Stop Notice
A stop notice is a charge against construction funds to secure payment for work or materials, protecting contractors, subcontractors, and suppliers from non-payment.
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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.
Related Terms
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