STOP-NOTICE
(Payment Withholding Pending Lien Resolution – Oklahoma)
[// GUIDANCE: This template is drafted to comply with Oklahoma lien-law concepts commonly referred to as a “Stop Notice” or “Stop-Payment Notice.” Although Oklahoma statutes do not supply a single, codified “stop-notice” form, the mechanics’ and materialmen’s lien statutes (Okla. Stat. tit. 42) and public-works bonding statutes (Okla. Stat. tit. 61) permit qualified claimants to require an Owner and/or Construction Lender to withhold undisbursed contract funds until the claimant’s lien rights are resolved. Customize all bracketed items before use and confirm statutory deadlines, notice-service requirements, and bond amounts for the specific project type (private vs. public).]
TABLE OF CONTENTS
I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
I. DOCUMENT HEADER
1.1 Title. STOP-NOTICE TO WITHHOLD FUNDS PENDING LIEN RESOLUTION.
1.2 Parties.
(a) “Claimant”: [CLAIMANT LEGAL NAME], a [state] [entity type], License/Registration No. [______].
(b) “Owner”: [OWNER LEGAL NAME], a [state] [entity type].
(c) “Direct Contractor”: [CONTRACTOR LEGAL NAME], a [state] [entity type].
(d) “Construction Lender” (if any): [LENDER LEGAL NAME].
1.3 Project. The labor, services, equipment, or materials furnished in connection with the improvement known as “[PROJECT NAME]” located at [PROJECT ADDRESS], County of [______], State of Oklahoma, more particularly described in Exhibit A (the “Property”).
1.4 Effective Date. This Stop-Notice is effective upon the earliest of (i) actual receipt by an Owner, (ii) actual receipt by the Construction Lender, or (iii) the date of certified-mail delivery as evidenced by USPS records (the “Effective Date”).
1.5 Governing Law & Jurisdiction. Oklahoma lien law and related statutory provisions (“State Lien Law”); exclusive forum: state courts of competent jurisdiction located in [COUNTY], Oklahoma.
II. DEFINITIONS
For ease of reference, capitalized terms have the meanings set forth below and apply uniformly throughout this Stop-Notice.
“Bond” means a surety bond meeting State Lien Law requirements that secures discharge of this Stop-Notice and any associated lien claim.
“Claim Amount” means $[CLAIM AMOUNT], representing the unpaid contract balance due Claimant for labor, services, materials, or equipment furnished to the Project through [LAST DATE OF FURNISHING].
“Notice of Release” has the meaning assigned in § III.6.
“Permitted Withholding” means an amount not less than the Claim Amount, plus 25 % to cover statutory interest, attorneys’ fees, and costs, or such other sum as State Lien Law may prescribe.
“Stop-Notice” means this instrument, together with all Exhibits, Schedules, and any written amendments.
III. OPERATIVE PROVISIONS
3.1 Stop-Payment Demand. Pursuant to State Lien Law, Claimant hereby demands that Owner and Construction Lender immediately withhold from further disbursement the Permitted Withholding from contract funds otherwise due or to become due to Direct Contractor or any lower-tier claimant.
3.2 Scope of Withholding.
(a) Private Projects. Owner shall segregate the Permitted Withholding in a trust fund in accordance with State Lien Law.
(b) Public Projects. If the Project is a public improvement on which a public property lien is prohibited, Owner (public agency) shall withhold the Permitted Withholding from progress or final payments otherwise payable to Direct Contractor.
3.3 Bonding-Around Option. Owner, Direct Contractor, or Construction Lender may, at their election and expense, procure and deliver to Claimant a Bond in a penal sum of not less than 125 % of the Claim Amount. Upon Claimant’s receipt of the Bond, Claimant shall execute and deliver a partial release of this Stop-Notice limited to the bonded sum.
3.4 Conditions Precedent. Claimant certifies that all statutorily required preliminary notices, if any, were timely and properly served, and that this Stop-Notice is filed/served within the time prescribed by State Lien Law.
3.5 Continuing Effect. This Stop-Notice shall remain in force until the earliest of: (i) payment in full of the Claim Amount; (ii) posting of a Bond under § 3.3; (iii) written withdrawal by Claimant; or (iv) expiration of Claimant’s lien-enforcement period under State Lien Law.
3.6 Release Procedure. Within five (5) business days after satisfaction of § 3.5(i)–(iii), Claimant shall execute and deliver to Owner, Direct Contractor, and Construction Lender a notarized Notice of Release, substantially in the form attached as Exhibit B.
IV. REPRESENTATIONS & WARRANTIES
4.1 Claimant’s Authority. Claimant is duly organized, validly existing, and in good standing under the laws of its formation jurisdiction and is licensed and qualified to perform work on the Project.
4.2 Valid Claim. The Claim Amount is just, due, and unpaid; no part thereof has been paid or satisfied; and all credits and offsets known to Claimant have been allowed.
4.3 Compliance with Lien Law. Claimant has complied in all material respects with State Lien Law prerequisites, including service/filing of any required preliminary notice.
