving complaints, House Bill 4121 introduced changes to the ORS.

Previously, a complaint had to be filed against a contractor, and the CCB would then investigate the complaint and either give rise to a claim against the contractor’s bond or recommend various actions to the contractor in order to resolve the situation.

According to Section 8.4 of Bill 4121, as of January 1, the process of filing a claim against a residential contractor license bond now also includes a mediation process. Once the Board receives a complaint against a contractor, it will investigate whether it has jurisdiction over the complaint.

The Board will then try to conduct meetings either on-site or per telephone to mediate the dispute between the complainant and the contractor. As previously, the Board may still suggest actions to the contractor that may compensate the complainant, without giving rise to a claim against the bond. According to the Bill, if a contractor takes the Board’s suggestions into consideration that is sure to influence any subsequent disciplinary proceedings that the Board may bring against the contractor.

Section 8.5 of the Bill specifies that only if the contractor and the complainant do not reach an agreement about resolving the complaint, does the complainant have a right to receive payment under a bond. The complainant must then:

  • Get a final judgment against the contractor by a court; or
  • Get an arbitration award against the contractor, reduced to a final judgment by a court.

When this occurs, the surety is notified by the Board of the final judgment as well as of the amount it must pay according to the Board.

It’s important to note that these changes to the contractor license bond claim process do not concern complaints filed under ORS 701.140 (4). Such complaints are related to the payments of wages for labor or employee benefits. These types of complaints do not go through a process of mediation but are instead immediately addressed through a court that issues a judgment.

###

 

Vic Lance is the founder and president of Lance Surety Bond Associates. He is a surety bond expert who helps mortgage brokers get licensed and bonded. Vic graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan’s Ross School of Business.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Make sure your contracting business doesn’t work for free!

Your contractor’s license is the most important first step.

In California, a contractor was recently ordered to repay over $750,000 when it became evident that the company had operated without being properly licensed in the state of California. In Oregon, a contractor has been barred from seeking over $285,000 in compensation when his license was suspended during the course of a contract.  Don’t let this happen to your contracting business! OnlineEd will tell you what the risks are, and what you can do to mitigate them.

In a 2012 court decision, a California constructing contractor was ordered to repay the entire $750,000 contract earned while performing work while unlicensed.  The sole proprietor was contracted to construct a temporary access road and parking lot for a casino. After submitting a bid in March 2007, the contracting company finished its work and was paid in full around May. However, an application for a license was submitted while work was ongoing, and the contracting company first received its contractor’s license in October 2007.  The court subsequently ruled that the company be required to refund all of the money paid by the client  upon completion of the contract.

While harsh, this action is consistent with California courts’ previous decisions that contractors should be held liable for their licensure to the point of being denied payment or being required to refund payment already received.

Similar legislation is in place in Oregon, and can be seen in another 2012 court decision which upheld a ruling barring a contractor from commencing action seeking compensation earned while operating without being properly licensed. While constructing a residence, the contractor’s license to perform construction work was suspended for two weeks because of expired liability insurance. Because of this suspension, the court held that the contractor was unable to seek compensation allegedly owed to him through legal means, losing out on an amount over $280,000.

These worst-case scenarios are cautionary tales, but they should not be ignored. Licensure costs time and money to obtain, but the alternative is far more expensive. Making sure that your contracting business is properly licensed throughout the entire process – from bid to completion – will protect your business from substantial losses. OnlineEd.com can help with your Oregon contractor needs here.

Once you have obtained or renewed your license, make sure you fulfill all of the continuing requirements to avoid a suspension. The CCB lists some common mistakes and oversights that can cause your license to be suspended:

  • Expired liability insurance.
  • Cancellation of your bond.
  • Hiring employees while in an “exempt” employer status
  • Deletion of RMI (Responsible Managing Individual) form due to disassociation or death.
  • License or renewal fees returned as “insufficient” or other non-payment issues.
  • Maintaining a non-exempt status with no workers’ compensation.
  • Failure to maintain your corporate or LLC (Limited Liability Company) filing.

 

Make the most of your business; ensure you are properly licensed and continue to double-check your license frequently. Don’t get caught in a mistake and end up working for free!

###

For more information on obtaining an Oregon contractor license, please visit the OnlinEed web site at: www.OnlineEd.com or give them a call at 866.519.9597

EPA Takes Action Against Violators of the Lead Renovation, Repair and Painting Rule

(EPA – WASHINGTON, D.C.) – Today, EPA announced 17 enforcement actions for violations of the Lead Renovation, Repair and Painting rule (RRP).

The RRP rule protects homeowners and tenants from dangerous lead dust that can be left behind after common renovation, repair, and painting work. It requires that contractors and subcontractors be properly trained and certified, and use lead-safe work practices to ensure that lead dust is minimized. Lead exposure can cause a range of health effects, from behavioral problems and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing.

“Using lead-safe work practices is good business and it’s the law,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is taking action to enforce lead rules to protect people from exposure to lead and to ensure a level playing field for contractors that follow the rules.”

The enforcement actions address serious violations of the RRP rule, including fourteen actions where the contractor failed to obtain certification prior to performing or offering to perform renovation activities on pre-1978 homes, where lead is more likely to be present. Other alleged violations included failure to follow the lead-safe work practices, which are critical to reducing exposure to lead-based paint hazards.

The 17 enforcement actions listed below include 14 administrative settlements assessing civil penalties of up to $23,000. These settlements also required the contractors to certify that they had come into compliance with the requirements of the RRP rule. Additionally, EPA filed three administrative complaints seeking civil penalties of up to the statutory maximum of $37,500 per violation. As required by the Toxic Substances Control Act, a company or individual’s ability to pay a penalty is evaluated and penalties are adjusted accordingly.GTON – Today, EPA announced 17 enforcement actions for violations of the Lead Renovation, Repair and Painting rule (RRP).

The RRP rule protects homeowners and tenants from dangerous lead dust that can be left behind after common renovation, repair, and painting work. It requires that contractors and subcontractors be properly trained and certified, and use lead-safe work practices to ensure that lead dust is minimized. Lead exposure can cause a range of health effects, from behavioral problems and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing.

“Using lead-safe work practices is good business and it’s the law,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is taking action to enforce lead rules to protect people from exposure to lead and to ensure a level playing field for contractors that follow the rules.”

The enforcement actions address serious violations of the RRP rule, including fourteen actions where the contractor failed to obtain certification prior to performing or offering to perform renovation activities on pre-1978 homes, where lead is more likely to be present. Other alleged violations included failure to follow the lead-safe work practices, which are critical to reducing exposure to lead-based paint hazards.

The 17 enforcement actions listed below include 14 administrative settlements assessing civil penalties of up to $23,000. These settlements also required the contractors to certify that they had come into compliance with the requirements of the RRP rule. Additionally, EPA filed three administrative complaints seeking civil penalties of up to the statutory maximum of $37,500 per violation. As required by the Toxic Substances Control Act, a company or individual’s ability to pay a penalty is evaluated and penalties are adjusted accordingly.

###

More about lead and instructions on getting certified: www.epa.gov/lead

More about becoming an Oregon licensed contractor: https://www.onlineed.com/info/Contracting/Oregon/LicenseTraining/