Stop-Notice
STOP PAYMENT NOTICE
(Kansas)
TABLE OF CONTENTS
- Document Header
- Recitals
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
STOP PAYMENT NOTICE AND DEMAND FOR WITHHOLDING OF FUNDS
Effective Date: [DATE]
Notice To:
• Owner: [OWNER LEGAL NAME], a [STATE] [corporation/limited liability company/other]
• Construction Lender (if any): [LENDER LEGAL NAME], a [STATE] [banking institution]
• Prime Contractor: [PRIME CONTRACTOR LEGAL NAME], a [STATE] [entity type]
From / Claimant: [CLAIMANT LEGAL NAME], a [STATE] [entity type] (“Claimant”)
Project: [PROJECT NAME / DESCRIPTION]
Project Address: [STREET ADDRESS, CITY, COUNTY, KS ZIP]
Contract/PO No.: [REFERENCE NO.]
Governing Law: State of Kansas mechanic’s lien law, K.S.A. 60-1101 et seq. (“Lien Law”) and other applicable Kansas law.
Forum: Appropriate state court of competent jurisdiction in the county where the Project is located.
2. RECITALS
A. Claimant has furnished labor, materials, equipment, and/or services (“Work”) for the improvement of the above-described real property (“Project”) under an agreement with [CONTRACTING PARTY].
B. As of the Effective Date, Claimant is owed the Past-Due Amount (defined below) for Work performed, which amount remains unpaid despite due demand.
C. Pursuant to Claimant’s rights under the Lien Law, including K.S.A. 60-1101 (creation of lien) and K.S.A. 60-1102 (priority), Claimant is entitled to secure payment and, to that end, hereby issues this Stop Payment Notice (“Notice”) to require the Owner and/or Construction Lender to withhold sufficient undisbursed contract funds pending (i) payment in full, or (ii) posting of a statutory bond under K.S.A. 60-1103.
D. The parties desire to set forth their respective rights and obligations regarding withholding, bonding, and release procedures.
3. DEFINITIONS
For purposes of this Notice, capitalized terms have the meanings set forth below:
“Bond” – A surety bond in a penal sum not less than 125% of the Claim Amount, issued by a surety authorized to transact business in Kansas, conditioned as required by K.S.A. 60-1103(b), to discharge all lien and Stop Payment claims arising from the Work.
“Claim Amount” – The aggregate of the Past-Due Amount, accrued interest, contractual retainage, and recoverable costs as of the Effective Date.
“Past-Due Amount” – USD $[AMOUNT] currently due and owing to Claimant for the Work.
“Release Event” – (a) full payment and good-funds clearance of the Claim Amount to Claimant; or (b) delivery to Claimant of a Bond meeting the requirements of Section 7.3.
“Undisbursed Funds” – Contract balances, retention, or any other Project funds not yet paid to the Prime Contractor or lower-tier parties as of the date this Notice is received.
4. OPERATIVE PROVISIONS
4.1 Stop Payment Demand. Claimant hereby demands that Owner and Construction Lender immediately withhold from the Undisbursed Funds an amount equal to the Claim Amount, plus reasonable reserves for interest and fees, until occurrence of a Release Event.
4.2 Scope of Withholding. The withholding obligation applies to all Undisbursed Funds otherwise payable to the Prime Contractor or its designees in connection with the Project.
4.3 Notice Delivery.
(a) Method. Personal delivery, certified mail return-receipt requested, and email (if available) to the addresses shown above.
(b) Effective Date of Receipt. Earliest of (i) actual delivery, (ii) three (3) business days after deposit with USPS, or (iii) electronic confirmation of email delivery.
4.4 Preservation of Lien Rights. Nothing herein waives Claimant’s right to record/file a mechanic’s lien under K.S.A. 60-1105 or to pursue any other legal or equitable remedy.
4.5 Conditions Precedent. Owner’s and Lender’s obligations to withhold funds arise upon receipt of this Notice, subject to Owner’s or Lender’s right to demand reasonable written verification of Claimant’s claim under Section 5.2.
5. REPRESENTATIONS & WARRANTIES
5.1 Claimant Representations. Claimant represents and warrants that:
(a) Claimant furnished the Work in good faith and in accordance with the Contract.
(b) The Past-Due Amount is justly due and owing, after allowing all just credits and offsets.
(c) Claimant has not received payment, in whole or in part, for the Past-Due Amount.
(d) Claimant has complied with all prerequisite notice requirements under K.S.A. 60-1105 (if applicable).
5.2 Owner/Lender Right of Verification. Owner and/or Lender may, within five (5) business days after receipt of this Notice, request substantiating documentation reasonably necessary to evaluate the Claim Amount. Failure to request such documentation within said period constitutes waiver of further verification rights.
5.3 Survival. The representations and warranties in this Section survive any Release Event to the extent necessary to enforce indemnity or pursue remedies for breach.
6. COVENANTS & RESTRICTIONS
6.1 Claimant Covenants.
(a) Cooperation. Claimant shall furnish additional information reasonably requested by Owner or Lender to facilitate resolution of the claim.
