Are you one of the lucky ones who just purchased a new Oregon home or perhaps you’ve just completed a remodel? Are you looking for that automatic one-year warranty everyone told you about? Here’s the shocker: it doesn’t exist. There is no such thing as a legally-required one year warranty in Oregon, despite the ubiquitous popularity of this myth.
However, as with all great myths, it stems from a nugget of truth. If you hire a contractor who fails to deliver, you can file a lawsuit anytime up to six years after the completion date (maximum ten years for negligence discovered later). In that sense, you actually have a much longer warranty. However, you might have a hard time recovering money from the contractor many years later, especially if he is no longer in business.
What about insurance, you ask? Insurance companies typically will not cover poor workmanship unless it has also caused some damage to the home as a result. What about the bond, you ask? The bond exists to pay money for just about anything that goes wrong, even if the contractor is bust. Here’s the catch: only the Oregon Construction Contractors Board (CCB) can issue an order for payment from an Oregon bond, and the CCB is only allowed to consider claims filed within one year following substantial completion or occupancy.
That’s where the mythical legal one year warranty finds its genesis. If you file a CCB complaint within the one year time frame, the contractor is required to fix it or the CCB could order payment from the bond. The CCB will address claims of negligent work, improper work, or breach of contract considering generally accepted building practices and industry standards. The required bond is typically $20,000, although if your judgment or final order exceeds that amount, you can also use traditional collection efforts such as liens and garnishments.
The CCB’s authority over contractor bonds is not a warranty, but is sufficiently powerful that most owners and contractors assume the law provides a warranty. Equally important: this “one-year warranty” does not limit the legal rights you have against your contractor in court for at least six years. Also note that the CCB has made some recent changes to their claim procedures, which may require a lawsuit if mediation fails. For more information about the Oregon CCB, bonds, and dispute resolution, click here for CCB information or contact one of our attorneys.