🛑 Stop Notice

What is a Stop Notice?

A Stop Notice (also called a "Notice to Withhold Funds") is a legal document that freezes construction funds held by the property owner or lender. Unlike a mechanics lien which attaches to the property, a stop notice attaches to the money itself, preventing the owner or lender from releasing funds to the general contractor until your claim is resolved.

Where It's Available

Stop notices are not available in all states. They're most commonly used in:

• California
• Alaska
• Arizona
• Washington
• Nevada
• Some other western states

In states without stop notice laws, you must rely on mechanics liens or bond claims.

Why Use a Stop Notice?

• Freezes funds: Prevents money from being paid out to others
• Faster than liens: Can be more immediate than filing a mechanics lien
• Public projects: Often the only remedy on public jobs (where liens aren't allowed)
• Pressure: Creates immediate pressure to resolve payment issues

Who Can File

• Subcontractors
• Material suppliers
• Laborers
• Anyone who furnished labor or materials to the project

Note: General contractors typically cannot file stop notices against the owner. They must use mechanics liens.

When to File

• When payment is overdue and you suspect funds are running low
• Before the owner makes final payment to the GC
• Within your state's deadline (varies by state)
• As soon as you realize there may be a payment problem

How It Works

1. File the stop notice: with the property owner, lender, or public entity
2. Funds are frozen: the recipient must withhold enough to cover your claim
3. Owner/GC responds: they must either pay you or dispute the claim
4. Resolution: either payment is released to you, or the dispute goes to court

Stop Notice vs. Mechanics Lien