Insurance & LiensQuestion 1476 of 1632

A 'stop payment notice' (formerly 'stop notice') is a remedy that allows an unpaid claimant to reach:

a.Money the CSLB holds from the contractor's $25,000 license bond
b.The owner's equity in the property, through a forced sale
c.Any bank account the contractor holds, by direct levy
d.Undisbursed construction funds held by the owner or the lender

Explanation

A stop payment notice under Civil Code §8500 et seq. directs the owner, or a bonded notice directs the construction lender, to withhold money not yet paid out and hold it against the claim; §8534 sets the owner's duty to withhold. (a) confuses two securities — a claim on the §7071.6 license bond is made against the surety, not through a stop payment notice. (b) describes the mechanics lien, which attaches to the property itself; the point of the stop payment notice is that it reaches the money instead. (c) assumes a levy right that only a judgment creditor has.

Law Reference: Civil Code §8500 et seq. / §8534

This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →

Practice all 1632 questions free — no signup required.

Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →

Related questions on this topic

Last reviewed: · editorial process

PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)
Report