Our company has filed a stop notice on a general contractor that we are working for due to lack of payment.
Jul 16, 2018
Good question. Under § 9352(c) of the California Civil Code, regardless of whether a project is public (under § 9352(c) of the CA Civil Code) or private (under § 8502(c) of the CA Civil Code), a Stop Payment Notice may only include "the amount due the claimant for work provided through the date of the notice." Thus, if a retainage amount has not yet become due (because it is being property withheld), including properly retained amounts in a Stop Payment Notice might not be a great idea. If an amount is being improperly withheld as retainage, and the retained amount does represent an amount that is due at the date of the notice, then including retained amounts would seem like an appropriate move. Of course, under § 8128, a claimant has the ability to reduce the amount of their stop payment notice (or to release the notice in its entirety) relatively easily, so if retainage is included and disputed, a claimant should be able to reduce their claim without much struggle. But the safest option is probably to limit a Stop Payment Notice merely to amounts that are currently due and owing (and not being properly withheld) at the time the notice is sent.