What you Should know about Stop Notices

What you Should know about Stop Notices

What you Should know about Stop Notices

Before we dwell into the finer details, let us quickly do a recap of what exactly is a stop notice. A stop notice is a very invaluable tool specifically created to ensure that contractors don't get cheated out of their hard earned money. It is a legal document that directs the owner to set aside money owed to the contractor until the contractors claim gets paid. Almost all types of contractors have the right to file it at any time during the construction of the project should they believe their financial reimbursements are being unfairly withheld from them by the owner.

1. When to File a Stop Notice

A stop notice can be filed 90 days from the date of completion however in the rare event that the notice of completion is recorded, the deadline drops down to 30 days.

If an invoice has been sent out by your company and the due date has passed, then the first thing to do is call the contractor asking them why payment has not been made. If their reasons are unsatisfactory, or if payment is imminent, then you have the right to consider filing a stop notice.

An important thing to keep in mind is that filing this notice will put a claim on the remaining money for the construction fund. Therefore as a general rule of thumb, the sooner you file it, the more likely there is money left in the fund for your company to claim.

2. Documents Required For Filing

The documents needed to file depend on what type of contractor you are. If you are a sub contractor, you need the following pieces of information.

Contact information of the owner

Correct property Address

Copy of the contract

Change orders (if any)

If you are not in direct contract with the primary contractor, then you must file a 20-Day Preliminary Lien Notice. This notice has to be sent out before you provided any type of service to the construction project.

3. What Happens Afterwards

Once a stop notice is filed, the primary contractor or the owner has 90 days to respond to the claim. Failure to respond appropriately gives you the right to file a lawsuit and must seek the services of a competent lawyer.

Do not wait until the last minute to take your case to a lawyer. Give them at least two weeks to investigate the case and prepare the legal papers necessary for filing the lawsuit.

A stop notice is a power tool for contractors who are owed money for their services. When filing one, make sure to send it to the person working for the owner or primary contractor who is in charge of funds distribution. As a precaution, always send any such correspondence them through registered or certified mail with a return receipt request as proof.

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