STOP NOTICE AND DEMAND FOR WITHHOLDING
(New Hampshire Mechanic’s Lien – Private Project)
[// GUIDANCE: This template is drafted for use on private (non-public) construction projects located in New Hampshire. It is intended to be served by a potential lien claimant (the “Claimant”) upon the project Owner and, if applicable, the Construction Lender, to freeze disbursement of contract funds pending lien resolution. Counsel should confirm all filing and service deadlines under the New Hampshire mechanic’s-lien statute and court rules before use.]
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
STOP NOTICE AND DEMAND FOR WITHHOLDING
Effective Date: [DATE]
Issued By (the “Claimant”):
• Name/Entity: [CLAIMANT LEGAL NAME]
• Business Address: [ADDRESS]
• Telephone / Email: [PHONE / EMAIL]
Served Upon (each a “Payor Party” and collectively “Payor Parties”):
a. Project Owner: [OWNER LEGAL NAME & ADDRESS]
b. Construction Lender (if any): [LENDER LEGAL NAME & ADDRESS]
c. Prime/General Contractor (for notice only): [CONTRACTOR LEGAL NAME & ADDRESS]
Project: [PROJECT NAME / TITLE]
Project Location: [STREET ADDRESS, CITY/TOWN, COUNTY, NH]
Legal Description (attach if lengthy): [DESCRIPTION OR “EXHIBIT A”]
2. DEFINITIONS
The following capitalized terms are used herein with the meanings set forth below:
“Bond” – A surety bond issued in accordance with New Hampshire mechanic’s-lien law that is (i) in a penal sum not less than the Claim Amount, (ii) conditioned on payment of any judgment later rendered in favor of the Claimant, and (iii) issued by a surety authorized to transact business in New Hampshire.
“Claim Amount” – $[AMOUNT], representing the unpaid balance for labor, services, equipment, and/or materials furnished by Claimant to the Project through [LAST DATE OF WORK].
“Claimant” – The party identified in the Document Header asserting lien rights and issuing this Stop Notice.
“Construction Lender” – Any person or entity that has made or is making disbursements of construction funds for the Project pursuant to a loan, deed of trust, or mortgage financing arrangement.
“Owner” – The record owner(s) of fee title to the Project real property, together with any successor(s) in interest.
“Payor Parties” – Collectively, the Owner and any Construction Lender that receives this Stop Notice.
“Withheld Funds” – All Project funds otherwise due or to become due to the Prime/General Contractor (or any other party through whom Claimant’s contract chain runs) that are required to be retained or impounded by a Payor Party upon receipt of this Stop Notice.
3. OPERATIVE PROVISIONS
3.1 Notice of Claim and Demand to Withhold
(a) Pursuant to applicable New Hampshire mechanic’s-lien law, Claimant hereby gives written notice of its lien claim in the Claim Amount and demands that each Payor Party immediately withhold from disbursement the Withheld Funds until the earlier of:
(i) written release by Claimant;
(ii) filing of a court-approved Bond; or
(iii) final adjudication or settlement of the Claim Amount.
(b) The Claim Amount represents the reasonable value of unpaid labor, services, equipment, and/or materials furnished by Claimant for the improvement of the Property and is a good-faith, legally enforceable obligation.
3.2 Identification of Work Performed
Describe with specificity the nature, scope, and location of Claimant’s work:
• Trade: [TRADE/DESCRIPTION]
• First Date Furnished: [FIRST DATE]
• Last Date Furnished: [LAST DATE]
• Contract Tier: ( ) Direct with Owner ( ) Subcontract ( ) Sub-Subcontract
3.3 Service & Filing Requirements
(a) Claimant has served this Stop Notice on each Payor Party by:
( ) certified mail, return receipt requested; ( ) personal delivery; ( ) sheriff/constable.
(b) Within the statutory period for perfecting lien rights, Claimant shall, if necessary, record or file such additional notices, statements of account, or petitions as required to preserve, perfect, or foreclose its lien.
3.4 Conditions Precedent
This Stop Notice is conditioned on:
(a) Claimant having furnished labor, services, equipment, or materials to the Project; and
(b) Claimant’s compliance with all statutory notice, timing, and verification prerequisites.
4. REPRESENTATIONS & WARRANTIES
4.1 Claim Accuracy
Claimant represents and warrants that:
(a) the Claim Amount stated herein is justly due and owing;
(b) all credits and offsets known to Claimant have been applied; and
(c) Claimant has not been paid for the Claim Amount.
4.2 Capacity & Authority
Claimant (if an entity) is duly organized, validly existing, and has full power and authority to issue this Stop Notice. The undersigned signatory is authorized to bind Claimant.
4.3 Statutory Compliance
Claimant has satisfied, or will timely satisfy, each statutory requirement necessary to enforce a mechanic’s lien in New Hampshire, including—but not limited to—notice, service, and filing prerequisites. These representations survive execution and delivery of this Stop Notice.
5. COVENANTS & RESTRICTIONS
5.1 Cooperation
Each Payor Party shall cooperate in good faith to determine the correct amount to be withheld and to respond promptly to reasonable information requests from Claimant.
