a:\newslw.96 [4]Alan Lee MitchellStephen De'ak211997-01-11T21:06:00Z2006-07-01T22:24:00Z2006-07-01T22:24:00Z11678957079221122611.8026 FURRER & SCOTT LLCConsider . . .VOL. 6, ISSUE 1 JANUARY, 1997Law OfficesFURRER & SCOTT LLC9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4250 -- (800) 334-8986 -- FAX: (503) 620-4315CORPORATION DIVISION SEARCHESHave you ever called the Oregon Secretary of State's Corporation Division at (503) 986-2200 to find out if a company is properly registered with the state, and been told that the company is not registered -- even though you know the company is registered? If so, you may have been victim to a quirk in the Corporation Division’s computer system.The Corporation Division computers are primarily designed to acquire "direct hits" only. This means that if you request information on a specific name, the computer will tell the operator if there is anything in the computers files about that specific name only. YOU MUST ASK FOR A "LEVEL 2" SEARCH if you want information on similar names also. A "level 2" search will provide you with a list of all entities that include the word or words or that have similar spelling.For example, if you asked the Corporation Division to look up the name "Jones Company" and there was no precise match, then you will be told there is no such listing. However, if you ask for a level 2 search for that name, you will be told if there is a "Jones Brothers Company" or a "Jones Corporation."NEW WASHINGTON RECORDING REQUIREMENTSEffective January 1, 1997, there are new requirements for recorded documents in Washington.There are two ways to comply with the requirements: attach a cover sheet to the document you are recording that satisfies the requirements, or revise the first page of the document to satisfy the requirements.A sample cover sheet for a claim of construction lien is shown on page 4.The detailed requirements are:1)First page margins: Three (3) inches on top, and one (1) inch for both sides and the bottom.2The "return to" information (name and address) must be in the upper left hand corner of the first page, and can be placed within the three inch top margin.3The first page of the document or the cover sheet must include the title of the document, i.e., "Claim of Lien" for a construction lien.4Cross references: For lien releases, the first page of the document or the cover sheet must include the auditor's number of the lien being released.5Abbreviated legal description: The first page of the document or the cover sheet must include an abbreviated legal description, which must include the assessor's property tax parcel/account number ("APN") and either (1) the section/township/range information or (2) the lot and block and subdivision information. Construction lien releases do not need any legal description or the APN. Typically, you can obtain the APN from a title company or the assessor's office.6Grantor/grantee: The cover sheet or first page of the document must list the names of the grantor(s) and grantee(s), and they must be identified as such. For construction liens, the grantor is the owner(s) of the land being liened and the grantee is the lien claimant. It is the reverse for lien releases - the grantor is the lien claimant and the grantee is the land owner(s).7Type size: the entire document must be in type no smaller than eight (8) point.8Footers and page numbers can remain at the bottom of each page, but cannot be within the one inch margin at the bottom of any page.If you have questions about the new recording requirements, you may telephone us or the following auditor’s offices for questions:Clark County Auditor, Merrili Sprecher, (360) 699-2208.Thurston County Auditor, Val Wood, (360) 754-4535.King County Auditor, Carolyn Abelman, (206) 296-1593.NEW FEDERAL LEAD PAINT RULESThe Environmental Protection Agency ("EPA") and the Housing and Urban Development Department (“HUD”) recently promulgated new regulations mandating that sellers, brokers, and landlords of residential real estate disclose everything they know about lead paint on a property. These new regulations went into effect on September 6 for owners of 4 or more homes and on December 6 for everyone else. The regulations apply to all residential properties constructed before 1978.A seller or a landlord must do the following things.1)Give the prospective buyer or tenant a pamphlet produced by the EPA, or an EPA-approved state pamphlet can be substituted. The official EPA pamphlet can be obtained by calling 1-800-424-5323. A limited number of these pamphlets are available from our office upon request.2)Disclose all information about any known lead-based paint or lead-based paint hazards in the house being sold or leased. This regulation also probably covers lead paint in common areas and might cover lead paint in another unit of a multi-unit building.3)Provide copies of any relevant records including records about common areas or other units if the other units were tested for lead to evaluate the building as a whole.4)Allow 10 days for buyers (not tenants) to get a lead inspection and back out of the deal based upon negative results.5)Place specific language in sales contracts