Oregon House Bill 3746, which became law on July 24, 2025 and became effective on January 1, 2026, operates to shorten the statute of repose for “a tort action by a homeowners association or association of unit owners arising from the defective construction, alteration or repair of a structure or unit.”
Prior to the enactment of HB 3746, the repose period for such an action was ten years. The new law—specifically Section 1, amending ORS 12.135—shortens that time to seven years following substantial completion or abandonment of construction. The text of the enrolled bill may be found here.
This change is potentially important for underwriters insuring condominium risks in Oregon, as the claims of the subrogating carrier in that jurisdiction are subject to the same defenses and limitations as the claims of the insured. This means that a subrogated insurer is subject to the same repose period as its insured, and generally must bring its subrogation suit within seven years of substantial completion of the condominium building, regardless of when the claim arose.
While the new law applies to condominiums created on or after January 1, 2026, and thus may not immediately create a substantial effect on existing subrogation claims, underwriters insuring condominium risks in Oregon should consult with the subrogation attorneys at Cozen O’Connor regarding how this new law may affect their recovery rights for future losses.