Oregon Developer License Bond
A $20,000 surety bond is required for residential and commercial developers licensed with the Oregon Construction Contractor Board (CCB). The bond is required to ensure licensed developers pay court judgments that result from disputes in development construction in accordance with Oregon Statute ORS Chapter 701.
Jet is the only direct Surety provider for construction developers with superior defense and the best rates available.
What Is the Cost of a Developer License Bond?
The lowest bond cost is $100 annually or $10 monthly. Jet can offer the lowest rates because we cut out the agent/broker and provide bonding directly to you, thus lowering the cost and providing the most efficient bonding process to make it easier for you.
| Term | Cost |
|---|---|
| Monthly | $10 |
| 1 Year | $100 |
| 2 Years | $175 |
| 3 Years | $250 |
Bond rates are based on personal credit and experience. The rate above is based on a preferred credit developer.
Our monthly rates come with no down payment to make the bond affordable regardless of your credit. Traditional insurance companies offer financing options with high down payments and high percentage APR’s.
How Is the Developer Bond Filed to the Construction Contractor Board?
Jet electronically files the bond to the Construction Contractor Board. A copy of the original bond will be sent to you for your records.
New licensees must file the bond along with the rest of the application paperwork. You can file the application along with the bond via email, fax, or mail below.
Fax: (503) 373-2007
Email: [email protected]
Mail: P.O. Box 14140, Salem, OR 97309-5052
Why Is the Developer License Bond Required?
The bond is a guarantee of financial security if a developer fails to pay a court judgment resulting from a development related dispute, like a breach of contract or nonpayment of obligations. If a developer does not pay a court judgment, then the surety will payout up to the full amount of the bond. However for those that expect to have never have any complaints against themselves, you can think of this bond as simply a requirement for licensing. The CCB will not allow you to develop without having the bond in place.
The Oregon Construction Contractor Board only uses two different bond forms, one for residential and one for commercial construction contractors. Developers use the same bond form as contractors which is simply titled “Residential Surety Bond” or “Commercial Surety Bond.”
Only one residential surety bond is needed if you have multiple residential endorsements, same for commercial endorsements. So if a residential developer already has a residential surety bond in place, then another residential surety bond is not required if they have any of the residential construction endorsements. The bond amount must be at the highest bond amount required between all the residential endorsements on the license.
Why Is the Developer License Bond Required?
All licensed residential and commercial developers in Oregon are required to provide a bond per Oregon Statutes ORS 701.081 and ORS 701.084. Developers are defined by ORS 701.005 as contractors that own properties or an interest in a property and arrange for development or improvement of a property with the intent to sell the property. Developers cannot perform actual construction work unless they are also licensed as a residential or commercial contractor.
The Oregon Construction Contractor Board separates construction between residential, small commercial, and large commercial structures. Residential developer’s scope of work includes residential and small commercial structures. A commercial developer can perform work on small and large commercial structures.
Small and large commercials are divided using factors such as size and/or cost of the structure, see details in ORS 701.005 (17)(a-d). An example of a small commercial structure would be a gas station or fast food restaurant. Large commercial structures are shopping malls, parking garages, or hospitals. Residential structures are defined in ORS 701.545.
There are approximately 200 residential developers and 60 commercial developers currently in the State of Oregon.
How Can I Avoid a Developer Bond Claim?
To avoid complaints against your license, it is best to quickly and respectfully handle grievances immediately. You should understand where complaints can come from and how to prevent those from occurring in the first place. A list of valid complaints from the public, contractors, and suppliers to file complaints against a developer is available in the Oregon Statute - ORS 701.140. Below are some common examples:
| Claimant | reason for claim | claim timeline |
|---|---|---|
| Supplier | Nonpayment of materials | Within 1 year from the date the materials were sold |
| Primary Contractor (existing structure) | Breach of contract | Within 14 months from the date the contractor substantially completed the work |
| Primary Contractor (new structure) | Breach of contract | Within 14 months from the date the structure was first occupied or 2 years after completion |
To avoid a dispute as a developer, you should ensure that contracts with suppliers and contractors are upheld and pay all parties appropriately in a timely manner. Developments have large contracts and deal with millions of dollars. It is important to know that consequences of bad contracts, minimal communication, or hiring unfit contractors can result in lawsuits for millions, let alone a bond claim for $20,000.
Developers are lumped together with contractors in the Oregon rules and statutes, but certainly have different issues and concerns including potential claims. Residential or commercial licensed contractors working on the development are responsible for any negligent or improper work performed. Developers that only hold a license with a residential or commercial developer endorsement cannot perform construction work and therefore are not responsible for any negligent or improper work performed by the contractor. Developers that also hold a residential or commercial contractor endorsement on their license can perform construction, but will be responsible for the work they perform.
A claim on a developers bond ultimately results from a claimant notifying the CCB of an unpaid court judgment from a dispute arising out of the development. Claimants are required to send a notice via certified mail to the developer at least 30 days in advance before they can file a complaint with the CCB per ORS 701.133. A claimant can instead choose to go directly to a civil court first before they take up the dispute to the CCB. In the end the bond can only be tapped for a claim by the CCB if they receive a judgement from the court requiring payment to the claimant.
The infographic below provides a picture of the different paths a dispute can go. This particular graphic is written out for contractors, but also applies to developers in terms of the way a dispute can go. Just keep in mind the perils for developers are different than contractors.
