Stop-Notice - Massachusetts

STOP NOTICE / OPTIONAL CONTRACTUAL PAYMENT-HOLD REQUEST

(Massachusetts Private Construction Project — Not a Statutory Stop Notice)

TABLE OF CONTENTS

1. Document Header ............................................................................. 2
2. Definitions ....................................................................................... 3
3. Operative Provisions – Stop Notice & Withholding Directive ............... 4
4. Representations & Warranties ............................................................ 5
5. Covenants & Ongoing Obligations .................................................... 6
6. Bonding & Release Procedures ........................................................... 7
7. Default & Remedies ....................................................................... 8
8. Risk Allocation ............................................................................... 9
9. Dispute Resolution ......................................................................... 10
10. General Provisions ....................................................................... 11
11. Execution Block ............................................................................ 12

1. DOCUMENT HEADER

1.1 Title. Stop Notice and Demand to Withhold Payment Pending Lien Resolution (this “Stop Notice”).

1.2 Parties.
(a) Claimant: [CLAIMANT LEGAL NAME], a [STATE] [ENTITY TYPE], located at [ADDRESS], telephone [PHONE], email [EMAIL].
(b) Obligor (Contractor): [PRIME CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE], located at [ADDRESS].
(c) Disbursing Party (each, a “Withholding Party”):
  (i) Owner: [OWNER LEGAL NAME], located at [ADDRESS]; and/or
  (ii) Construction Lender (if applicable): [LENDER LEGAL NAME], located at [ADDRESS].

1.3 Project. Project Name/Description: [PROJECT], located at [SITE ADDRESS / LEGAL DESCRIPTION] (the “Project”).

1.4 Contract Reference. Claimant furnished labor, material, and/or equipment to the Project pursuant to that certain [SUBCONTRACT / PURCHASE ORDER] dated [DATE] between Claimant and Obligor (the “Underlying Contract”).

1.5 Effective Date & Limited Purpose. This request is effective as of [EFFECTIVE DATE]. It asks the recipients to negotiate a voluntary payment hold or escrow arrangement. It does not itself create, perfect, extend, or enforce a lien under Mass. Gen. Laws ch. 254.

2. DEFINITIONS

The following capitalized terms are used with the meanings set forth below. Undefined capitalized terms have the meanings assigned elsewhere in this Stop Notice.

“Bond” has the meaning provided in Section 6.2.
“Bonding Party” means Obligor or any other Person posting a Bond.
“Claim Amount” means $[AMOUNT] (exclusive of interest, costs, and attorney fees) currently overdue and owing to Claimant under the Underlying Contract.
“Final Resolution” has the meaning provided in Section 6.4.
“Held Funds” means funds a recipient voluntarily agrees in a signed writing to retain under Section 3.

3. OPERATIVE PROVISIONS — VOLUNTARY PAYMENT-HOLD REQUEST

3.1 Request. Claimant requests that the Owner, Contractor, or Lender review the attached invoices and consider voluntarily holding $[REQUESTED AMOUNT] pending written resolution. This request is not a representation that Massachusetts law compels the recipient to withhold payment.

3.2 Duration of Any Agreed Hold. Any hold exists only if the affected parties sign a separate written agreement specifying the amount and duration. The agreement may provide for termination upon:
 (a) Claimant delivers a written withdrawal of this request in substantially the form of Exhibit A;
 (b) The parties accept separately negotiated security under Section 6.2;
 (c) Final Resolution in accordance with Section 6.4; or
 (d) Entry of a final, non-appealable court order otherwise directing disposition of the Held Funds.

3.3 No Statutory Default. Declining this request, standing alone, does not create the joint-and-several liability formerly stated in this template. Claimant reserves only rights that independently exist under a contract, a properly established lien, or other applicable law.

3.4 Escrow Option. The parties may negotiate a written escrow agreement identifying the depository, fees, interest allocation, release conditions, and dispute process.

4. REPRESENTATIONS & WARRANTIES

4.1 By Claimant. Claimant represents and warrants as of the Effective Date:
 (a) All labor, materials, and/or equipment for which the Claim Amount is sought were actually furnished to the Project;
 (b) The Claim Amount is presently due and payable under the Underlying Contract and no part thereof has been paid;
 (c) Claimant has satisfied all statutory prerequisites to perfect any mechanic’s lien or related remedy under Applicable Law; and
 (d) The undersigned signatory has full authority to execute and deliver this Stop Notice.

4.2 Survival. The representations and warranties in this Section 4 shall survive until Final Resolution.

5. COVENANTS & ONGOING OBLIGATIONS

5.1 Cooperation. Claimant shall reasonably cooperate with Obligor and any Withholding Party in exchanging documentation necessary to verify the Claim Amount, including delivery of time sheets, invoices, or materials tickets.

