Stop Notice
A claim that traps unpaid contract funds before they're disbursed.
What it means
A stop notice (or stop payment notice) is a claim an unpaid subcontractor or supplier serves on the owner or construction lender, demanding that funds be withheld from the general contractor to cover the claim. Where available, it reaches the money itself — undisbursed contract or loan funds — rather than the property, making it a companion remedy to the mechanics lien. Availability, bonding requirements, and procedures vary by state.
Why it matters before you sign
On a heavily financed project, undisbursed loan funds can be easier to reach than the property — where stop notices exist, they can freeze money that would otherwise be gone by the time a lien is enforced.
In a contract, it looks like this
After two unpaid invoices, the glazing sub served a stop notice on the construction lender, freezing funds owed to the GC.
This definition is a general, educational explanation — not legal advice. XOsign provides AI-assisted document tools and does not provide legal advice; consider consulting a qualified attorney for guidance on your specific situation. Requirements vary by state.
See any term explained in your own document.
Upload an agreement and XOsign walks you through every clause in plain language — before you sign, not after.