Insurance & LiensQuestion 1477 of 1605
On a private work with a construction lender, for a stop payment notice to bind the LENDER to withhold funds, the claimant generally must:
a.Simply mail an informal letter to the lender
b.Obtain a court order first
c.Record the notice with the county recorder
d.Serve a bonded stop payment notice (accompanied by a bond of 1.25 times the claim) unless the lender voluntarily withholds
Explanation
Civil Code §8532 requires a stop payment notice to a construction lender to be 'bonded' — accompanied by a surety bond of 125% (1.25 times) of the claim — to obligate the lender to withhold funds. A stop notice to the owner does not require a bond.
Law Reference: Civ. Code §8506Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)