and leases regarding lead information. The mandatory language is included at the end of this article.Brokers must inform sellers and landlords of what the regulations require and ensure compliance.If a seller or landlord does not comply with these regulations, or a broker does not ensure that a seller or landlord complies, there is a possibility that the buyer, tenant or child living on the property injured by lead paint, can sue for damages under the regulations. This is even if the seller of landlord did not know the child was living there. The regulations also allow for treble damages and attorney fees. Court costs and expert witness fees may also be recovered.As noted above, the following mandatory language must be included:For sales contracts:LEAD WARNING STATEMENT:Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller’s possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.For rentals and/or leases:LEAD WARNING STATEMENT:Housing built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not taken care of properly. Lead exposure is especially harmful to young children and pregnant women. Before renting pre-1978 housing, landlords must disclose the presence of known lead-based paint and lead-based paint hazards in the dwelling. Tenants must also receive a Federally approved pamphlet on lead poisoning prevention.DON'T REWRITE THOSE CONTRACTS YET!In our Fall, 1996 newsletter, we noted that the Oregon Supreme Court had agreed to review a recent Oregon Court of Appeals case that approved the ability of companies to contractually limit their liability.On November 29, 1996, the Supreme Court reversed the lower courts. Estey v. Mackenzie Engineering Inc., 324 Or 372 (1996). This case adds further gloss to the law of contractual disclaimers.The facts underlying this case were as follows: Plaintiff hired the defendant firm to perform a "limited visual review" inspection of a house that the plaintiff intended to purchase. After the purchase, the plaintiff discovered serious defects that required extensive repairs. The contract included a clause: "The liability of MEI and the liability of its employees are limited to the Contract Sum." This would limit the defendant's liability to the contract sum, $200. The plaintiff sought damages of $340,000.00.The Oregon Supreme Court reversed the lower courts' finding that the defendant's liability limitation clause was enforceable. The court based its holding on two reasons, both centered around the brief wording of the clause.Perhaps the biggest lesson to learn from this case is that courts tend to protect consumers. This plaintiff was a "lay consumer" according to the court and should not have been held to bear the risk of the defendant company's alleged negligence. Other Oregon cases have enforced liability limitation clauses as between two companies.It is still possible to contractually limit your liability. However, you need to bear two issues in mind. First, the clause must clearly and unequivocally express the nature and scope of the liability limitation. Second, if you are dealing with consumers, the clause may be struck down as unenforceable if a court feels that the results of the clause are harsh or inequitable.STAFF PROFILEMARY IWANIEC: Mary is our main file clerk and is responsible for our mail room. She has worked at Furrer & Scott LLC for two years. She and her husband Jim live in Oregon City with their cat, Bubbles. The three of them enjoy traveling in their recreational vehicle.FIRM NEWS:MICHAEL J. SCOTT spoke on Oregon construction registration and contract issues at a November 7, 1996 seminar in Portland for the Lorman Education Services.MICHAEL J. SCOTT is updating his chapter on Construction Lien law for the Oregon State Bar’s Construction Law CLE reference volumes. KRISTOPHER K. BAUMANN is assisting in this revision.DOUGLAS R. HOOKLAND made a continuing legal education presentation on December 16 in Vancouver to members of the Clark County Bar Association relating to claims on private and public construction projects.ALAN L. MITCHELL passed the Oregon bar examination and was admitted to the bar in September of 1996.KARL S. POND joins the firm as an associate. Karl is a June, 1995 graduate of Willamette University College of Law. During and immediately after law school, he worked for the Salem firm of Bonner & White. Although born in Houston, Texas, Karl grew up in Portland and attended Beaverton High School.RANDOM THOUGHTS“Law is experience developed by reason and applied continually to further experience.” Roscoe Pound.“The minute you read something you can’t understand, you can almost be sure that it was drawn up by a lawyer.” Will Rogers.This newsletter is published quarterly by the law firm of Furrer & Scott LLC for the benefit of its clients and friends and is intended to inform them about legal matters of current interest. This information is not intended to be, and should not be considered to be, legal advice. No actions should be undertaken in reliance hereon without professional legal counsel.Alan L. Mitchell, EditorLaw OfficesFURRER & SCOTT LLC9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4250 -- (800) 334-8986 -- FAX: (503) 620-4315