STOP PAYMENT NOTICE AND DEMAND TO WITHHOLD CONSTRUCTION FUNDS

(Florida – Private Project)

[// GUIDANCE: This template is intended for use by a lienor (e.g., subcontractor, supplier, or laborer) to demand that the Owner and/or Construction Lender withhold undistributed contract funds until the underlying lien claim is resolved. Florida’s Construction Lien Law (Fla. Stat. ch. 713, pt. I) does not expressly establish a “stop-notice” procedure; however, Owners are obligated to protect lienors’ interests and may be held liable for wrongful disbursement of project funds. This form therefore functions as an enhanced statutory notice coupled with contractual undertakings aimed at freezing remaining payments pending satisfaction, bonding-off, or release of the lien. Counsel should tailor the document to the project’s contractual matrix and confirm compliance with all statutory deadlines (e.g., 45-/90-day notice windows, 1-year lien foreclosure period, etc.).]

TABLE OF CONTENTS

I. Document Header ............................................................... 2
II. Definitions ..................................................................... 3
III. Operative Provisions ............................................................ 4
IV. Representations & Warranties .................................................... 6
V. Covenants & Release Procedures .................................................. 7
VI. Default & Remedies .............................................................. 8
VII. Risk Allocation ................................................................ 9
VIII. Dispute Resolution ............................................................ 10
IX. General Provisions .............................................................. 11
X. Execution Block ................................................................. 12

Appendix A – Statement of Account
Appendix B – Affidavit of Service

I. DOCUMENT HEADER

1. Parties.
   a. “Claimant/Lienor”: [NAME], a [STATE] [ENTITY TYPE], whose principal place of business is [ADDRESS].
   b. “Owner”: [NAME], whose address is [ADDRESS] (“Owner”).
   c. “Contractor”: [NAME], a [STATE] [ENTITY TYPE], whose address is [ADDRESS] (“Contractor”).
   d. “Construction Lender” (if applicable): [NAME], whose address is [ADDRESS] (“Lender”).
   e. “Surety” (if bond already in place): [NAME], whose address is [ADDRESS] (“Surety”).

2. Effective Date. This Stop Payment Notice (“Notice”) is effective as of [DATE] (“Effective Date”).

3. Project Identification.
   a. Project Name: [PROJECT NAME].
   b. Property Description: [LEGAL DESCRIPTION OR FOLIO NO.].
   c. Direct Contract Amount: $[●].

4. Jurisdiction & Governing Law. This Notice shall be construed in accordance with the Florida Construction Lien Law, Fla. Stat. ch. 713, pt. I, and other applicable Florida law. Exclusive venue for any action arising hereunder shall lie in the state courts of [COUNTY], Florida.

II. DEFINITIONS

For purposes of this Notice, the following capitalized terms have the meanings set forth below; terms defined in the singular include the plural and vice versa.

“Bond” means any payment or lien-transfer bond posted pursuant to Fla. Stat. § 713.23 or § 713.24, as applicable.

“Claim Amount” means $[CLAIM AMOUNT], representing the unpaid balance for labor, services, and/or materials furnished by Claimant to the Project through [LAST DATE OF FURNISHING].

“Conditional Release” means a release of lien or claim conditioned upon actual receipt of collected funds, substantially in the form required by Fla. Stat. § 713.20(4).

“Final Release” means an unconditional release of lien or claim, effective upon clearance of payment or posting of an acceptable Bond.

“Lienor” is used interchangeably with “Claimant” and has the meaning set forth in Fla. Stat. § 713.01(18).

“Notice of Commencement” means the recorded notice under Fla. Stat. § 713.13 applicable to the Project.

“Stop Payment Period” means the time beginning on the Owner’s/Lender’s receipt of this Notice and terminating upon (i) Claimant’s written acknowledgement of full payment, (ii) posting of a Bond satisfying § 713.24, or (iii) entry of a final, non-appealable court order disposing of the Claim Amount.

[// GUIDANCE: Add or delete defined terms to match project particulars.]

III. OPERATIVE PROVISIONS

3.1 Notice of Claim.
a. Claimant hereby gives formal notice that it has not been paid the Claim Amount for labor, services, and/or materials furnished to the Project pursuant to its subcontract with Contractor dated [SUBCONTRACT DATE].
b. Claimant has timely served all prerequisite notices, including its Notice to Owner dated [DATE NTO SERVED], and (if applicable) Notice of Nonpayment to Surety dated [DATE].

3.2 Demand to Withhold Funds. Pursuant to Fla. Stat. §§ 713.06 and 713.13, Claimant demands that Owner and Lender immediately withhold from disbursement an amount not less than the Claim Amount, plus reasonable attorneys’ fees, interest, and allowable costs, from any undisbursed contract funds, retainage, or loan proceeds related to the Project.

