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Stop Notice

 

Overview of Stop Notice

A "stop notice" is a demand made to a public entity, property owner, and/or construction lender to withhold the amount that is owed to the contractor from any undisbursed funds. The stop notice acts as a lien against any undisbursed funds. Below are some examples of when a stop notice is used:

  • If there is a construction lender financing the project and the contractors are not paid, then the contractors can serve a stop notice against the lender and require the lender to withhold the money from the owner.
  • In a public works project, if the lower tier contractors are not paid, then they can serve a stop notice against the public entity and require the public entity to withhold the money from the general contractor.
  • In a private works project, if the lower tier contractors are not paid, then they can serve a stop notice against the property owner and require the property owner to withhold the money from the general contractor.
If the contractor is still not paid after serving the stop notice, the contractor can enforce the stop notice by filing a lawsuit. However, due to expensive court costs and long waiting periods, it is best to resolve the matter outside of court (i.e. joint checks, etc).

Generally, stop notices are available to contractors, subcontractors, laborers, architects, surveyors, material/equipment suppliers, and many other construction related companies who performed a "work of improvement." Only certain states permit this type of claim. Please click here for more information on the specific requirements for stop notices.

My Legal Depot will take the confusion out of preparing and serving your stop notices. Our experienced staff will research, prepare, and serve your notices promptly and accurately at a fraction of the cost of an attorney.

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Disclaimer: The information provided in this site is not legal advice and is intended to be used for informational and entertainment purposes only. Click here for the full disclaimer. My Legal Depot is a registered and bonded Legal Document Assistant with Los Angeles County. Registration # 0390