A legal demand that forces the property owner or lender to hold back funds to ensure an unpaid party gets paid.
A stop notice is a statutory remedy available in some states (notably California) that requires a property owner or lender to withhold sufficient funds from the borrower or general contractor to cover the amount claimed by an unpaid subcontractor or supplier. Unlike a mechanic's lien, which attaches to the property itself, a stop notice attaches to the construction funds. A stop notice can be filed even on leasehold interests where a mechanic's lien may not be available.
A masonry subcontractor owed $95,000 serves a stop notice on the construction lender, requiring the lender to withhold $95,000 from future loan disbursements until the claim is resolved.
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