Stop Notices

A Stop Notice can be used to force an owner or construction lender to withhold money for a particular subcontractor or material supplier, if that person has not been paid. In general, once served with a stop notice, the owner/construction lender may be required to withhold monies that would otherwise go to the prime contractor, in an amount that is sufficient to satisfy the amount owed to the subcontractor. Stop Notices can be used by prime contractors and material suppliers as well.

In general, anyone that is entitled to record a lien is also entitled to send a Stop Notice. However, the procedural requirements for Stop Notices are complicated and are different depending on whether the type of Stop Notice and whether there are other bonds already in place for the project. There are penalties for serving a false stop notice. As such, an attorney should be consulted before sending a Stop Notice.

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