**STOP NOTICE TO WITHHOLD CONSTRUCTION FUNDS

(State of Washington)**

[// GUIDANCE: This template is designed for private-works projects governed by Chapter 60.04 RCW (Washington’s mechanics-lien statute). Washington does not expressly label this type of document a “stop notice,” but nothing in Chapter 60.04 prohibits a subcontractor or supplier from delivering a written demand that the Owner and/or Construction Lender withhold unpaid contract funds to protect the claimant’s lien rights. This form adopts the functional elements of a traditional stop-notice procedure while conforming to Washington law, including bonding and release options under RCW 60.04.161. Customize all bracketed fields before use and confirm factual accuracy.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block
11. Certificate of Service

1. DOCUMENT HEADER

STOP NOTICE TO WITHHOLD CONSTRUCTION FUNDS
Project: [PROJECT NAME / STREET ADDRESS / LEGAL DESCRIPTION]
Claimant: [CLAIMANT LEGAL NAME] (“Claimant”)
Prime Contractor: [PRIME CONTRACTOR LEGAL NAME] (“Prime Contractor”)
Owner: [OWNER LEGAL NAME] (“Owner”)
Construction Lender (if any): [CONSTRUCTION LENDER NAME] (“Lender”)
Effective Date: [DATE]
County: [COUNTY], State of Washington

Recitals

A. Owner has engaged Prime Contractor to furnish labor, materials, and improvements for the Project pursuant to that certain contract dated [CONTRACT DATE] (the “Prime Contract”).

B. Claimant has furnished labor, professional services, materials, and/or equipment to the Project pursuant to a subcontract, purchase order, or other agreement with Prime Contractor dated [SUBCONTRACT DATE].

C. As of the Effective Date, Claimant is unpaid in the principal amount of $[AMOUNT CLAIMED] for such work (the “Claimed Sum”) and has lien rights under Chapter 60.04 Revised Code of Washington (“RCW”).

D. Pursuant to RCW 60.04 et seq., Claimant hereby gives written notice and demands that Owner and, if applicable, Lender withhold sufficient funds otherwise payable to Prime Contractor to secure payment of the Claimed Sum and associated costs, unless and until (i) Claimant is paid in full, or (ii) a statutory release bond is recorded under RCW 60.04.161.

NOW, THEREFORE, Claimant issues this Stop Notice subject to the following terms and conditions.

2. DEFINITIONS

Unless the context clearly requires otherwise, capitalized terms have the meanings set forth below and apply throughout this Stop Notice. Defined terms appear in alphabetical order.

1. “Bond” means a corporate surety bond that satisfies RCW 60.04.161, substitutes security for the Lien Claim, and effectuates release of withheld funds.
2. “Claimed Sum” has the meaning given in Recital C.
3. “Claimant” means the party identified as such in the Document Header.
4. “Construction Lender” or “Lender” means any mortgagee, beneficiary, or other person who has advanced, or committed to advance, construction financing for the Project and to whom this Stop Notice is directed.
5. “Lien Claim” means Claimant’s statutory mechanics’ lien under RCW 60.04 for unpaid labor, professional services, materials, or equipment furnished to the Project.
6. “Owner” means the record owner(s) of the real property comprising the Project at the time this Stop Notice is delivered.
7. “Prime Contractor” means the person or entity having direct contractual privity with Owner for construction of the Project.
8. “Project” means the improvement and the real property described in the Document Header.
9. “Release Procedures” means the steps set forth in Section 3.6 for discharge of this Stop Notice, including payment, bonding, or written waiver by Claimant.

3. OPERATIVE PROVISIONS

3.1 Stop Notice and Demand to Withhold

Claimant hereby demands that Owner and Lender immediately withhold, from any loan disbursement or payment otherwise due or to become due to Prime Contractor, a sum not less than the Claimed Sum, together with (a) statutory interest accruing under RCW 19.52.010, and (b) reasonable attorneys’ fees and costs recoverable under RCW 60.04.

