Oregon Restricted Residential Contractor License Bond
The Oregon Construction Contractor Board (CCB) requires a $10,000 bond for restricted residential contractor licenses that include:
- Home Services Contractor
- Home Energy Performance Score Contractor
- Residential Restoration Services Contractor
- Home Inspector Services Contractor
- Residential Locksmith Services Contractor
This bond is a form of assurance that the licensed restricted residential contractors pay court judgments and perform work according to Oregon Revised Statutes (ORS) 701.
Jet has the best process for surety bonds because we cut out the middlemen, like agents and brokers, and work directly with you as the insurance carrier.
What Is the Cost of a Restricted Residential Contractor License Bond?
The $10,000 bond for restricted residential contractors costs a low $75 annually or $8 monthly. Do you have a $15,000 or $20,000 requirement? While rare, they sometimes are required and rates start between $75 and $100 for those increased limits. You can apply for those bonds on our Oregon Contractor Bond page. Jet is able to offer the lowest rates because we cut out the middleman and their excessive commissions and fees.
| Bond Limit | Monthly | Annual |
|---|---|---|
| $10,000 | $8 | $75 |
Bond rates are based on personal credit and experience. At Jet, we offer low monthly rates 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.
Can Jet File the Bond For Me?
Jet electronically files the original bond to the Oregon Construction Contractor Board immediately. A copy of the original bond is sent to you for your records.
The CCB requires new licensees to file a bond along with their application. 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 Bond Required for Restricted Residential Contractor Licenses?
The bond is a form of financial security for consumers should a contractor fail to pay a court judgment resulting from a construction related dispute. If the contractor does not pay the court judgment, then the surety will payout up to the full amount of the bond to the claimant per ORS 701.145. The surety bond is not a form of insurance and contractors must reimburse the surety company if there is a bond payout. Contractors will have to pay back the surety company, therefore it is in their best interest to handle a dispute before it becomes a bond claim.
Only one residential surety bond is needed if you have multiple residential endorsements, same for multiple commercial endorsements. For example, if a residential contractor already has a residential surety bond in place, then another residential surety bond is not required for an additional endorsement such as a commercial developer. The bond amount must be the highest bond amount required between all the residential endorsements on the license.
How Can I Avoid a Bond Claim?
To avoid complaints against your license, it is best to quickly and respectfully handle grievances before they get to the CCB. 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 and the timelines for the public to file complaints against a contractor is available in the Oregon Statute - ORS 701.140. Below are some common examples:
| Claimant | Reason for Claim | Claim Timeline |
|---|---|---|
| Property Owner (existing structure) |
Negligent work, improper work, or breach of contract |
Within 1 year from the date structure was substantially completed |
| Property Owner (new structure) |
Negligent work, improper work, or breach of contract |
Within 1 year from the date the structure was occupied or 2 years after substantial completion |
| Employee | Nonpayment of wages | Within 1 year from the date the wages were earned |
| Supplier | Nonpayment of materials ($150 minimum) |
Within 1 year from the date the materials were sold |
| Subcontractor | Nonpayment of materials or labor furnished to primary contractor |
Within 1 year from the date the work was performed |
| Primary Contractor (existing structure) | Negligent or improper work, or breach of contract from a subcontractor |
Within 14 months from the date the contractor substantially completed work |
| Primary Contractor (new structure) |
Negligent or improper work, or breach of contract from a subcontractor |
Within 14 months from the date the structure was first occupied or 2 years after completion |
A restricted residential contractor license bond claim ultimately results from a claimant notifying the CCB of an unpaid court judgment from a construction related dispute. There are several things that can occur before it gets to a court judgment, and different ways it can get there. First, when a dispute arises, the claimant can choose between handling it through the CCB, a civil court, or directly with you, the contractor.
If the claimant goes directly to you, then there is an opportunity for both parties to rectify the problem before a third party gets involved. Disputes can widely vary, but in nearly all cases it will save both parties time and headache if it is handled without a third party. However, if you cannot come to an understanding or an agreement, the claimant can choose to go to a third party such as the CCB or a civil court, or decide to let the problem go.
