On a PUBLIC works project, a subcontractor with unpaid invoices serves a 'stop payment notice' on the public entity under Civil Code §9358 (formerly known as a 'stop notice'). The effect is to:
Explanation
Civil Code §9350 et seq. (which replaced former §3179 et seq.) governs stop payment notices on public works. A proper stop notice served on the public entity requires it to withhold from remaining unpaid contract funds an amount sufficient to answer the claim plus reasonable costs of suit (typically 125% of the claim) until the dispute is resolved or the time to enforce expires. Mechanics' liens are NOT available on public property (sovereign immunity); the awarding body need not terminate the contract; and direct garnishment of bank accounts requires a separate judgment. The stop payment notice and the §9550 payment bond claim are the two primary remedies for unpaid subs on public works.
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