What is a Stop Notice?

A stop notice is a lien on construction funds.  A mechanics lien is a lien on a project owner's property.  On a private works project, a contractor can pursue both mechanics lien and stop notice remedies.  On a public works project, a contractor cannot file a mechanics lien, so the only remedy may be a stop notice.  Additionally, because a stop notice is a lien on funds, it may be preferable to a mechanics lien in some situations.

Information a Contractor Will Need to File a Stop Notice

• Obtain the legal description of the property 

• Determine the property owner's name and the extent of the owner's interest in the property 

• Determine whether the owner is the only individual requesting the improvement to the property and whether there are any other interested parties in the property, including lenders

• Determine the name of the construction lender 

Procedure for a Subcontractor to File a Stop Notice

Within 20 days of first furnishing labor or materials to the project, serve a Preliminary 20 Day Notice to the project owner, prime contractor and construction lender.

• Note: If you file a copy of the 20 day notice with the county recorder where the property is located, the county recorder will notify you when a Notice of Completion or Notice of Cessation is recorded for the property.

After work is completed on the project: 

• The project owner must wait at least 30 days after labor ceases on the project before filing a Notice of Completion 

• If the project owner records a Notice of Completion or Cessation, a subcontractor has 30 days to file a stop notice with the County Recorder. 

• Within 90 days, the subcontractor must file an action on the stop notice.  

• If the project owner does not record a Notice of Completion or Cessation and the owner uses the work of improvement or accepts improvement, then within 90 days of one of these events, a contractor must serve its stop notice. 

• Within 90 days of serving the stop notice, the contractor must file an action on the stop notice.  

Stop Notices: 

• Serve a stop notice on the owner and a bonded stop notice on the construction lender or the entity holding construction funds 

• If no mechanics lien has been recorded, and the surety on a payment bond has been recorded, the the notice must be served on the surety 

• File suit on the stop notice at the same time that a lien foreclosure action is filed on the mechanics lien 

Procedure for a Prime Contractor to File a Stop Notice

Within 10 days of completion, you can file a Notice of Completion

If the owner records a Notice of Cessation or a Notice of Completion

• Within 60 days, file a stop notice 

• Within 90 days, file an action on the stop notice 

If the owner does not record a Notice of Completion or Cessation

• If labor ceases and the owner uses the work of improvement or the owner accepts the improvement, within 90 days record a stop notice 

• Within 90 days file an action on the stop notice