(b) Lien Filing Deadline. Unless a Release Event occurs sooner, Claimant shall perfect its mechanic’s lien within the statutory period prescribed by K.S.A. 60-1105.
6.2 Owner Covenants.
(a) Segregation of Funds. Owner shall segregate the withheld portion of the Undisbursed Funds in a separately identifiable account.
(b) Non-Disbursement. Owner shall not disburse the withheld funds until occurrence of a Release Event or final non-appealable court order.
6.3 Lender Covenants. Lender shall hold or instruct the title/escrow company to hold the Undisbursed Funds consistent with the obligations in Section 6.2.
6.4 Restrictions on Assignments. No party may assign rights or delegate duties arising under this Notice without prior written consent of the other parties, except to a successor by merger or acquisition who assumes all obligations herein.
7. DEFAULT & REMEDIES
7.1 Events of Default.
(a) Failure of Owner or Lender to honor the withholding obligation.
(b) Failure of Claimant to timely provide verification requested under Section 5.2.
(c) Material misrepresentation by any party regarding the Work or Claim Amount.
7.2 Cure Periods. Ten (10) calendar days after written notice specifying the default; provided that withholding failures must be cured within three (3) business days.
7.3 Remedies.
(a) Injunctive Relief. Claimant may seek a temporary restraining order and preliminary injunction to enforce withholding.
(b) Bond Substitution. Owner or Lender may discharge the withholding obligation by posting a Bond compliant with K.S.A. 60-1103(b).
(c) Attorney Fees & Costs. The prevailing party in any action to enforce this Notice is entitled to recover reasonable attorney fees, court costs, and collection expenses.
8. RISK ALLOCATION
8.1 Indemnification. Owner and Lender jointly and severally agree to indemnify, defend, and hold Claimant harmless from any loss, cost, or liability (including reasonable attorney fees) arising from a breach of the withholding obligations, except to the extent caused by Claimant’s willful misconduct or material misrepresentation.
8.2 Limitation of Liability. The aggregate liability of Owner and Lender under this Notice shall in no event exceed the amount of Undisbursed Funds at the time of wrongful disbursement; provided, however, that the foregoing cap does not apply to (i) intentional or fraudulent conduct, or (ii) statutory penalties.
8.3 Insurance. Each party shall maintain commercially reasonable insurance customary for its role on the Project.
8.4 Force Majeure. Non-performance (other than payment obligations) is excused to the extent caused by events beyond the reasonable control of the affected party, provided that such party gives prompt notice and uses diligent efforts to mitigate.
9. DISPUTE RESOLUTION
9.1 Governing Law. This Notice and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Kansas, without regard to conflict-of-laws principles.
9.2 Forum Selection. The parties irrevocably submit to the exclusive jurisdiction of the state courts located in the county where the Project is situated.
9.3 Arbitration. Not applicable.
9.4 Jury Trial Waiver. Not applicable.
9.5 Equitable Relief. The parties acknowledge that a breach of the withholding obligations may cause irreparable harm for which money damages are inadequate; accordingly, injunctive relief is an available and appropriate remedy.
10. GENERAL PROVISIONS
10.1 Entire Agreement. This Notice constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior negotiations or agreements, oral or written.
10.2 Amendments; Waivers. No amendment or waiver is effective unless in writing and signed by the party against whom enforcement is sought. A waiver on one occasion is not a waiver of any subsequent breach.
10.3 Severability. If any provision of this Notice is held invalid or unenforceable, the remaining provisions remain in full force and effect to the maximum extent permitted by law.
10.4 Counterparts; Electronic Signatures. This Notice may be executed in counterparts (including by PDF or other electronic means), each of which is deemed an original and all of which constitute one and the same instrument.
10.5 Successors & Assigns. This Notice binds and inures to the benefit of the parties and their respective successors and permitted assigns.
10.6 Notices. All notices required or permitted under this Notice must be in writing and delivered in accordance with Section 4.3.
10.7 Headings. Section headings are for convenience only and do not affect interpretation.
11. EXECUTION BLOCK
IN WITNESS WHEREOF, the undersigned have executed this Stop Payment Notice as of the Effective Date first written above.
CLAIMANT
[CLAIMANT LEGAL NAME]
By: _________________________________
Name: [PRINTED NAME]
Title: [OFFICER TITLE]
Date: _____________________________
OWNER
[OWNER LEGAL NAME]
By: _________________________________
Name: [PRINTED NAME]
Title: [OFFICER TITLE]
Date: _____________________________
CONSTRUCTION LENDER (if applicable)
[LENDER LEGAL NAME]
By: _________________________________
Name: [PRINTED NAME]
Title: [OFFICER TITLE]
Date: _____________________________
[Seal / Notarization block as required under Kansas law, if this Notice is to be recorded or formally acknowledged.]
About This Template
Real estate documents transfer ownership, define who can use a property, and record agreements between buyers, sellers, landlords, and tenants. Deeds, purchase agreements, leases, and easements have to be drafted to meet state recording requirements, and mistakes show up at closing or years later in title disputes. Good real estate paperwork moves transactions forward quickly and avoids the kind of problems that only surface when it is time to sell or refinance.
Important Notice
This template is provided for informational purposes. It is not legal advice. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Last updated: May 2026