Escrow & Title
In Oregon, a mechanic's lien filed by an unpaid contractor has priority over a recorded mortgage if:
AThe contractor filed the lien before the mortgage was recorded
BThe construction work began before the mortgage was recorded — under Oregon's 'commencement of work' priority rule✓ Correct
CThe mortgage amount exceeds the lien amount
DThe property is a commercial building
Explanation
Oregon follows the 'commencement of work' doctrine for mechanic's lien priority (ORS Chapter 87). A mechanic's lien dates back to the visible commencement of construction work on the site — not the date the lien is filed. If construction visibly began before the lender recorded its mortgage, the mechanic's lien may have priority. Lenders obtain title searches and require lien waivers for this reason.
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