The construction industry is bouncing back, though not quick enough. The recent bad years have resulted in a decrease in licensing fees and other revenue generated by the State of Oregon through its Construction Contractors Board (CCB), which has resulted in cut backs in funding to the CCB. The CCB is charged with, among other things, licensing contractors and conducting a dispute resolution service that (prior to July 1, 2011) allows contractors, material suppliers and homeowners direct access to a contractor’s surety bond. Prior to July 1, 2011, complaints in the small commercial structure and residential sectors did not require a party to file a lawsuit and obtain a judgment against the contractor before the aggrieved party could obtain payment from the contractor’s bond. The CCB funding crisis has resulted in changes to this, however, and effective July 1, 2011, the CCB will now only act as a mediator of disputes. Until further notice, the CCB will no longer issue orders requiring a contractor’s surety bond to disburse bond proceeds, and if a party wants to obtain payment from the contractor’s bond, they must now first obtain a court judgment in their favor against the contractor.
Thus, if you’re a homeowner filing a real estate construction complaint with the CCB against a construction contractor or sub-contractor, or if you’re a contractor involved in a construction dispute, you now have some new procedures to follow. The CCB issued a press release on June 24 outlining the upcoming changes. From the CCB website: Beginning July 1, 2011 the Construction Contractors Board (CCB) Dispute Resolution Services (DRS) program will make significant changes to its program. For complaints filed on and after July 1, 2011, DRS will provide only mediation services. If the parties do not settle the complaint, the complainant must go to court and obtain a court judgment before DRS can send it to the contractor’s surety for payment. Complaints filed on or before June 30, 2011, will be processed in accordance to the rules that were in place at the time of filing. This change is made necessary by the recent sharp slowdown in construction that resulted in a significant drop in the number of licensed contractors and the fees paid to the CCB. To adjust to this drop in revenue, the legislature made significant cutbacks in the CCB’s budget for the DRS program. This reduced budget recently was signed into law by the Governor. The draft administrative rules implementing the changes are still being finalized. Interested parties can contact the CCB for more information, or contact a construction attorney to stay up-to-date. In addition, the CCB has recently developed a list serve for automatic email notification of changes.