{"id":903492,"date":"2024-10-29T15:59:51","date_gmt":"2024-10-29T21:59:51","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903492"},"modified":"2024-10-29T15:59:57","modified_gmt":"2024-10-29T21:59:57","slug":"retention-bond-more-simpler-options-oregon","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/retention-bond-more-simpler-options-oregon\/","title":{"rendered":"More (and Simpler) Options Under New Oregon Retention Law"},"content":{"rendered":"\n<p>Michael Yelle | <a href=\"https:\/\/www.acslawyers.com\/uncategorized\/more-and-simpler-options-under-new-oregon-retention-law\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Ahlers, Cressman &amp; Sleight<\/a><\/p>\n\n\n\n<p>Similar to the changes made by the Washington Legislature last year, the Oregon Legislature recently changed its retention law. Oregon public works agencies and large commercial project owners are now required to accept surety bonds in lieu of withholding retainage on construction projects. There is also no longer a requirement to deposit <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/retainage-terms-oregon-construction\/\">retention funds<\/a> in an interest-bearing escrow account.<\/p>\n\n\n\n<p>The owner or public agency must accept the bond in lieu of retainage unless specific grounds exist. For example, public agencies must find there is \u201cgood cause\u201d for rejection of the bond based on the \u201cunique project circumstances. Private owners have less discretion to reject a bond and if the bond meets the statutory requirements, per ORS 701.435(1)(a) \u201cthe owner and lender shall accept\u201d the bond \u201cin lieu of all or any portion of the retainage\u2026\u201d<\/p>\n\n\n\n<p>Courts have not analyzed when \u201cgood cause\u201d exists for public agencies to reject bonds or exactly what will allow a private owner to reject a bond. However, an agency or owner cannot have a general policy to reject retention bonds. The statute does not provide next steps if the contractor disagrees with a decision to reject the bond. It may be necessary to proceed under the contract\u2019s dispute resolution procedure or it may be more appropriate to take the issue directly to the courts.<\/p>\n\n\n\n<p>The retention bond does not need to be for the entire amount retained. The contractor may provide a bond \u201cfor all or any portion\u201d of the amount retained or to be retained. If a retention bond is used, it should be in the form provided in ORS 701.435.\u00a0\u00a0\u00a0<\/p>\n\n\n\n<p>Nor is a contractor required to provide any retention bond, in which case the owner or agency may still withhold retention. Since there is no longer a requirement that retention be held in an interest-bearing escrow account, retention can now be held in an interest-bearing account at a bank or other financial institution. Earnings from this account will still accrue to the contractor. A contractor may also provide an owner with an irrevocable letter of credit for all or a portion of the retention. The new statute also leaves open the possibility that other instruments \u2013 if approved by the Oregon Department of Administrative Services \u2013 can also be acceptable.<\/p>\n\n\n\n<p>In addition to contractors, Oregon law also gives subcontractors and suppliers the option of providing a retention bond \u2013 even if the contractor does not bond their own retention. If this occurs, the contractor must post the bond with the owner or agency on the subcontractor\u2019s or supplier\u2019s behalf.\u00a0<\/p>\n\n\n\n<p>The attorneys at ACS are happy to answer any questions you may have or provide any legal assistance you may need regarding this new change in Oregon\u2019s retention statute.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Michael Yelle | Ahlers, Cressman &amp; Sleight Similar to the changes made by the Washington Legislature last year, the Oregon Legislature recently changed its retention law. Oregon public works agencies and large commercial project owners are now required to accept surety bonds in lieu of withholding retainage on construction projects. There is also no longer&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/retention-bond-more-simpler-options-oregon\/\">Continue reading <span class=\"screen-reader-text\">More (and Simpler) Options Under New Oregon Retention Law<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,320,12100],"class_list":["post-903492","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-oregon","tag-retention-bond","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>More (and Simpler) Options Under New Oregon Retention Law - Advise &amp; 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