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Stop Notice or Mechanics Lien

We are not sure what is most appropriate to file. Our company was hired by Paramount Utility to perform a directional bore, pullback and place conduit. Paramount has a contract with Cox Communications - the owner of the utilities on that site. We filed our prelien and a notice of intent to lien. We have received no funds nor communication. Due to the fact the utilities themselves are owned by Cox Communications and we are not trying to lien a structure or piece of land, we are uncertain whether to file a stop notice or mechanics lien.

1 reply

May 29, 2020

You can do either. Any person entitled to record a lien is entitled to send a stop notice. Stop notices are much less effective if the project is almost complete and all/most of the proceeds from the construction loan have been disbursed. A stop notice served upon the owner requires the owner to hold from the prime contractor or anyone acting under the prime contractor's authority sufficient monies due or that become due to answer the Stop Notice claim. When served with a stop notice, a construction lender may, and when served with a bonded stop notice, a construction lender must, hold from any amounts due or that become due to the owner, the prime contractor or anyone acting under the prime contractor's authority sufficient monies to answer the stop notice claim. When you freeze up the money on the project, it gets people's attention quicker than a mechanic's lien. But, as noted above, the effectiveness depends on the circumstances and at what stage construction is at.

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