3.3 Claim Amount & Accounting. The Claim Amount is supported by the sworn Statement of Account attached hereto as Appendix A.

3.4 Supporting Documentation. Concurrently with serving this Notice, Claimant is providing copies of (i) invoices, (ii) delivery tickets, (iii) time sheets, and (iv) partial releases previously issued.

3.5 Conditions Precedent. Claimant acknowledges that Owner’s and Lender’s duties under this Notice are subject to receipt of (i) a valid Notice of Commencement and (ii) verification that Claimant’s notices were timely and properly served.

3.6 Duration. The Stop Payment Period shall continue until terminated pursuant to Section 5.3.

IV. REPRESENTATIONS & WARRANTIES OF CLAIMANT

4.1 Corporate Authority. Claimant is duly organized, validly existing, and in good standing under the laws of its formation, with authority to transact business in Florida.

4.2 Valid Claim. Claimant represents that:
a. it has furnished labor, services, and/or materials to the Project;
b. the Claim Amount is presently due and owing;
c. all statutory notices have been served within prescribed time limits; and
d. no part of the Claim Amount has been paid, waived, or otherwise satisfied.

4.3 No Material Misstatements. The information contained in this Notice and Appendix A is true, correct, and complete in all material respects.

4.4 Survival. The foregoing representations and warranties shall survive payment, bonding-off, and/or resolution of the Claim Amount.

V. COVENANTS & RELEASE PROCEDURES

5.1 Owner/Lender Covenants. Owner and Lender covenant to:
a. Segregate and withhold the Claim Amount (plus a prudent reserve for fees and interest) from further disbursement;
b. Refrain from making payments to Contractor or any downstream party in derogation of Claimant’s rights; and
c. Provide Claimant with written confirmation of the amount withheld within five (5) business days of receipt of this Notice.

5.2 Bonding-Off Option. Contractor, Owner, or Surety may discharge the claim by posting a Bond in accordance with Fla. Stat. § 713.24, in which event the funds withheld under Section 5.1 may be released.

5.3 Release of Notice.
a. Conditional Release. Upon receipt of certified funds covering the undisputed portion of the Claim Amount, Claimant shall deliver a duly executed Conditional Release.
b. Final Release. Upon (i) clearance of all funds due (including attorneys’ fees and interest, if any) or (ii) posting and recording of a Bond, Claimant shall record a Final Release within five (5) business days.

5.4 Cooperation. The parties shall provide reasonable cooperation, documentation, and signatures necessary to effectuate bonding-off and release procedures.

VI. DEFAULT & REMEDIES

6.1 Events of Default. The following constitute events of default:
a. Owner or Lender’s failure to withhold funds as required herein;
b. Contractor’s failure to post a Bond or otherwise resolve the Claim Amount within thirty (30) days of this Notice;
c. Any material misrepresentation by Claimant with respect to the Claim Amount.

6.2 Cure Periods.
a. Owner/Lender shall have five (5) business days after written notice of default to commence withholding.
b. Contractor shall have thirty (30) days to post a Bond or pay the Claim Amount.

6.3 Remedies. Upon default and expiration of any applicable cure period, Claimant may pursue any combination of the following, in its sole discretion:
a. Foreclose its lien under Fla. Stat. § 713.21;
b. File suit against Contractor and/or Surety on any payment or lien-transfer Bond;
c. Seek injunctive relief compelling Owner/Lender to withhold funds;
d. Recover attorneys’ fees, costs, and interest as authorized by Fla. Stat. § 713.29.

6.4 Attorneys’ Fees & Costs. The prevailing party in any litigation or arbitration arising out of or related to this Notice shall be entitled to recover its reasonable attorneys’ fees, court costs, and expenses.

VII. RISK ALLOCATION

7.1 Indemnification (Bonding Requirements). To the extent permitted by law, Contractor agrees to indemnify, defend, and hold harmless Owner and Lender from and against all claims, damages, and expenses (including attorneys’ fees) arising out of or resulting from Contractor’s failure to pay Claimant, provided that Contractor’s liability under this Section 7.1 shall be satisfied in full by posting a Bond that complies with Fla. Stat. § 713.24.

7.2 Limitation of Liability (Payment Withheld). Owner’s and Lender’s liability to Contractor for sums withheld in good-faith compliance with this Notice shall be limited to the net amount actually withheld. Contractor waives all claims for consequential or special damages attributable to Owner’s or Lender’s compliance with this Notice.

