STOP-NOTICE DEMAND TO WITHHOLD PAYMENT PENDING LIEN RESOLUTION
(Georgia Mechanics and Materialmen’s Lien Law – O.C.G.A. § 44-14-361 et seq.)
[// GUIDANCE: Replace every bracketed [PLACEHOLDER] with matter-specific information, delete guidance comments before final issuance, and confirm statutory deadlines for service and filing.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Title. STOP-NOTICE DEMAND TO WITHHOLD PAYMENT PENDING LIEN RESOLUTION.
1.2 Parties.
a. Claimant (Unpaid Party): [CLAIMANT LEGAL NAME], a [STATE] [ENTITY TYPE], having its principal place of business at [ADDRESS].
b. Owner: [OWNER LEGAL NAME], of [ADDRESS].
c. Prime Contractor: [CONTRACTOR LEGAL NAME], of [ADDRESS].
d. Construction Lender (if any): [LENDER LEGAL NAME], of [ADDRESS].
1.3 Project. The project known as “[PROJECT NAME]” located at [PROJECT ADDRESS / LEGAL DESCRIPTION] (“Project”).
1.4 Consideration & Purpose. Claimant has furnished labor, services, equipment, and/or materials (collectively, “Work”) for the improvement of the Project and is unpaid in the amount of $[AMOUNT]. Pursuant to O.C.G.A. § 44-14-361 et seq., Claimant issues this Stop-Notice to compel the withholding of sufficient contract funds to secure payment and preserve lien rights.
1.5 Effective Date & Jurisdiction. This Stop-Notice is effective as of [DATE] and is governed by the laws of the State of Georgia (“Governing Law”).
2. DEFINITIONS
For purposes of this Stop-Notice, the following terms have the meanings set forth below; capitalized terms not defined herein have the meanings assigned in the Georgia lien statutes.
“Bond” – A statutory bond posted under O.C.G.A. § 44-14-364 to discharge any lien or Stop-Notice claim.
“Claim Amount” – $[AMOUNT], representing the unpaid balance for Work performed through [LAST DATE OF WORK].
“Claimant” – The party identified in Section 1.2(a).
“Contract Funds” – Any amounts currently due or to become due from Owner or Lender to the Prime Contractor on account of the Project contract.
“Stop-Notice” – This written demand to withhold Contract Funds pending resolution of Claimant’s lien rights.
3. OPERATIVE PROVISIONS
3.1 Issuance of Stop-Notice. Claimant hereby demands that Owner and, if applicable, Lender immediately withhold Contract Funds equal to the Claim Amount, plus twenty-five percent (25%) for potential interest, costs, and attorneys’ fees (“Withheld Sum”), until (a) Claimant is paid in full, (b) a court of competent jurisdiction orders otherwise, or (c) Claimant executes a written Release of Stop-Notice in accordance with Section 3.6.
3.2 Basis for Demand.
a. Claimant timely furnished Work pursuant to a subcontract with Prime Contractor dated [SUBCONTRACT DATE].
b. Claimant last furnished Work on [LAST DATE OF WORK].
c. The Claim Amount remains due and owing despite repeated demand.
3.3 Statutory Compliance. This Stop-Notice is intended to operate in tandem with Claimant’s rights under:
• O.C.G.A. § 44-14-361 (creation of lien);
• O.C.G.A. § 44-14-361.3 (Notice to Contractor/Owner requirements); and
• O.C.G.A. § 44-14-364 (bond to discharge lien).
[// GUIDANCE: If a Notice of Commencement was filed, confirm delivery of a Notice to Contractor/Owner within 30 days after first furnishing under § 361.3.]
3.4 Delivery & Service. Claimant shall serve this Stop-Notice by (i) certified mail, return receipt requested, (ii) statutory overnight delivery, or (iii) personal delivery with sworn affidavit of service. Service is deemed complete upon the earliest of (a) actual receipt, or (b) three (3) business days after deposit for certified mail.
3.5 Bond to Discharge Stop-Notice. Owner or Prime Contractor may discharge the Withheld Sum by posting a Bond in compliance with O.C.G.A. § 44-14-364 in the penal sum of the Claim Amount plus fifteen percent (15%) to secure costs and interest. Upon verified receipt of such Bond, Claimant shall execute a conditional Release of Stop-Notice limited to the Bond.
3.6 Release Procedures. Claimant shall deliver a written Release of Stop-Notice (i) within five (5) business days after confirmed payment in full of the Claim Amount (funds cleared), or (ii) upon posting of a statutory Bond as described in Section 3.5. Failure to release after satisfaction constitutes a material breach and subjects Claimant to statutory damages.
3.7 Preservation of Additional Remedies. Nothing herein waives Claimant’s right to (a) file a Claim of Lien within ninety (90) days after last furnishing Work, (b) commence suit to foreclose such lien within 365 days of lien filing, or (c) pursue any other contract, statutory, or equitable remedy.
4. REPRESENTATIONS & WARRANTIES
4.1 Claimant represents and warrants that:
a. The Claim Amount is a true and correct statement of the sum presently due and owing.
b. All required licenses and registrations to perform the Work were valid at all relevant times.
c. Claimant has not received payment, nor has any right to payment been assigned or waived except as disclosed in writing to Owner.