If the claimant goes through the CCB, they are required to send a notice via certified mail to the contractor at least 30 days in advance before they can file a complaint with the CCB per ORS 701.133. The CCB will then determine the validity of the complaint based on the timeliness of the claim, ORS 701.143, and the types of allowable complaints per ORS 701.140 that include: negligent work, improper work, breach of contract and nonpayment of obligations. If the complaint is valid then the CCB will conduct a meeting between the two parties to mediate the dispute. If the parties do not resolve or settle the complaint, then the claimant must go to court to get a judgment and bring it back to the CCB in order to file a bond claim.
The claimant will eventually end up in civil court if conflict resolution directly with you or the CCB does not work. The claimant can go straight to civil court without first going to you or the CCB. In that case there may be less opportunity to settle the dispute before it comes to a final judgment by the court. Once a judgment is made, you have the option to either settle and pay the judgment, or appeal the ruling. An appeal is a second chance to find a more favorable judgment from the court.
If you are ultimately found at fault through the court process and a judgment is made against you, then you have two options; you can make payment or ignore it. If you choose to ignore it, then the claimant can file a claim against the bond with the CCB to collect restitution up to the full bond limit.
At any point in this process you and the claimant can handle the dispute outside of the third party. The dispute can be dropped at any point as well. You will have many opportunities to plead your case to either the CCB or a civil court. There are so many options to resolve the conflict before it will get to a bond claim. However if it does get to the end with both parties disagreeing and a civil judgment is placed against you with no more means of fighting it, then it is best to make payment on that judgment.
At Jet, we will do everything in our power to fight for you in the claim process, but we are legally obligated to payout on the bond when the CCB receives notice of an unpaid judgment. A surety bond is not insurance, you are obligated to pay back the surety company in full for the claim amount and any fees associated if a bond claim is paid out. A bond claim can result in the CCB taking action against the license through fines, or revocation/suspension of the license. With these things in mind, it is best to complete the judgment before it gets to a bond claim, and even better to handle a dispute before it gets to a court judgment. The infographic below provides a picture of the different paths in the contractor dispute process.
What Happens If I Get a Bond Claim?
Contact Jet immediately once you receive a complaint. Jet’s claims department works hard to protect restricted residential contractors from claims, however only so much can be done after a court judgment is made against you. The restricted residential contractor license bond is in place for the sole purpose of covering a court judgment brought to the CCB as a result of a construction related dispute. The contractor must make the payment of the court judgment, or risk a bond claim if it is not paid in a timely manner. Any dispute between a contractor and a claimant can be handled prior to a court judgment through direct resolution between both parties, or through mediation with the CCB.
Unlike an insurance policy, which protects a contractor from accidental damages, the surety bond protects the public and businesses that work with the contractor. The contractor is ultimately responsible for their actions and therefore must reimburse the surety company for paid claims. Think of the surety as providing a letter of credit that demonstrates to the CCB that it’s safe to license you to perform construction. It is not Jet’s aim to pay bond claims, but to curb claims activity through proper education and representation of contractors.
The CCB can revoke, suspend, or refuse to renew a license per ORS 701.102 if there is a bond claim. The CCB may also take punitive action by placing you in probation or require a higher bond limit. The Oregon Revised Statutes provide generic conditions for disciplinary action granting the CCB the authority to make judgements on a case-by-case basis. It helps to work with the CCB in any complaint or outstanding matter so you can receive a favorable judgement.
How Is the Restricted Residential Contractor 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 to make payment for the bond renewal. Unlike other insurance companies, we do not require any additional paperwork for bond renewal, just an easy payment.
Can I Cancel My Contractor Bond And Get a Refund?
