Home>Levelset Community>Legal Help>Can I use a stop payment- public form for a private Job? The contract was for $50,000 and to date only been paid 17000,

Can I use a stop payment- public form for a private Job? The contract was for $50,000 and to date only been paid 17000,

I am a small california Sub-contractor who has finished the work under the contract. I called the owners to let them know that i will be filing a lien on the project due to non payment. The contract was for $50,000 and to date i've been paid only $17,000 and the owners are paying the Prime contractor out of pocket so no lender is involved. They ( the owners) have already paid the Prime Contractors 2/3 of the amount of the contract with the Prime Contractor. They were unaware of the non-payment and not sure what to do. The Prime Contractors have told me that they have not been paid and that when they get paid i will get paid through emails over last couple of months. Can I file a stop Notice- public for this project to the Owners / Prime Contractors and the Surity Company? The owners have already had other Sub contractors file Mechanic Liens recently on the project. This is a residential project in a declared fire Disaster area. I also did the 20 day pre lien notice. Respectfully , Dan Precision Concrete

3 replies

Jul 1, 2020

So long as the entire job has not been complete for more than 30 days after the recording of a Notice of Completion, or 90 days after completion, if no Notice of Completion was recorded, you should record a mechanic's lien for the balance due to you. Then, you have 90 days to file suit. And, yes, you can also serve a stop payment notice. Call me or email if you would like to further discuss. Carlton & Alberola and/or Andrew Carlton have not been retained by the recipient of the above comment and, moreover, the above comment does not create an attorney-client relationship. The above is general commentary based on limited and insufficient information. If you wish to obtain legal advice, please contact Andrew Carlton at 949-954-6666 x101, or by email at andrew@cnalawfirm.com.

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Jul 2, 2020

You can send stop payment notice on a private project just as with a public project. This will obligate the owner to withhold payment to the direct contractor for the amount that you are owed. You can insist that the owner issue a joint check as a condition to releasing the withheld funds. If the owner fails to withhold the funds, then you can go after them for the amount owed. Keep in mind, that the obligation to withhold funds however only applies to amounts that have not already been paid. So if the owners has already paid out the entire contract balance, a stop payment notice will not do you any good. One of the main reasons to do a stop payment notice is that you can do so before your work on the project is complete. In contrast a lien may not be recorded unless you will not do any further work. Doing further work would invalidate the lien by not a stop payment notice. Another reason to give stop payment notice is that it actually precludes the direct contractor from getting paid and thus it is more likely to be resolved without the need for legal action. You also have more time to take legal action on a stop payment notice than a lien. (absent a notice of completion you have 180 days from project completion to file an action on your stop payment notice. In contrast you have only 90 days from recording your lien to file legal action. To schedule a free legal consultation email me at ryan@huntortmann.com

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Jul 7, 2020

I’m not sure why you’re not filing a mechanic’s lien against the property. That’s your best remedy. A stop payment notice attaches to the construction funds and is not generally used in this type of situation where the owner claims to have already paid the general contractor and no actual lender is involved. Since it’s a private job, you would need to pay for a bond to go with the stop payment notice which can be expensive, otherwise the stop payment notice couldn’t be enforced. Since you say you already did a preliminary notice, you should record your lien right away.

I also think it’s a good idea to make a claim against the GC’s license bond. As a subcontractor, you can recover up to $7,500 on the bond. You don’t need to file a lawsuit to recover on the license bond. You can call the bonding company and they will tell you if you need to write a letter or they will send you a form. It would help your claim if you can ask the owner to write you a letter saying that they already paid the GC for your work. The information on the license bond is on the CSLB website under the contractor’s name, and it will also show the name, address and telephone number for the bonding company.

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