3.2 Scope of Withholding

The withholding obligation attaches to (i) all progress, milestone, and retainage payments presently unpaid; (ii) any future advances under the construction loan; and (iii) any final payment otherwise payable to Prime Contractor.

3.3 Duration of Withholding

Owner and Lender shall continue to withhold the Claimed Sum until the earliest to occur of:
a. Full payment to Claimant;
b. Recording of a Bond pursuant to Section 3.5;
c. Expiration of Claimant’s lien-enforcement period under RCW 60.04.141 without commencement of suit; or
d. Written release executed by Claimant in accordance with Section 3.6.

3.4 Allocation of Risk for Non-Compliance

If Owner or Lender disburses funds contrary to this Stop Notice, Claimant reserves all rights and remedies under RCW 60.04, at law, or in equity, including but not limited to a direct claim against such disbursed funds.

3.5 Bonding Requirements

1. Prime Contractor or Owner may procure a Bond conditioned upon payment of the Claimed Sum and costs, in an amount not less than 150% of the Claimed Sum or such greater amount as may be required by RCW 60.04.161.
2. Upon receipt of a fully executed Bond meeting statutory requirements and recorded in the county where the Project is located, Owner and Lender may release all withheld funds.

3.6 Release Procedures

a. Payment in Full. Within three (3) business days after confirmed receipt of full payment, Claimant shall deliver to Owner, Lender, and Prime Contractor a written, recordable Release of Stop Notice and, if applicable, a Conditional or Unconditional Lien Waiver in the form customarily used in Washington.
b. Bond Substitution. Upon bonding under Section 3.5, Claimant shall deliver its Release of Stop Notice within three (3) business days after verified recording of the Bond.
c. Voluntary Release. Claimant may voluntarily release this Stop Notice at any time by written instrument referencing the Effective Date and Project.

[// GUIDANCE: Practitioners often attach statutory lien-waiver forms (conditional/unconditional progress and final). Insert as exhibits where appropriate.]

4. REPRESENTATIONS & WARRANTIES

4.1 Claimant represents and warrants to Owner and Lender that:
a. It is duly licensed and qualified under applicable Washington law to perform the work described herein.
b. The Claimed Sum is justly due and owing, has not been paid, waived, or otherwise satisfied, and represents the actual value of labor, professional services, materials, and/or equipment furnished to the Project.
c. It has complied with all statutory prerequisites to assert a Lien Claim, including timely service of any required preliminary notice under RCW 60.04.031.
d. No prior assignment of the Lien Claim or right to payment has been made.

4.2 Survival. The representations and warranties in this Section survive release of withheld funds or Bond substitution.

5. COVENANTS

5.1 Cooperation. Claimant shall promptly furnish additional documentation reasonably requested by Owner or Lender to substantiate the Claimed Sum (e.g., invoices, time sheets, delivery tickets).

5.2 Notice of Changes. Claimant shall notify Owner and Lender in writing of any material change to the Claimed Sum within five (5) business days after discovery.

5.3 Further Assurances. Each party shall execute and deliver such further instruments and take such further actions as may be necessary to carry out the intent of this Stop Notice.

6. DEFAULT & REMEDIES

6.1 Events of Default
a. Failure of Owner or Lender to withhold funds as required herein.
b. Failure of Claimant to release this Stop Notice after full payment or valid Bond substitution.

6.2 Cure Period
The defaulting party shall have five (5) business days after written notice specifying the default (the “Cure Period”) to remedy the same.

6.3 Remedies
a. If Owner or Lender defaults, Claimant may pursue:
i. Lien foreclosure under RCW 60.04;
ii. Payment directly from wrongfully disbursed funds;
iii. Reasonable attorneys’ fees and costs under RCW 60.04.181.
b. If Claimant defaults, Owner or Lender may seek:
i. Declaratory or injunctive relief compelling release;
ii. Recovery of incremental costs, including reasonable attorneys’ fees, caused by the wrongful refusal to release.

