Oregon’s construction lien statutes are grounded in several public policy considerations:
- They serve an economic function by encouraging economic activity – construction and development of real property – through a legal remedy that secures payment for those who furnish labor or materials to improve real property.
- Lien statutes reflect a policy of fairness in business dealings. It is fair that those who improve real property are granted a real property interest in those improvements, which can be used to prevent the unjust enrichment of the property owner at the contractor’s expense.
- They encourage prompt payment. A reliable remedy for non-payment such as a construction lien encourages prompt payment to those who improve real property.
- Lien statutes reduce litigation by encouraging the prompt resolution of disputes. Many payment disputes settle soon after a lien claim is recorded, because a valid construction lien claim threatens the existence of other interests in real property—such as those of project owners and lenders.
- They recognize that the typical payment process on Oregon construction projects – under which work is performed before payment is made – inherently involves the granting of credit by lower-tier parties to upper-tier parties. A construction lien provides claimants with a form of collateral to secure the debt associated with that credit.