4.2 Survival. These representations and warranties survive any payment or release given in connection with this Stop-Notice.
5. COVENANTS & RESTRICTIONS
5.1 Claimant shall furnish, upon written request, reasonable documentation substantiating the Claim Amount, including invoices, delivery tickets, certified payrolls, and sworn statements.
5.2 Owner and Prime Contractor shall cooperate in good faith to resolve the Claim Amount, including facilitating joint-check payment, direct payment, or statutory Bonding.
5.3 Each party shall promptly notify the others of any action, arbitration, or court proceeding affecting the Project that may impact the rights or obligations stated herein.
6. DEFAULT & REMEDIES
6.1 Events of Default.
a. Owner’s or Lender’s failure to withhold the Withheld Sum after proper service;
b. Claimant’s failure to release this Stop-Notice after full payment or bonding;
c. Any materially false statement by a party in connection with this Stop-Notice.
6.2 Cure Period. The defaulting party shall have five (5) business days after receipt of written notice specifying the default to cure the same.
6.3 Remedies.
a. Specific performance compelling withholding or release;
b. Injunctive relief;
c. Actual damages, including statutory interest under O.C.G.A. § 7-4-16;
d. Reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Indemnification. To the fullest extent permitted by law, the party whose default or wrongful act gives rise to a third-party claim shall indemnify, defend, and hold harmless the non-defaulting parties from and against all liabilities, losses, and expenses (including attorneys’ fees) arising therefrom.
7.2 Limitation of Liability. Except for willful misconduct or fraud, a party’s aggregate liability under this Stop-Notice shall not exceed the Withheld Sum actually at risk with respect to that party (“Liability Cap”).
7.3 Insurance. Each party shall maintain in force insurance customary for its business and sufficient to cover its indemnity obligations herein.
7.4 Force Majeure. No party shall be liable for delay or failure in performance to the extent caused by events beyond its reasonable control, provided prompt written notice is given and diligent efforts are undertaken to resume performance.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Stop-Notice and any related dispute shall be governed by and construed in accordance with the laws of the State of Georgia, including its lien statutes and conflict-of-laws principles.
8.2 Forum Selection. The parties submit to the exclusive jurisdiction of the state courts situated in [COUNTY], Georgia (“Designated Court”).
8.3 Arbitration & Jury Trial. Arbitration is not applicable. Nothing herein constitutes a waiver of any constitutional right to jury trial.
8.4 Injunctive Relief. The parties acknowledge that failure to withhold the Withheld Sum may cause irreparable harm not compensable by money damages alone; therefore, injunctive relief is an appropriate and necessary remedy without requirement to post bond, to the extent permitted by law.
9. GENERAL PROVISIONS
9.1 Amendments & Waivers. Any amendment or waiver of this Stop-Notice must be in a writing signed by the party to be bound.
9.2 Assignment. No party may assign or delegate its rights or obligations hereunder without prior written consent of the other parties, except as required to perfect a security interest.
9.3 Successors & Assigns. Subject to Section 9.2, this Stop-Notice binds and benefits the parties and their respective successors and permitted assigns.
9.4 Severability. If any provision is adjudged invalid, the remaining provisions shall remain in effect to the maximum extent permitted by law.
9.5 Integration. This Stop-Notice constitutes the entire agreement among the parties concerning the withholding of Contract Funds and supersedes all prior or contemporaneous communications on that subject.
9.6 Counterparts; Electronic Signatures. This document may be executed in counterparts, each of which is deemed an original. Signatures transmitted by facsimile, PDF, or any electronic signature service compliant with the Uniform Electronic Transactions Act shall be effective to bind the signing party.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the undersigned have executed this Stop-Notice effective as of the date set forth in Section 1.5.
| CLAIMANT | OWNER |
|---|---|
| By: _______ | By: _______ |
| Name: [PRINT NAME] | Name: [PRINT NAME] |
| Title: [TITLE] | Title: [TITLE] |
| Date: [DATE] | Date: [DATE] |
| PRIME CONTRACTOR (Receipt Acknowledgement) | CONSTRUCTION LENDER (Receipt Acknowledgement) |
|---|---|
| By: _______ | By: _______ |
| Name: [PRINT NAME] | Name: [PRINT NAME] |
| Title: [TITLE] | Title: [TITLE] |
| Date: [DATE] | Date: [DATE] |
NOTARY ACKNOWLEDGMENT
State of [STATE] )
County of [COUNTY] )
On this ___ day of ____, 20__, before me, the undersigned notary public, personally appeared [NAME OF SIGNATORY], who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to this instrument and acknowledged that he/she executed the same in his/her authorized capacity, and that by his/her signature the instrument was executed for the purposes therein stated.
Witness my hand and official seal.
Signature: _______
Notary Public, State of [STATE]
My commission expires: [DATE]
[// GUIDANCE: 1) File the underlying Claim of Lien within 90 days of last furnishing if payment remains outstanding. 2) Serve Claim of Lien on Owner/Contractor within 2 business days of filing. 3) Suit to enforce must commence within 365 days of lien filing. 4) Always verify current statutory text before final issuance.]