A stop payment notice (often just “stop notice”) lets an unpaid subcontractor or supplier reach the money before it’s spent. Instead of attaching the property like a mechanics lien, the claimant serves notice on the owner or the construction lender, who must then hold back enough of the remaining project funds to cover the claim. California calls it a stop payment notice; a few other states have similar tools under different names.
On public work, where liens on the property usually aren’t allowed, the stop notice (alongside a claim on the payment bond) is one of the main remedies for unpaid lower tiers. On private work it runs alongside lien rights. A bonded stop notice served on a lender, where the claimant posts its own bond, usually carries more force than an unbonded one.
Why it matters
A stop notice freezes cash. The GC’s next draw can come in short by the claimed amount until the dispute is resolved, released or bonded around, even if the GC disputes the claim. That squeezes cash for every other trade on the job.
Common mistakes
- Subs skipping the preliminary notice, which is often a prerequisite.
- GCs ignoring a stop notice until the draw arrives short.
- Paying the claimant directly without getting a written release of the notice.
- Missing the statutory deadline to file suit to enforce it.
How os.construction handles it
We’re building compliance tracking so notices, waivers and payment status for each sub sit on the same record as the pay app, which makes withheld amounts visible before the draw. It’s in development.