A contractor performs $12,500 of work on a residential project in Oregon. The homeowner fails to pay after 45 days. Calculate the maximum lien amount the contractor can claim under ORS 87.
Correct Answer
B) $12,500
Under ORS 87, the lien amount cannot exceed the actual amount owed for work performed, which is $12,500.
Why This Is the Correct Answer
Under ORS 87, a mechanics' lien cannot exceed the actual amount owed for labor and materials provided. The contractor performed $12,500 worth of work and that is the maximum lien amount claimable. Liens are not a tool to recover more than the actual debt; they simply secure the unpaid contract amount.
Why the Other Options Are Wrong
Option A: $13,750
$13,750 represents the original amount plus a 10% markup, which is not how Oregon lien law calculates the maximum claimable amount. Interest or penalties do not automatically inflate the lien ceiling.
Option C: $15,000
$15,000 exceeds the actual work performed. While it might seem like a 'safe' round number or a buffer for costs, the lien cannot exceed what is actually owed for the work done.
Option D: $18,750
$18,750 represents the original amount plus 50%, which has no basis in Oregon lien law. There is no multiplier applied to the actual work value when calculating the maximum lien amount.
Memory Technique
Lien = Limit to what you're Owed. The maximum lien is exactly the unpaid amount — no more, no less. Think of a lien as a mirror reflection of the debt, not a magnifying glass.
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