On a private work of improvement, a supplier serves a stop payment notice on the construction lender. To make the notice "bonded" so the lender is obligated to withhold funds, the supplier should provide a bond equal to:
a.100% of the claim
b.125% of the amount of the claim
c.150% of the claim
d.10% of the project's total value
Explanation
Under Civil Code §8506, a stop payment notice served on a construction lender must be accompanied by a bond of 125% of the claim amount to obligate the lender to withhold funds. The bond protects the lender if the claim is later found invalid.
Law Reference: Civil Code §8532This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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