5.2 Notice of Bonding or Release
If a Payor Party obtains or causes to be issued a Bond meeting the requirements of Section 7.1 below, such Payor Party shall provide Claimant with (i) a copy of the Bond, (ii) proof of recording or court approval (if applicable), and (iii) written notice stating the date the Bond became effective.
5.3 Preservation of Records
Until final resolution of the Claim Amount, each Payor Party shall preserve and maintain all draw requests, payment applications, lien waivers, inspection reports, and related Project payment records.
6. DEFAULT & REMEDIES
6.1 Events of Default
For purposes of this Stop Notice, an “Event of Default” occurs if:
(a) a Payor Party fails to withhold the Withheld Funds as required;
(b) a Payor Party disburses any portion of the Withheld Funds in contravention of this Stop Notice without Claimant’s written consent or a court order; or
(c) a Payor Party fails to provide timely notice of a Bond or other statutory release mechanism.
6.2 Cure Period
Upon written notice of an Event of Default, the defaulting Payor Party shall have three (3) business days to cure. Failure to cure within such period entitles Claimant to pursue all available legal and equitable remedies.
6.3 Graduated Remedies
Remedies include, without limitation:
• filing or foreclosure of a mechanic’s lien;
• injunctive relief compelling retention of funds;
• attachment, trustee process, or garnishment of unpaid contract proceeds;
• recovery of attorney fees and costs as allowed by law or contract; and
• interest on the Claim Amount at the lesser of [INTEREST RATE]% per annum or the maximum rate permitted by law.
7. RISK ALLOCATION
7.1 Bonding Requirements (Discharge of Stop Notice)
A Payor Party may discharge this Stop Notice by furnishing a Bond that:
(a) is issued by a surety licensed in New Hampshire;
(b) names Claimant as an obligee or beneficiary;
(c) is in an amount not less than the Claim Amount (plus interest and potential costs); and
(d) is conditioned on payment of any judgment or arbitration award rendered in favor of Claimant with respect to the Claim Amount.
7.2 Limitation of Liability (Payment Withheld)
The liability of any Payor Party under this Stop Notice is limited to the lesser of:
(a) the Withheld Funds actually retained; or
(b) the Claim Amount. No Payor Party shall be liable for consequential or punitive damages arising solely from withholding payments in good-faith reliance on this Stop Notice.
7.3 Indemnification
Subject to Section 7.2, any Payor Party that fails to comply with this Stop Notice shall indemnify and hold harmless Claimant from and against all losses, costs, damages, and expenses (including reasonable attorney fees) caused by such non-compliance.
8. DISPUTE RESOLUTION
8.1 Governing Law
This Stop Notice and all disputes arising hereunder shall be governed by and construed in accordance with the mechanic’s-lien laws and other laws of the State of New Hampshire, without regard to its conflict-of-laws principles.
8.2 Forum Selection
Any action or proceeding arising out of or relating to this Stop Notice shall be brought exclusively in the state courts sitting in the county where the Project is located.
8.3 Arbitration
Not applicable. Nothing herein shall preclude the parties from voluntarily agreeing to arbitration by separate written agreement.
8.4 Injunctive Relief
Claimant is entitled to seek preliminary and permanent injunctive relief to enforce the payment-withholding obligations herein, in addition to any other remedies available at law or in equity.
9. GENERAL PROVISIONS
9.1 Amendments & Waivers
No amendment or waiver of any provision of this Stop Notice shall be effective unless set forth in a writing signed by Claimant. No waiver shall constitute or be construed as a future waiver of the same provision or any other provision.
9.2 Severability
If any provision of this Stop Notice is held unenforceable, the remaining provisions shall remain in full force and effect and shall be construed to fulfill, as nearly as possible, the original intent.
9.3 Integration
This Stop Notice constitutes the entire notice and agreement between Claimant and the Payor Parties concerning withholding of funds with respect to the Claim Amount and supersedes all prior or contemporaneous statements or notices relating thereto.
9.4 Assignment
Claimant may assign its rights under this Stop Notice only in conjunction with an assignment of its underlying lien claim. Any Payor Party may not assign its obligations hereunder without Claimant’s prior written consent, except to a successor in interest to the Project who assumes such obligations by operation of law.
9.5 Electronic Signatures
Signatures transmitted by facsimile, portable document format (PDF), or other electronic means shall be deemed original signatures for all purposes.
9.6 Counterparts
This Stop Notice may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, constitute one and the same instrument.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the undersigned executes this Stop Notice and Demand for Withholding as of the Effective Date set forth above.
CLAIMANT:
By: ______
Name: [PRINT NAME]
Title/Capacity: [CAPACITY OR “Individual”]
Date: ______
[Optional acknowledgment for entity Claimant]
State of ___ )
County of ___ ) ss.
On this ___ day of _, 20_, before me, the undersigned notary public, personally appeared ____, who acknowledged himself/herself to be the _____ of [CLAIMANT], and that he/she executed the foregoing instrument for the purposes therein contained.
Notary Public
My Commission Expires: ____
[// GUIDANCE: Attach any required verification, affidavit of service, exhibits (e.g., detailed statement of account, legal description), and schedules in accordance with New Hampshire court rules and statutory requirements.]
END OF DOCUMENT