On a private work with a construction lender, for a stop payment notice to bind the LENDER to withhold funds, the claimant generally must:
Explanation
Civil Code §8532 obligates a construction lender to withhold only on a bonded stop payment notice, accompanied by a surety bond of 125 percent of the claim; the bond protects the lender if the claim turns out to be bad. (a) is the closest trap: form and verification matter, but no amount of formality substitutes for the bond. (b) reverses the order — the notice works without going to court, which is why it is useful. (c) borrows mechanics lien practice, where recording is the operative act; a stop payment notice is served, not recorded. A notice to the owner under §8534 needs no bond.
Law Reference: Civil Code §8506 / §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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