A general contractor hires a subcontractor who performs $15,000 worth of electrical work. The property owner pays the general contractor but the general contractor fails to pay the subcontractor. Calculate the subcontractor's maximum lien claim under ORS 87.
Correct Answer
A) $15,000 - full amount of unpaid work
Under ORS 87, a subcontractor can lien for the full amount of unpaid work regardless of whether the owner paid the general contractor.
Why This Is the Correct Answer
Under Oregon Revised Statutes (ORS) 87, subcontractors have the right to file a lien for the full amount of unpaid work performed, regardless of whether the property owner has already paid the general contractor. This protection ensures subcontractors can recover payment even when the general contractor fails to pay them after receiving payment from the owner. The lien amount equals the contract value of work performed but not paid.
Why the Other Options Are Wrong
Option B: $7,500 - half the contract amount
Oregon lien law does not limit subcontractor lien claims to half the contract amount. The statute allows recovery of the full unpaid amount. A 50% limitation would unfairly reduce the subcontractor's ability to recover legitimate debts for work performed, which contradicts the protective purpose of mechanic's lien laws.
Option C: $0 - cannot lien if owner paid general contractor
This is incorrect because Oregon lien law specifically protects subcontractors even when the owner has paid the general contractor. The subcontractor's lien right is independent of payments between owner and general contractor. Without this protection, subcontractors would have no recourse when general contractors fail to pay despite receiving payment.
Option D: $18,000 - work amount plus interest and fees
While lien claims may eventually include interest and attorney fees in some circumstances, the maximum lien claim amount under ORS 87 is limited to the actual unpaid work performed. Additional costs like interest and fees are separate considerations and not part of the base lien amount calculation.
Memory Technique
Remember 'FULL PROTECTION': Oregon gives subcontractors FULL lien rights for unpaid work, providing complete PROTECTION regardless of owner-contractor payment status.
More or-supplement Questions
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