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Jet takes care of the renewal, cancellation, bond riders, reinstatements, and all other management of the bond through the NMLS for you. If a change needs to be made just let us know.
The bond must be renewed or replaced annually through the NMLS. The effective date of the filed bond is December 31st upon renewal, but must be submitted to the NMLS prior to December 1st. If not on file by that time, the DCBS can suspend your license.
What Happens If I Get a Claim On My Developer License Bond?
Contact Jet immediately once you receive a complaint. Jet’s claims department works hard to protect developers from claims, however only so much can be done after a court judgment is made against you. The developer is required to carry a surety bond for the sole purpose of covering a court judgment brought to the CCB as a result of a development related dispute, such as a breach of contract or nonpayment of obligations. The developer must make payment of the court judgment, or risk a bond claim if it is not paid in a timely manner. Any dispute between a developer and a claimant can be handled prior to a court judgment through direct resolution between both parties, or through mediation with the CCB. Claimants for developers are typically contractors, suppliers, and in some cases, an investor in the property.
An insurance liability policy protects developers from damages that result from their work, but the surety bond protects the public and businesses that work with the developer. In a bond claim the developer is responsible for their actions and must reimburse the surety company. Think of the surety as providing a letter of credit that shows the CCB that it’s safe to license you to administer developments. It is Jet’s intention to properly educate and represent developers so that claims can be avoided.
The CCB can revoke, suspend, or refuse to renew a license per ORS 701.102 if there is an outstanding bond claim. The CCB can also place a license on probation or require a higher bond limit if they would like to take punitive action. The Oregon Revised statutes give the CCB authority to make disciplinary judgements on a case-by-case basis. With that said, it helps to work with the CCB by promptly and thoroughly responding to any of their communications so you can receive a favorable judgement.
How Is a Developer License Bond Renewed?
If you are on monthly payments then you don’t have to worry about renewing your bond. So long as the automatic payment comes through the bond will remain current with the CCB. There is a 30-day grace period where the bond will remain active with the CCB should a monthly installment be missed for any reason.
The Oregon Construction Contractor Board will not back date a bond after cancellation. So be sure payment information is updated quickly to avoid a gap in bond coverage. If you make payment after the cancellation of the bond, a new bond will be issued and there will be a gap in bonding.
Contractors paying the bond on an annual basis need to submit payment before their renewal date. Don’t worry about putting this on your calendar as Jet will get a hold of you in plenty of time for you to make bond renewal payment. Unlike other insurance companies, we do not require any additional paperwork for bond renewal, just payment.
Can I Cancel the Bond and Get a Refund?
Jet can return any unearned premium on annual term bonds after we electronically file to the Oregon Construction Contractor Board. For monthly payments we will stop the payment process promptly. There is a 30-day cancellation provision on the bond so it cancels 30 days after the cancellation notice is received and processed by the CCB. The return amount takes into account the 30 day cancellation provision in which the bond is still active.
Reinstatements can be quickly filed to the CCB in the event the bond cancels because of nonpayment of the renewal premium or monthly payments. We will send you a cancellation notice before the cancellation is filed to the CCB in case you just happen to miss a payment. At Jet, we ensure that your bond will be handled with proper care so your license will always be in good standing.
Are Developers Required to Carry Insurance?
The Oregon Construction Contracting Board per Oregon Statute ORS 701.073 requires licensed developers to carry a general liability policy. Developers that hire or lease employees, are required to hold workers' compensation insurance.
General liability insurance covers personal injury loss or damages occurring from work performed. The CCB requires developers to submit a certificate of insurance naming the Construction Contractor Board as certificate holder. See their sample for instructions on how to properly submit the form. The CCB will fine or suspend developers that do not have current liability coverage.
Workers' compensation covers disability, lost wages, and medical treatment if an employee were to get hurt on the job. Developers that have employees are non-exempt and must show proof of insurance to the CCB by providing the carrier’s name and policy number from the current workers' compensation policy. Family owned businesses that do not have employees are exempt from workers' compensation if the corporate officers, partners, or members are immediate family members.
Other Bond Requirements
Public Works Bond: If you perform work on public works projects that have a total project cost of $100,000, then the Bureau of Labor and Industries (BOLI) requires you to obtain a public works bond for $30,000 and file it to the CCB. The public works bond is supplementary and must be submitted as well as the required developer bond.
Contractor License Bond: Businesses performing construction on residential, small commercial, or large commercial structures are required to have a surety bond. The bond can range from $10,000 to $75,000 depending on the license endorsement. A business with a construction license simply needs a commercial surety bond for all commercial endorsements, and a residential surety bond for all residential endorsements.
A developer is not required to obtain an additional bond, unless the development endorsement is opposite to the construction endorsement. For example, if your license has a commercial development endorsement and residential general contractor endorsement, then two bonds are required, one residential surety bond and one commercial surety bond.
In the case that a commercial developer also has a commercial contractor endorsement, like a general contractor level 1 endorsement, the $20,000 commercial surety bond will not suffice. The license holder must hold a bond for the greater required amount, and in this example it will be $75,000 because that is what is required of a commercial general contractor level 1 endorsement.
Residential Developer License Bond Form:
Commercial Developer License Bond Form:
