What is a "lien"?
A lien represents the cost of an improvement, system development charge, fine or other assessment against your property. If the lien is not paid when assessed, it remains recorded against your property. When the lien is paid it is said that the lien is "satisfied." If you don't pay the assessed amount the City may ultimately foreclose on your property. A City lien usually has first position over all other liens. The City cannot subordinate its lien's first-priority position.
Open and Bonded Liens
Open liens have the whole amount due and payable 30 days after assessment. Bonded or contracted liens are paid in installments. While waiting for a bond sale, the lien carries a temporary interest rate called an annual interim interest rate. The current interim interest rate is 5.50%. This is much lower than open liens, which have a fixed 12% annual interest rate.
Please telephone the Revenue Bureau if you are behind in paying installment payments or if you have a delinquent open lien. Their phone number is 503-823-4090. Every effort will be made to help you set up an affordable payment plan.
About Installment Payment Contracts
You may finance most improvements by signing an Installment Payment Contract. System Development Charge installment contracts are arranged at the Bureau that has the charge. Other installment contracts are obtained from Assessments & Liens. When completing an installment contract, you should read the terms, check the contract for accuracy, select the desired payment option, sign the installment contract and then return it to us. All property owners of record must sign the contract. There is a financing charge for the installment contract of $40 plus .0049% of the principal amount. Call 503-823-4090 for more information.
You indicate with the payment option how you wish to pay your installments. You may select from monthly payments for five or ten years. Sewer and Water system development charges and Local Improvement District (LID) installment contracts also have monthly or semiannual payments over 20-years. The amount of the contract must be over $2,500 for the 20-year option. Select the option carefully, because the longer a person pays on the lien, while you will have lower monthly payments, the more you will pay in interest. For example: the total interest paid at 5.50% on $1,000 over five years would be approximately $146. However, the same rate applied over 20 years would be approximately $651.
The City finances installment contracts by selling bonds. The City of Portland currently has an excellent bond rating of Aa2, which means lower interest costs. These Limited Tax Improvement Bonds are sold in a municipal Bond sale once or twice a year. Once bonds are sold there will be a one time change to a new permanent interest rate. The new rate is based on the actual municipal bond interest rate set when bonds are sold. Usually the five-year payment option has a lower interest rate than the ten-year option and the ten-year option lower than the 20-year options.
Find Out About Your Lien– Here is a List of the Nine Types of Liens
1. Local Improvement Districts, and Sidewalk Repair
Type: Open lien – bondable
Type: Open lien – Non-Bondable
3. Code Enforcement Fees
Type: Open Revolving lien - this is assessed a charge each month until the code violation is repaired.
4. System Development Charges
Senior Deferral: This option is no longer available. See Senior Deferral
Penalties for delinquency: Yes, after 60 days a penalty of 5% will accrue on the past due installment.
5. 180 Day Deferral of System Development Charges (Effective to 6/30/2010)
Type: Open, Non Bondable, available only for the Transportation and Parks & Recreation SDCs.
6. Six, Nine, and Twelve Month Deferral of System Development Charges (Effective 7/1/2010)
Type: Open, Non Bondable. Deferral term is dependant on total construction permit amount.
Payment: $50 nonrefundable fee. Payment in full is due 180, 270 or 360 days from issuance of a building permit.
Interest rate: Interest during the deferral period is set at the City's interim financing rate. The current interim rate is 5.50%. Full payment of the deferred amount and accrued interest is due on or before the end of the deferral period.
Installment contract: No. Property owner forfeits entering into a bondable installment contract upon signing a deferral contract.
Penalties for delinquency: From the date of assessment, 5.50% fixed annual interest will accrue against the principal amount. If payment is not received by the end of the deferral period, interest will be changed to the City's delinquent lien rate currently set at 12%. In addition, monthly penalties of 1/4 of 1% of the principal amount will be added for each delinquent billing.
7. Sewer Safety Net
Type: Open, Non-bondable - Residential property owners with a financial hardship, and who qualify, may receive a five year or longer "Safety Net Deferral" of payment of their sewer SDC charges. The property must be located within the city limits, and the property must be owner occupied.
8. Sewer SDC Large Lot Deferral
Type: Open – during the Mid County Sewer Program financial assistance was given to property owners. Property owners could defer payment on a portion of their sewer charges for property with large lots. This assistance is no longer offered; however, some property owners still have these deferred charges against their property.
9. Private Plumbing Loan Program
Type: Lien, non-Bondable: property owners who are required to connect to an available sewer may apply for a loan to connect their property to the sewer. When the loan is approved, they may hire the agreed upon plumber to do the plumbing. The contract is submitted to the the Bureau of Environmental Services and the plumber is paid. The cost for processing the loan is $90.