4.4 Survival. The representations and warranties in this Article IV survive until the later of (i) discharge of this Stop-Notice or (ii) final resolution of any lien foreclosure proceeding.
V. COVENANTS & RESTRICTIONS
5.1 Cooperation. Parties shall reasonably cooperate to facilitate prompt resolution of the Claim Amount, including providing requested documentation, schedules of values, and change-order logs.
5.2 Notice of Payment. Owner and/or Construction Lender shall notify Claimant in writing within five (5) business days after any payment, release, or bonding action affecting the Permitted Withholding.
5.3 No Waiver of Lien Rights. Nothing herein constitutes a waiver, release, or impairment of Claimant’s statutory lien rights unless and until expressly provided in a duly executed Notice of Release.
VI. DEFAULT & REMEDIES
6.1 Events of Default.
(a) Disbursement of Permitted Withholding in violation of this Stop-Notice.
(b) Failure to procure a Bond after electing the bonding-around option.
(c) Breach of any covenant, representation, or warranty herein.
6.2 Cure Period. A default is curable within five (5) business days after written notice specifying the default, except that unlawful disbursement of funds is an immediate, non-curable default.
6.3 Remedies. Upon default, Claimant may, in addition to any statutory remedies:
(i) Seek injunctive relief compelling compliance;
(ii) Recover the Claim Amount, interest at the maximum lawful rate, reasonable attorneys’ fees, and costs;
(iii) Pursue lien foreclosure or bond-claim proceedings without further notice.
6.4 Cumulative Rights. Remedies are cumulative and not exclusive of any rights under State Lien Law or other applicable law.
VII. RISK ALLOCATION
7.1 Indemnification (Bonding Requirements). The surety issuing any Bond under § 3.3 shall defend, indemnify, and hold harmless Owner and Construction Lender from and against all loss, cost, or expense arising from this Stop-Notice and any related lien claim.
7.2 Limitation of Liability. Owner’s and Construction Lender’s liability to Claimant shall, in any event, be capped at the lesser of (a) the Permitted Withholding actually retained or (b) the Claim Amount, except to the extent Owner or Lender disburses funds in willful violation of this Stop-Notice.
7.3 Force Majeure. No party shall be liable for delay or failure to perform, other than payment obligations, caused by events beyond its reasonable control, including acts of God, war, terrorism, or governmental action.
VIII. DISPUTE RESOLUTION
8.1 Governing Law. State Lien Law and, to the extent not inconsistent, the laws of the State of Oklahoma without regard to conflict-of-law principles.
8.2 Forum Selection. Exclusive venue in the state courts located in [COUNTY], Oklahoma. Each party irrevocably submits to such jurisdiction.
8.3 Arbitration. Not applicable.
8.4 Jury Waiver. Not applicable.
8.5 Injunctive Relief. Claimant’s statutory right to injunctive relief to enforce payment withholding is preserved notwithstanding any other provision.
IX. GENERAL PROVISIONS
9.1 Amendments & Waivers. No amendment or waiver of any provision of this Stop-Notice is effective unless in writing and signed by the party against whom enforcement is sought.
9.2 Assignment. Claimant may assign its rights hereunder only in connection with a bona fide assignment of the underlying lien claim; any other assignment requires prior written consent of Owner and Construction Lender.
9.3 Successors & Assigns. This Stop-Notice binds and benefits the parties and their respective successors and permitted assigns.
9.4 Severability. If any provision is held invalid, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve its original intent.
9.5 Entire Agreement. This Stop-Notice constitutes the entire agreement of the parties with respect to the subject matter and supersedes all prior communications relating thereto.
9.6 Counterparts; Electronic Signatures. This Stop-Notice may be executed in counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures transmitted electronically (e.g., PDF, DocuSign) are deemed original and binding.
X. EXECUTION BLOCK
Executed as of the Effective Date.
CLAIMANT:
[CLAIMANT LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: _________
OWNER:
[OWNER LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: _________
DIRECT CONTRACTOR (acknowledgment only):
[CONTRACTOR LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: _________
CONSTRUCTION LENDER (acknowledgment only):
[LENDER LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: _________
[NOTARY BLOCKS, if required under Oklahoma law, may be inserted here.]
EXHIBIT A
Legal Description of Property
[INSERT OR ATTACH FULL LEGAL DESCRIPTION]
EXHIBIT B
Form of Notice of Release
[Attach short, notarized form releasing Stop-Notice upon payment or bonding.]
[// GUIDANCE: Prior to service, confirm (1) that all required preliminary or pre-lien notices have been timely served, (2) statutory service method (certified mail, hand delivery, or sheriff’s service) and recipients (Owner, Lender, and Original Contractor), and (3) filing requirements with the county clerk, if any. Retain proof of service (postal receipts, affidavits) to preserve enforcement rights. Failure to comply with statutory deadlines or service requirements may render the Stop-Notice unenforceable.]