7.3 Force Majeure. No party shall be liable for delays or failures in performance to the extent caused by events beyond its reasonable control (e.g., acts of God, governmental actions, or labor disputes), provided that such party promptly notifies the others and resumes performance when able.

VIII. DISPUTE RESOLUTION

8.1 Governing Law. This Notice and any dispute arising herefrom shall be governed by the laws of the State of Florida, without regard to conflicts-of-law principles.

8.2 Forum Selection. The parties irrevocably submit to the exclusive jurisdiction of the state courts sitting in [COUNTY], Florida.

8.3 Arbitration. Not applicable.

8.4 Jury Waiver. Not applicable.

8.5 Injunctive Relief. Nothing herein shall limit Claimant’s right to seek temporary, preliminary, or permanent injunctive relief to enforce the payment stoppage contemplated by this Notice.

IX. GENERAL PROVISIONS

9.1 Amendments & Waivers. Any amendment to or waiver of this Notice must be in writing and signed by the party against whom enforcement is sought.

9.2 Assignment. Claimant may assign its rights under this Notice to its surety, factoring company, or successor in interest upon written notice to Owner. No other party may assign or delegate its rights or obligations hereunder without Claimant’s prior written consent.

9.3 Successors & Assigns. This Notice shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

9.4 Severability. If any provision of this Notice is deemed unenforceable, such provision shall be reformed to the minimum extent necessary to render it enforceable, and the remaining provisions shall remain in full force and effect.

9.5 Integration. This Notice, together with its appendices, constitutes the entire agreement and understanding among the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications.

9.6 Counterparts; Electronic Signatures. This Notice may be executed in any number of counterparts, each of which shall be deemed an original. Signatures transmitted electronically (e.g., via PDF or approved e-signature platform) shall be deemed original and enforceable.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the undersigned Claimant has executed this Stop Payment Notice as of the Effective Date.

[// GUIDANCE: Add notary block if you intend to record the Notice or if the Owner/Lender requests a sworn statement.]

CLAIMANT/LIENOR:
[NAME OF CLAIMANT]

By: _______
Name: [AUTHORIZED SIGNATORY]
Title: [●]
Date: [●]

ACKNOWLEDGED (for receipt only):

OWNER:
[NAME OF OWNER]

By: _______
Name: [AUTHORIZED SIGNATORY]
Title: [●]
Date: [●]

CONTRACTOR:
[NAME OF CONTRACTOR]

By: _______
Name: [AUTHORIZED SIGNATORY]
Title: [●]
Date: [●]

LENDER (if any):
[NAME OF LENDER]

By: _______
Name: [AUTHORIZED SIGNATORY]
Title: [●]
Date: [●]

Appendix A

STATEMENT OF ACCOUNT

1. Invoice Nos.: [LIST]
2. Dates of Furnishing: [FROM] to [TO]
3. Original Contract/PO Amount: $[●]
4. Approved Change Orders: $[●]
5. Previously Paid: ($[●])
6. RETAINAGE HELD: $[●]
7. CLAIM AMOUNT DUE: $[●]

Sworn to and subscribed before me this ___ day of ____, 20__, by [NAME], who is personally known ☐ / produced ID ☐.

[NOTARY PUBLIC]

Appendix B

AFFIDAVIT OF SERVICE

I, [NAME], being duly sworn, state that on [DATE], I served the foregoing Stop Payment Notice on the following parties by the method indicated below:

1. Owner – [NAME & ADDRESS] – ☐ Certified Mail / ☐ Hand Delivery / ☐ Other
2. Contractor – [NAME & ADDRESS] – ☐ Certified Mail / ☐ Hand Delivery / ☐ Other
3. Lender – [NAME & ADDRESS] – ☐ Certified Mail / ☐ Hand Delivery / ☐ Other
4. Surety – [NAME & ADDRESS] – ☐ Certified Mail / ☐ Hand Delivery / ☐ Other

[NAME OF AFFIANT]

Sworn to and subscribed before me this ___ day of ____, 20__, by [NAME], who is personally known ☐ / produced ID ☐.

[NOTARY PUBLIC]

[// GUIDANCE:
1. Verify that the Claim Amount falls within undisbursed contract funds; an Owner who withholds beyond that sum risks breach of contract.
2. Serve this Notice by a method that provides verifiable proof of delivery (certified mail, return receipt requested; statutory overnight delivery; or personal service).
3. Track statutory deadlines: (i) Notice to Owner within 45 days of first furnishing, (ii) Claim of Lien within 90 days of last furnishing, and (iii) foreclosure within 1 year of recording.
4. If the Contractor promptly posts a lien-transfer bond, file suit on the bond—not the property.
5. Consider contemporaneously recording a Claim of Lien to perfect your security interest in the property.]