Q:        What are stop notices and bonded stop notices?

A:         A stop notice is given by a claimant on a construction project stating what was furnished or agreed to be furnished, to whom, in what amount and, of that amount, what has been paid.

            A bonded stop notice is the same except it is given with a bond in the amount of 125% of claim or lien.  The bond is for the benefit of the owner, original contractor or construction lender if they suffer damages as a result of the stop notice claim or lien.

 

Q:        Who can give a stop notice?

A:       Any person entitled to record a lien, other than the original contractor.

 

Q:        Who can give a bonded stop notice?

A:        Any person entitled to record a lien.

 

Q:        Do stop notices and bonded stop notices apply to all jobs?

A:         No.  The notices do not apply to government work or dwellings of owner-occupants.

 

Q:        What happens if I don’t give a stop notice?

A:        If the owner or construction lender makes written demand for a stop notice, you must give a stop notice within 30 days or lose your lien rights.

 

Q:        How do I give a stop notice or bonded stop notice?

A:         It must be delivered in person or by certified mail to the owner or left at the owner’s residence or place of business.  For construction lenders, it must be given or served on the manager or other responsible person at the office that administers or holds the construction monies.

 

Q:        What happens when a stop notice is given?

A:       The owner must withhold from the original contractor and the construction lender may withhold from the borrower enough money to answer the stop notice claim and any claim of lien that may be recorded.

 

Q:        What happens when a bonded stop notice is given?