7. RISK ALLOCATION

7.1 Indemnification—Bonding Costs
Prime Contractor agrees to indemnify, defend, and hold harmless Owner and Lender from and against all costs, premiums, and expenses incurred to procure a Bond under Section 3.5, except to the extent such costs result from Owner’s or Lender’s material breach of this Stop Notice.

7.2 Limitation of Liability—Payment Withheld
Neither Owner nor Lender shall be liable to Prime Contractor for any consequential, special, or punitive damages arising out of the withholding of funds made in good-faith reliance on this Stop Notice.

7.3 Force Majeure
No party shall be deemed in breach for failure to act where such failure is caused by events beyond its reasonable control (including acts of God, war, governmental orders, or strikes), provided that the affected party gives prompt notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law
This Stop Notice and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Washington, without regard to its conflict-of-laws rules.

8.2 Forum Selection
The Superior Court of the State of Washington in the county where the Project is located shall have exclusive jurisdiction over all actions and proceedings arising out of or relating to this Stop Notice.

8.3 Injunctive Relief
Nothing herein limits any party’s right to seek provisional or injunctive relief to enforce the withholding obligations or secure the payment of the Claimed Sum.

[// GUIDANCE: Arbitration and jury-trial waiver are intentionally omitted as “not applicable” under the user’s metadata.]

9. GENERAL PROVISIONS

9.1 Amendments
No amendment or modification of this Stop Notice is valid unless in writing and signed by Claimant and Owner (and Lender if funds are subject to a construction loan).

9.2 Assignment
Claimant may not assign its rights hereunder without prior written consent of Owner, except an assignment for collateral purposes to secure financing.

9.3 Severability
If any provision of this Stop Notice is held invalid or unenforceable, the remaining provisions remain in full force and effect and shall be construed to effectuate the original intent of the parties.

9.4 Entire Agreement
This Stop Notice, together with any exhibits and schedules hereto, constitutes the entire agreement with respect to the subject matter hereof and supersedes all prior or contemporaneous communications.

9.5 Counterparts; Electronic Signatures
This Stop Notice may be executed in counterparts, each of which is deemed an original, and all of which together constitute one and the same instrument. Signatures delivered by facsimile, .pdf, or authenticated electronic signature service are effective for all purposes.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, Claimant has executed this Stop Notice as of the Effective Date.

CLAIMANT:
[CLAIMANT LEGAL NAME]
By: ____
Name: [AUTHORIZED SIGNATORY]
Title: [OFFICER / MANAGER]
Date: _______

[// GUIDANCE: Add signature blocks for Owner and Lender only if they will countersign to acknowledge receipt; not required for validity under Chapter 60.04 RCW.]

NOTARIAL ACKNOWLEDGMENT

(State of Washington, County of [COUNTY])

On this _ day of _, 20__, before me, the undersigned Notary Public, personally appeared ________, to me known to be the [title] of [Claimant], who executed the foregoing Stop Notice and acknowledged the same as the free and voluntary act and deed of said entity for the uses and purposes therein mentioned.

Witness my hand and official seal the day and year first above written.

Notary Public in and for the State of Washington
My commission expires: ______

[// GUIDANCE: Washington law does NOT require notarization for validity of a lien-related notice, but many practitioners add it for evidentiary value.]

11. CERTIFICATE OF SERVICE

I, the undersigned, declare under penalty of perjury under the laws of the State of Washington that I caused a true and correct copy of this Stop Notice to be served on the parties below in the manner indicated on the dates shown.

1. Owner: [OWNER NAME & ADDRESS] – ☐ Certified Mail ☐ Personal Delivery
2. Prime Contractor: [PRIME CONTRACTOR NAME & ADDRESS] – ☐ Certified Mail ☐ Personal Delivery
3. Lender (if any): [LENDER NAME & ADDRESS] – ☐ Certified Mail ☐ Personal Delivery

Executed at [City], Washington on [Date].

[NAME OF PERSON MAKING SERVICE]

[// GUIDANCE: RCW 60.04.031(5) allows service by certified or registered mail, return receipt requested, or by personal delivery. Retain proof of delivery (mail receipts, affidavits) for evidentiary purposes.]