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Bonded stop notice private construction

We are a sub on a large private residential apartment project which has stopped paying. The owner claims the lender still has funds but is refusing to pay for some dispute they are having. The GC is also not paying us since they are not getting paid. We filed lien. Now we want to do a bonded stop payment notice for the lender. How do we do that?

3 replies

Apr 2, 2020

The stop payment notice is a form, similar to a mechanic's lien, that needs to be served on the lender. Of course, you need a surety to write the bond. Did you serve the lender with the 20-day preliminary notice? You should probably hire a lawyer, at this point. I would be happy to help. My phone number is 949 356 6464. Thanks, Andrew

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Apr 2, 2020

I’m sorry, I meant to include the following instruction for a Stop Payment Notice. On the form fill-In: 1. The Name And Address Of The Owner And Lender; 2. Your Name As The Claimant Entitled To Give Notice; 3. Your Address; 4. The Name Of The Entity You Contracted With; 5. A General Description Of Your Work Provided; 6. A Description Of The Jobsite Sufficient For Identification, And The Street Address, If Any; 7. The Name And Address Of The Direct Contractor; 8. The Total Amount Of Your Contract; 9. The Sum Due You Through The Date Of This Notice; 10. Your Company Name; 11. Execute It As The Claimant; And 12. Complete And Execute The Verification And Proof Of Notice Declaration. Important Things To Remember About The Stop Payment Notice: 1. Serve It After You Have Ceased To Provide Work, And Before The Earlier Of: A) Within 30 Days After Recordation Of A Notice Of Completion Or Cessation; Or, If No Notice Of Completion Or Cessation Has Been Recorded: B) Within 90 Days After Completion Of The Project. 2. Serve It Via Prepaid, Certified Mail Return Receipt Requested (Accompanied By A Sufficient Bond, If Applicable) To The Owner, Or The Owner's Architect, And To The Construction Lender’s Manager Or Other Responsible Officer Or Person At The Office Or Branch Administering Or Holding The Construction Funds. 3. Commence Your Stop Payment Claim At Least 10 Days After Service Of Your Stop Payment Notice, And On The Earlier Of: A) Within 30 Days After Recordation Of A Notice Of Completion Or Cessation; Or, B) If No Notice Of Completion Or Cessation Has Been Recorded, Within 90 Days After Completion Of The Project, Plus 90 Days. Note: Include A Self-Addressed Stamped Envelope And Request A Copy Of Any Payment Bond Obtained Within Thirty (30) Days Of The Recipient’s Election To Do So.

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Apr 2, 2020

First, I recommend you start with contacting the lender yourself to confirm there are still construction funds. (You may not want to spend money, chasing money, that hasn't been paid.) Assuming there are funds, the second thing to consider is purchasing a stop notice bond. Upon receipt of a Stop Notice claim, accompanied by a stop notice bond, the lender must withhold funds from the General Contractor until your Stop Notice claim is resolved. Thus a bonded stop notice claim is a very powerful tool to help you get paid. (Feel free to contact me so that I can connect you with the correct surety bond agent to determine the cost of the stop notice bond.) Since this is private works job, unless your Stop notice claim is accompanied by a bond, it is in the lender's discretion whether to hold money from the GC. Third step, after you confirm there are funds, and assuming you decide to purchase a stop notice bond, is to submit the Stop Notice and Bond to the lender. Please know that various deadlines apply to submitting a Stop Notice (bonded or not) and therefore it would be in your best interest that you confer with an attorney to make certain you are meeting the deadlines. Last note: you said you filed a lien. You must file suit within 90 day of the date you recorded the lien to enforce your mechanic lien rights (which are separate and apart from your Stop Notice rights). Another reason why you may want to confer with a Construction Law Lawyer. Feel free to email me another other questions you may have.

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