The Stop Notice Map: The Four States Where an Unpaid Contractor Can Freeze the Construction Loan
✓ Verified against state statutes · Reviewed September 2026 · By Michael Evan — Founder · 50 states · 799 rules
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Two Different Targets: The Property and the Money
Every conversation about construction payment rights starts in the same place, which is to record a mechanics lien. It is the right instinct, and it is also an instinct about real estate. A lien is a claim against the building, a cloud on title that has to be resolved before the property can be sold or refinanced, collected in the last resort by forcing a sale. It works because it makes the dirt unsaleable, and it works slowly for the same reason. There is a second instrument that does something structurally different. A stop notice does not touch the property at all. It goes to whoever is still holding the money, usually the construction lender financing the job, sometimes the owner, and on California public work the public entity, and it directs them to stop paying it out. The claim attaches to funds that have not been disbursed yet. If the timing is right, the money never leaves the account, and it is sitting there when the claim is resolved. That is a materially better position to be in than holding a lien, and the obvious question is why it is not the first thing everyone does. The answer is that in 46 states it is not available. The stop notice is a four-state remedy. The practical consequence of the difference is timing. A lien can be recorded after the job is over and the money is long gone, and it still works, because the property has not moved. A stop notice is worthless the day after the last draw is disbursed, because there is nothing left to freeze. In the four states that have one, the stop notice is an early remedy and the lien is a late one, and treating them as interchangeable options to be chosen at leisure is the fastest way to end up with only the late one.
The Four Stop Notice States, Side by Side
Arizona provides a stop notice and a bonded stop notice under A.R.S. 33-1051 through 33-1067, served on the owner and the construction lender, unlocked by the 20-day preliminary notice under A.R.S. 33-992.01, with enforcement governed by A.R.S. 33-1063. Alaska provides a stop-lending notice under AS 34.35.062, served on the lender with copies to the owner and each prime contractor in the claimant's chain, available any time after payment is past due. California provides a stop payment notice under Cal. Civ. Code 8500 through 8560 on private work and 9350 through 9364 on public work, served on the owner, the construction lender, or the public entity, unlocked by the 20-day preliminary notice under Cal. Civ. Code 8200, and due 30 days after a notice of completion or cessation is recorded or 90 days after completion if none is recorded. Washington provides a notice to lender under RCW 60.04.221, served on the lender at the office administering the interim or construction financing with copies to the owner and the appropriate prime contractor, available once a payment is more than five days late and due within 35 days of the date the payment was required. Those four statutes do the same job and almost nothing else matches. They differ on who receives the notice, what triggers the right, how long the claimant has, whether the recipient is actually obliged to comply, and what it costs to make compliance mandatory.
California Is the Broadest Version and the Only One Covering Public Work
California is the state most contractors have heard of on this subject, and it is the only one of the four where the stop payment notice reaches both private and public projects. On private work, Cal. Civ. Code 8500 through 8560 let a claimant who has served the 20-day preliminary notice under section 8200 serve a stop payment notice on the owner or the construction lender. The deadline is the same shape as the lien deadline, which is 30 days after a notice of completion or cessation is recorded, or 90 days after completion if none is recorded. On public work the instrument becomes considerably more important, because no lien on public property is possible anywhere in the country. Cal. Civ. Code 9350 through 9364 let a claimant serve the public entity directly, and section 9356 sets the same 30-day and 90-day structure measured from a recorded notice of completion, acceptance, or cessation. In California the stop payment notice therefore sits alongside the payment bond claim as a primary public-work remedy rather than as a supplement to the lien. Enforcement follows a defined window: suit may be commenced no sooner than 10 days after the notice is given and no later than 90 days after the period for giving the notice expires.
