Stop-Notice - Hawaii

OWNER-RETENTION REQUEST AFTER MECHANIC'S LIEN FILING

(Hawaii — HRS § 507-48)

IMPORTANT LIMITATION

HRS chapter 507 does not establish a standalone claimant-enforced “stop payment notice.” HRS § 507-48 says that when work or material for which a lien is filed was furnished to a contractor, the owner may retain from amounts payable to that contractor enough to cover amounts due or to become due to the persons who filed the lien.

This document is therefore a request directed to the property owner after the circuit-court Application and Notice has been filed. It does not compel retention, bind a construction lender or disbursing agent, create a lien, enlarge the filed claim, or replace any court filing, service, hearing, Land Court, demand, or enforcement step.

1. CLAIM AND PROJECT INFORMATION

2. STATUTORY FILING CHECKLIST

Complete from the court file; do not use this request to cure an omitted or late statutory step.

• ☐ The claim is for qualifying labor or material under HRS § 507-42.
• ☐ Each required contractor was licensed when the improvements were made or performed, and the residential-material limitations in HRS § 507-49 were reviewed.
• ☐ An Application for a Lien and written Notice of Lien satisfying HRS § 507-43(a) were filed in the circuit where the property is situated.
• ☐ The Application and Notice were filed no later than 45 days after the statutory date of completion under HRS § 507-43(b), (f), and (g).
• ☐ The owner, persons with an interest in the property, the contracting party, and the general contractor received the service required by HRS § 507-43(a), or a permitted posting was completed for a person who could not be served.
• ☐ Return-day hearing date: [__/__/____]. The return date is not less than three or more than ten days after service.
• ☐ Court status: ☐ hearing pending ☐ probable-cause order entered on [__/__/____] ☐ lien denied or reduced.
• ☐ If registered land is affected and the lien is not solely against the specified time-share leasehold interest, the certified Order Directing Lien to Attach was filed with the assistant registrar within seven days after entry.
• ☐ Enforcement deadline calendared: [__/__/____]. Under HRS § 507-43(e), the lien expires three months after entry of the Order Directing Lien to Attach unless enforcement proceedings begin within that time.

3. REQUEST TO PROPERTY OWNER

Date: [__/__/____]

To: [OWNER NAME AND ADDRESS]

Re: Filed mechanic's or materialman's lien application — [PROJECT / PROPERTY / CASE NUMBER]

The Claimant states that the circuit-court Application and Notice identified above has been filed for labor or material furnished to [CONTRACTOR NAME] for the improvement of the identified property.

Under HRS § 507-48, when work or material for which a lien is filed was furnished to a contractor for use as provided in HRS § 507-42, the owner may retain from amounts payable to the contractor enough to cover the amount due or to become due to the persons who filed the lien.

The Claimant therefore requests—but does not represent that it can compel—the Owner to consider retaining up to $[AMOUNT] from amounts otherwise payable to [CONTRACTOR NAME], subject to the Owner's review of the court filing, contract balance, competing claims, counsel's advice, and any later court order or statutory discharge.

This request:

• does not add a percentage reserve, attorney-fee cushion, or amount not stated in or supported by the filed claim;
• is not directed to a lender or other non-owner merely because that person controls funds;
• does not require the Owner to segregate funds or accept personal liability;
• does not replace service of the Application and Notice or the probable-cause hearing under HRS § 507-43; and
• does not extend the three-month enforcement period that begins when an Order Directing Lien to Attach is entered.

4. PAYMENT DEMAND AND ENFORCEMENT NOTICE

HRS § 507-47 requires demand and refusal or neglect to pay before enforcement. The demand may be included in the Application and Notice. Complete one:

☐ The filed Application and Notice includes the statutory demand.

☐ Separate demand was made on [__/__/____] by [METHOD], and payment was refused or neglected.

☐ Counsel must determine whether a further demand is required before enforcement.

If the lien is not timely enforced in the circuit court, it expires under HRS § 507-43(e). This request does not commence an enforcement action.

5. DISCHARGE INFORMATION

HRS § 507-45 permits the owner, lessee, principal contractor, or intermediate subcontractor to discharge a mechanic's or materialman's lien by filing with the appropriate circuit-court clerk—or the assistant registrar when the statute requires—cash or a bond for twice the amount of the sum for which the lien claim was filed, conditioned on payment of any sum the claimant obtains by judgment.

This template does not supply a bond form. The filer, surety, amount, condition, filing office, and registered-land treatment must be confirmed with Hawaii counsel and the clerk.

6. ATTACHMENTS

• ☐ Filed Application for a Lien and Notice of Lien
• ☐ File-stamped docket or filing receipt
• ☐ Proofs of statutory service
• ☐ Order Directing Lien to Attach, if entered
• ☐ Registered-land filing evidence, if applicable
• ☐ Contract, invoices, delivery records, and payment ledger supporting the amount
• ☐ Contractor-license verification and HRS § 507-49 review

7. CLAIMANT CERTIFICATION AND DELIVERY RECORD

The undersigned certifies that the factual entries in this request are based on the identified court filing and Claimant's records. The undersigned understands that this is a request for the Owner to consider the discretionary retention described in HRS § 507-48 and is not a substitute for legal process.

8. OPTIONAL OWNER RECEIPT

Receipt acknowledges delivery only. It is not an agreement to retain funds, an admission that the lien is valid, or a waiver of any defense, offset, contract right, or court remedy.

9. RELEASE OR UPDATE NOTICE

Use only after checking the court docket and obtaining counsel review.

To: [OWNER NAME AND ADDRESS]

Re: [PROJECT / PROPERTY / CASE NUMBER]

The Claimant provides the following update concerning the retention request dated [__/__/____]:

☐ The filed claim has been paid and released.

☐ The filed claim was discharged through the statutory cash-or-bond procedure.

☐ The court denied or reduced the requested lien to $[________].

☐ The parties resolved the claim as follows: [________________________________].

☐ Other docket-supported update: [________________________________].

The Owner should rely on the court record and counsel's advice in deciding whether any retained amount may be released.

Sources and References

• HRS chapter 507 current table of contents: https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-.htm
• HRS § 507-42 (lien availability): https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-0042.htm
• HRS § 507-43 (Application and Notice, hearing, filing period, and duration): https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-0043.htm
• HRS § 507-45 (discharge by twice-the-claim cash or bond): https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-0045.htm
• HRS § 507-47 (demand and enforcement): https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-0047.htm
• HRS § 507-48 (owner may retain amount due): https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-0048.htm
• HRS § 507-49 (exceptions and licensing limits): https://data.capitol.hawaii.gov/hrscurrent/Vol12_Ch0501-0588/HRS0507/HRS_0507-0049.htm