July 1, 2012, brings a new set of laws for Preliminary Notices, Stop Payment Notices, Mechanics’ Liens, Payment Bonds. Among these new statutes are statutes relating to Stop Payment Notices and Stop Work Notices, but missing are statutes relating to Stop Notices. Why?
For years, claimants have been serving Stop Notices, both bonded and unbonded on both private and public projects. As of July 1, 2012, the Stop Notice remedy will cease to exist. In its place, are new statutes that refer to a new remedy- Stop Payment Notice.
There is no need to panic. This new remedy is based on the old Stop Notice remedy and has many of the same requirements and time periods.
To take advantage of this remedy, a claimant must comply with a variety of code sections found in the Civil Code beginning with section 8000. These statutes outline the contents of the notice, the mailing requirements and the Statute of Limitations on both private and public projects. A careful reading of the statutes is necessary as some statute relate to both public and private projects and other statutes relate to either public or private projects.
Although it is not possible to spell out all the laws and requirements of the Stop Payment Notice remedy, what follows are some of the highlights.
For private projects, all Claimants must serve a Preliminary Notice to the lender. On public projects, only those without a direct contract with the direct contractor need to serve a Preliminary Notice.
The contents of the Stop Payment Notice are outlined in Civic Code sections 8102 and 9352 and include the name and address of the owner, direct contractor, construction lender (if private) and party for whom work was performed, a job site address, an estimate of claimant’s demand, a general description of the work provided and the name and address of the claimant. In addition, the Stop Payment Notice be signed and verified by the Claimant.
Service of a Stop Payment Notice must be done in accordance with the new statutes and are different for both public and private projects.
In addition to the above requirements, there are statutes that relate to which parties the claimant may serve with a Stop Payment Notice; statutes relating to serving a bonded Stop Payment Notice; statutes relating the legal obligations of the party that receive the Stop Payment Notices; statutes relating to the time periods to serving and enforcing a Stop Payment Notice; and statutes relating to release bonds.
The foregoing is general advice and should not be substituted for a careful review of all of the facts and laws relating to your claim. To determine and take advantage of all available remedies, and comply with applicable you should discuss your specific situation with an experienced construction attorney.
Robert A. Weissman can be reached by phone at (805) 371-0500 ext. 1 or by email to raw4law@verizon.net