Jet can quickly file a cancellation notice to the Oregon Construction Contractor Board and return any unearned premium on annual terms. For monthly payments we will promptly stop the payment process. The bond has a 30-day cancellation provision so it cancels 30 days after a written notice to the CCB is filed. Cancellation processing takes into account the 30-day period in which the bond is still active.
If the bond cancels because of nonpayment for annual renewal premium or monthly payments, we can quickly get the license back in order by electronically filing a reinstatement notice to the CCB. We will send a notice before cancellation is filed to the CCB if you happen to miss a monthly payment.
What Are Restricted Residential Contractor Licenses?
There are five restricted residential contractor licenses that the Oregon Construction Contractor Board offers. These stand alone licenses cannot perform any other construction activity than what is explicitly described for each license.
Home Services Contractor: can operate a business providing service, repair, or replacement under a warranty. No testing or experience is required for this license. There are currently around 30 home service contractor licenses.
Residential Home Energy Performance Score Contractor: can operate a business providing home energy performance scores. The Oregon Department of Energy allows contractors to use three different scoring systems, although only the scoring system from the U.S. Department of Energy is fully approved.
An individual applying does not need any past experience, but must complete training with one of the approved training programs listed on the certification form. There are currently 25 residential home energy performance score contractors.
Residential Restoration Services Contractor: can operate a business performing routine cleaning, water removal, personal property inventory, board up services, debris removal, or other services due to damage to the structure from a disaster. There may be no repair, replacement, or demolition of the structure or physical components.
There is no experience or testing required to begin this license. There are currently 10 residential restoration contractors.
Home Inspector Services Contractor: can operate businesses who perform residential home inspections of more than one structural component, ORS 701.445. Specialized inspectors only completing inspections of one structural component such as roofs or lead based paint are not required to have this license or endorsement.
Of all the restricted licenses this is the most intensive application process. An individual applying must show adequate experience as described in the application packet and pass a 200 question exam. There are 30 hours of continued education every 2 years. There are currently only a couple home inspector service contractors, however many residential and commercial contractors have the endorsement allowing them to perform this work.
Residential Locksmith Services Contractor: any business who “services, installs, repairs, rebuilds, rekeys, repins, or adjusts locks, hardware peripheral to locks, safes, vaults, safe deposit boxes, or mechanical, or electronic security systems,” per ORS 701.475, except for those that are exempt. There is just an online test required to get a license, no experience is needed. There is one company with this license currently.
Why Get a Restricted Residential Contractor License?
Restricted residential contractor licenses are limited in scope, but are easy to start because the Construction Contractor Board does not require prior experience. Two of the five licenses do not even need to take a test to qualify for the license. They also require lower insurance limits than other construction licenses with the Construction Contractor Board; a bond for $10,000 and general liability for $100,000 per occurrence as stated in ORS 701.081.
Residential and commercial contractors can endorse their current licenses with each of these types of work as long. As long as they complete the necessary requirements including testing and payment of fees, then they can qualify to perform this work under their license.
Are Restricted Residential Contractors Required to Carry Insurance?
Licensed contractors are required by the Oregon Construction Contracting Board to carry a general liability policy, ORS 701.073. Licensed contractors that are non-exempt, businesses that hire or lease employees, are required to hold workers compensation insurance.
General liability insurance covers damages or personal injury loss that is caused by the contractor. Contractors must submit a certificate of insurance that names the Construction Contractor Board as certificate holder, see sample for instructions. The CCB will fine or suspend license holders that do not have current liability coverage.
Workers compensation covers lost wages, medical treatment, and disability should an employee get injured while on the job. Contractors that are non-exempt must provide proof of workers compensation insurance to the CCB by providing the insurance carrier's name and policy number, and in some cases the business identification number (BIN) or federal identification number (EIN). If a contractor is using leased workers or temporary staffing then most likely those companies are already providing workers compensation and they can just provide that insurance information to the CCB.
Companies that are family owned, and do not have employees, are exempt from workers compensation if the partners, corporate officers, or members are all 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 contractor bond.
