Stop Notice

Definition

A stop notice is a charge against construction funds in the hands of a property owner or a construction lender for the value of work or materials incorporated into a construction project.

Purpose

The purpose of a stop notice is to secure payment for contractors, subcontractors, and suppliers by ensuring funds are available for completed work or delivered materials, protecting them from non-payment.

Examples of Use

• A contractor files a stop notice to claim payment for work completed on a construction project.
• Suppliers issue stop notices to secure payment for materials delivered to the job site.
• Subcontractors use stop notices to ensure they receive payment for their services before the project's funds are depleted.

Related Terms

• Mechanic's Lien: A legal claim against a property for unpaid work or materials.
• Construction Bond: A guarantee that a contractor will complete a project according to the terms of the contract.
• Payment Application: A request for payment submitted by a contractor for completed work or delivered materials.

Notes

Stop notices provide an additional layer of financial security for construction professionals, ensuring they are compensated for their contributions to a project.