5.2 Notice of Change. Claimant shall promptly notify all parties hereto of any material amendment to the Claim Amount or of any settlement discussions that could affect the Release Procedures in Section 6.

5.3 Preservation of Rights. Nothing herein shall be construed as a waiver of Claimant’s right to (i) record a mechanic’s lien, (ii) commence litigation, or (iii) pursue any other remedy available under Applicable Law.

6. BONDING & RELEASE PROCEDURES

6.1 Purpose. The parties may use this section to negotiate security or release terms without representing that Chapter 254 compels them.

6.2 Bond Distinguished. Mass. Gen. Laws ch. 254, § 14 permits a person in interest to dissolve an existing lien by recording a Massachusetts-authorized surety bond in a penal sum equal to the lien amount. It does not prescribe a 125% bond to release this voluntary request. Any contractual security for a requested hold must be separately negotiated and must not be labeled a statutory § 14 bond unless its prerequisites are satisfied.

6.3 Release. Claimant may provide a written withdrawal of this request or a separately prepared lien release when legally appropriate. The documents should not be treated as interchangeable.

6.4 Final Resolution. “Final Resolution” means the earliest to occur of:
 (a) Full payment of the Claim Amount to Claimant;
 (b) Written, unconditional waiver and release by Claimant; or
 (c) Entry of a final, non-appealable judgment or arbitration award determining the Claim Amount (or zero).

6.5 Return or Disbursement of Held Funds. If a separate signed agreement created a hold, the holder shall disburse the Held Funds and any allocated interest in accordance with:
 (a) A joint written instruction executed by Claimant and Obligor; or
 (b) A final court order.

7. DEFAULT & REMEDIES

7.1 No Default Without Agreement. A recipient's refusal to accept this request is not an Event of Default. Default and cure provisions apply only if the affected parties execute a separate payment-hold or escrow agreement.

7.2 Cure Period. Any cure period must be stated in the separate signed agreement: [____] business days.

7.3 Remedies. Without limiting any statutory rights, the non-defaulting party may seek:
 (a) Specific performance or injunctive relief compelling compliance;
 (b) Recovery of actual damages, including interest, costs, and reasonable attorney fees; and
 (c) Any other remedy available at law or in equity.

8. RISK ALLOCATION

8.1 Indemnification. Claimant shall indemnify, defend, and hold harmless each Withholding Party (and its respective officers, directors, employees, and agents) from and against any Losses arising out of any inaccuracy in Claimant’s representations or failure to comply with Applicable Law, except to the extent caused by such Withholding Party’s gross negligence or willful misconduct.

8.2 Limitation of Liability. This request creates no liability cap. Any limitation must be separately negotiated and reviewed for enforceability in the actual transaction.

8.3 No Consequential Damages. No party shall be liable for consequential, incidental, or punitive damages in connection with this Stop Notice.

9. DISPUTE RESOLUTION

9.1 Governing Law. This Stop Notice and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to conflict-of-law rules.

9.2 Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state courts located in the county where the Project is situated.

9.3 Remedies. This request does not create an automatic entitlement to injunctive relief. Any remedy must arise from an executed agreement or independently applicable law and remain subject to the court's requirements.

10. GENERAL PROVISIONS

10.1 Amendments. Any amendment or waiver must be in writing and signed by Claimant and the affected Withholding Party.

10.2 Successors & Assigns. This Stop Notice is binding upon and inures to the benefit of the parties and their respective successors and permitted assigns. No assignment by Obligor shall relieve it of its obligations herein.

10.3 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall be liberally construed to carry out the parties’ intent.

10.4 Entire Agreement. This Stop Notice, together with any exhibits, constitutes the entire agreement with respect to the subject matter and supersedes any prior understandings.

10.5 Counterparts; Electronic Signatures. This Stop Notice may be executed in multiple counterparts, each of which is deemed an original, all of which constitute one instrument. Signatures transmitted by electronic means (e.g., PDF, DocuSign) are deemed original for all purposes.

11. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties hereto have executed this Stop Notice as of the Effective Date.

[Notary Acknowledgment, if desired under M.G.L. ch. 183 §30 or local recording requirements.]

EXHIBIT A

FORM OF UNCONDITIONAL RELEASE OF STOP NOTICE
[Attach a withdrawal of the voluntary request, or use a separately verified statutory lien-release document if a lien exists.]

EXHIBIT B

OPTIONAL CONTRACTUAL SECURITY TERMS
[Use only if separately negotiated. Do not label this a Mass. Gen. Laws ch. 254, § 14 lien-dissolution bond unless an existing lien and every statutory prerequisite are present.]

EXHIBIT C

FORM OF CONDITIONAL RELEASE OF STOP NOTICE
[Conditional upon Bond or partial payment; tailored to lender/owner acceptance.]

Sources and References

• Mass. Gen. Laws ch. 254, § 2
• Mass. Gen. Laws ch. 254, § 14