STOP NOTICES
A
Stop Notice, on either a public or private project, is a notice to the Owner or
construction lender that tells the Owner or lender that you are not being paid
for your work on the project and that you want the Owner or the lender to hold
back a certain amount of money from the General. A General Contractor may not
serve a Stop Notice on the Owner, but subcontractors and suppliers can. The
General and the subs/suppliers can all serve a Stop Notice on the construction
lender.
The Stop Notice is a claim on the available funds for the construction, and it is an important option, although not without its downsides and potential for abuse. The only meaningful way to file a Stop Notice in private works is to file a bonded Stop Notice. Again, a Preliminary Notice must have been served on all necessary parties. If you file a bonded Stop Notice without having a Preliminary Notice in place, it is not valid. Therefore the Preliminary Notice is absolutely necessary, as in it is a prerequisite, so make sure you have the Notice in place!
Unlike Mechanic Liens, the Stop Notice can be served at any time during the course of the project. The project does not need to be completed before serving the Stop Notice. If you are not being paid, it is not advisable to wait until the end of the project or, for that matter, until your work is completed, before sending the Stop Notice. It may be too late by that time. As we will discuss, when it is clear that you are not being paid, or that you are not going to be paid, you need to file the bonded Stop Notice.
You do not record the Stop Notice; you serve it by mail or by hand delivery on the Owner and/or lender, and the General. It is not absolutely necessary that the General get served; the General will be notified by the Owner or the Lender in any case. If you are the General, though, you want a copy of any Stop Notice for your records.
The Stop Notice is a claim on the available funds for the construction, and it is an important option, although not without its downsides and potential for abuse. The only meaningful way to file a Stop Notice in private works is to file a bonded Stop Notice. Again, a Preliminary Notice must have been served on all necessary parties. If you file a bonded Stop Notice without having a Preliminary Notice in place, it is not valid. Therefore the Preliminary Notice is absolutely necessary, as in it is a prerequisite, so make sure you have the Notice in place!
Unlike Mechanic Liens, the Stop Notice can be served at any time during the course of the project. The project does not need to be completed before serving the Stop Notice. If you are not being paid, it is not advisable to wait until the end of the project or, for that matter, until your work is completed, before sending the Stop Notice. It may be too late by that time. As we will discuss, when it is clear that you are not being paid, or that you are not going to be paid, you need to file the bonded Stop Notice.
You do not record the Stop Notice; you serve it by mail or by hand delivery on the Owner and/or lender, and the General. It is not absolutely necessary that the General get served; the General will be notified by the Owner or the Lender in any case. If you are the General, though, you want a copy of any Stop Notice for your records.