HB 3746 makes a broad set of changes to Oregon law governing real property construction defects, condominium governance, and related litigation procedures. The bill revises the statute of repose and limitation framework in ORS 12.135 for claims arising from construction, alteration, or repair of real property, including different time limits for small residential/commercial structures and large commercial structures, and it adds special rules for homeowners associations and associations of unit owners bringing defect-related tort claims. It also updates condominium recording, turnover, board governance, and inspection requirements, including mandatory moisture-intrusion inspections at specified times and expanded turnover disclosures from developers to associations.
The bill also changes Oregon’s construction-defect notice-and-response process in ORS chapter 701. For notices of defect sent by homeowners associations or condominium associations, it extends certain contractor response deadlines, allows technical experts to attend inspections, requires more detailed written responses and remediation/payment offers, and clarifies when an owner may proceed to arbitration or court. It further provides that accepted remediation or payment resolves only the defects covered by the offer, and it adjusts tolling and repose rules so that remediation performed under an accepted offer relates back to the original substantial completion date rather than restarting limitation periods. Several provisions apply only to condominiums or notices created after the act’s effective date.
The bill’s impact on state law is significant for developers, contractors, subcontractors, suppliers, condominium associations, homeowners associations, unit owners, and county surveyors. It amends statutes in ORS chapters 12, 94, 100, and 701, creating new procedural obligations for association-led defect claims, new disclosure and transition duties at condominium turnover, and new survey/plat requirements for condominium recording. It also limits the reach of some association governance and defect-claim provisions for condominiums where each unit owner is responsible for both the interior and exterior of the unit.
Overall sentiment appears generally favorable but not unanimous. The bill advanced with strong majorities in both chambers, including 46-10 on House third reading, 24-4 on Senate third reading, and 43-5 on House concurrence, suggesting broad support for tightening defect-claim procedures and improving condominium oversight. Committee votes were also positive, though not unanimous, indicating some reservations about the scope or consequences of the changes.
The main points of contention likely centered on balancing consumer and association protections against the burdens placed on builders and design professionals. The bill gives associations more structured tools to pursue defect claims and requires more developer disclosure, but it also extends response timelines, adds inspection rights for contractors, and preserves opportunities to cure defects before litigation. The special carve-out for condominiums where unit owners control both interior and exterior responsibilities, along with the detailed notice requirements warning owners that litigation may affect sales, suggests lawmakers were attentive to the practical and financial effects on both homeowners and the construction industry.
HB 3746 amends Oregon’s statutes governing construction-defect claims, condominium formation and governance, and association-led litigation. It changes limitation and repose rules in ORS 12.135, adds special notice and board-approval requirements for HOA and condominium defect claims in ORS 94.662 and 100.490, updates condominium turnover and inspection obligations in ORS 100.210 and 100.417, and revises the statutory prelitigation defect process in ORS 701.560 to 701.595. The bill also imposes new or revised duties on developers, county surveyors, associations, owners, contractors, subcontractors, and suppliers, with several provisions applying only to structures or notices arising after the act’s effective date.
The bill appears to have received generally positive treatment in the Legislature. It passed committee and floor votes by comfortable margins in both chambers, indicating broad agreement on the need to refine construction-defect procedures and condominium governance rules. The presence of some no votes at each stage suggests there were still concerns, but the overall pattern points to support for the bill’s consumer-protection and process-clarification goals.
The likely areas of disagreement were the bill’s effects on the construction industry versus condominium and homeowner protections. Builders, contractors, and design professionals may view the expanded notice obligations, inspection rights, and association claim procedures as increasing litigation exposure and administrative burden, while associations and owners may support the added transparency, turnover disclosures, and moisture-inspection requirements. Another point of tension is the bill’s detailed timing rules and carve-outs, especially the different limitation periods for structure types and the special exception for condominiums where unit owners are responsible for both interior and exterior maintenance.