Stop Notices: Public v. Private
A stop notice is a lien on money. If your project is a private work the lien would attach to the funding source, provided that the stop notice is accompanied by a bond. If your project is a public works project, the lien would attach to the funding source without the need for a bond. Below is a summary of the steps that must be taken to protect stop notice rights.
Step
Preliminary 20-day notice
Who must serve the notice?
Who must be served?
Serving the Stop Notice
When?
Is a bond required?
Is a lawsuit required to perfect the Stop Notice?
When must the lawsuit be filed?
After filing suit what other steps are required?
Private Works
Most claimants should serve the notice within 20 days of their work beginning.
Most claimants unless they have a direct contract with the owner of the land. One court has held the lender must receive the notice.
Owner or Reputed Owner, Contractor, Lender
If a notice of cessation or completion was properly recorded, within 60 days for prime contractors, within 30 days for others.
If no notice of cessation or completion is recorded, 90 days after completion or 150 days after a continuous cessation of labor.
Yes
Yes
Within 90 days of the end of the stop notice filing period.
It is good practice for the claimant to record a lis pendens
Public Works
Most claimants must serve a notice within 20 days of beginning work.
Most claimants unless they have a direct contract with the prime contractor.
The public agency concerned
If a notice of completion or acceptance, within 30 days
If no notice of completion or acceptance, within 120 days after work ceases.
No
Yes
Ten days after service of the stop notice and no later than 90 days after the end of the stop notice filing period.
The stop notice claimant must notify the public entity of the filing of the lawsuit within 5 days of the filing.
This is, by no means, a complete discussion of the stop notice remedy. Many other factors affect a claimant’s right to recover with the stop notice. Generally, it is our policy to have our clients take these basic steps at the earliest opportunity. Please consult counsel if you have questions.