Arizona Has the Strongest Lender Duty at the Highest Price
Arizona splits the duty by recipient, and the split is instructive. Under A.R.S. 33-1055 an owner who receives a stop notice must withhold, unless a payment bond has been recorded on the project. A construction lender, by contrast, may elect not to withhold at all, unless the claimant serves a bonded stop notice. A.R.S. 33-1051 defines that as a stop notice accompanied by a surety bond equal to 150 percent of the claim, the steepest figure in this survey. Post it and the lender's discretion disappears. Arizona also gives the clearest enforcement window of the four. Under A.R.S. 33-1063 an action to enforce the claim stated in the notice may be commenced any time after 10 days from service and must be commenced no later than three months after the period for recording a lien under section 33-993 expires. Miss that and the withholding stops, because the statute directs that funds not be withheld beyond the three-month period unless an action has been commenced. The stop notice right is unlocked by the Arizona 20-day preliminary notice under A.R.S. 33-992.01, the same notice that preserves lien rights, which makes Arizona a rare case where one document buys two remedies.
Washington Is Anchored to a Missed Payment Rather Than to the Job
Washington's version under RCW 60.04.221 is called a notice to lender, and its timing rule is unlike anything else in this survey. A potential lien claimant who has not received a payment within five days after the date required by the contract, invoice, employee benefit plan agreement, or purchase order may, within 35 days of that required date, give written notice of the sums due and to become due. The notice goes to the lender at the office administering the interim or construction financing, with copies to the owner and the appropriate prime contractor, and it must be signed by the claimant or a person authorized to act on the claimant's behalf. What the lender must then do is unusually concrete: withhold the amount claimed from the next and subsequent draws, or obtain from the prime contractor or borrower a payment bond for the claimant's benefit sufficient to cover the amount stated. There is no claimant bond and no lender election. The trade is that the window is short and it opens and closes on the payment calendar rather than the construction calendar.
Alaska Makes the Lender Pay Twice
Alaska's AS 34.35.062 is the least discussed of the four and arguably the most aggressive. A claimant whose payment is past due may give the lender a stop-lending notice, with copies to the owner and to each prime contractor with whom or through whom the claimant or the claimant's debtor has contracted. The notice instructs the lender to stop disbursing, advancing, or otherwise providing construction financing for the project, and it describes the labor, material, service, or equipment furnished and names the person to whom it was furnished. The enforcement mechanism is what sets it apart. A lender that provides construction financing after the project is the subject of a stop-lending notice becomes liable to the claimant for the lowest of three amounts: what it disbursed, what is ultimately owed to the claimant, or 150 percent of the amount stated in the notice. The lender is not merely holding someone else's money at that point, because it is exposed on its own balance sheet. The counterweight is a hard expiration, since the notice expires on the 91st day after the lender receives it unless the claimant has commenced an action on the underlying claim before that day.
The Bond Tax: Why Two of the Four Charge Admission
The single most consequential finding in this data is not which states have the remedy. It is that in two of the four, having the right and being able to use it are different things. Arizona and California both permit a construction lender to decline an unbonded notice. The claimant's response is to post a surety bond, set at 150 percent of the claim in Arizona and 125 percent in California, which converts the lender's option into an obligation. That is a real barrier and it falls hardest on exactly the claimant the statute is meant to protect. A subcontractor who is unpaid by 80,000 dollars is being asked, in Arizona, to arrange a 120,000 dollar bond in order to compel a bank to hold back money the subcontractor has already earned. A business whose cash position is strong enough to do that comfortably is usually not the business in the worst trouble. It does not follow that an unbonded notice is pointless. A lender's election not to withhold is a choice made by a person who now has written notice that a claimant on this project is unpaid and who knows a lien is coming next, and many withhold anyway. California builds a small amount of transparency into that decision, because under Cal. Civ. Code 8538 a claimant may request notice of the lender's election, and a lender that elects not to withhold must give notice of that fact within 30 days to a claimant who asked. Washington and Alaska avoid the problem by structuring the duty differently, and neither asks the claimant to post anything.
A Stop Notice Deadline Is Not a Lien Deadline
A contractor in one of these four states who assumes the stop notice rides along on the lien deadline is making an error that is invisible until it is fatal. The four statutes measure from three different kinds of events, and only one of them lines up neatly with the lien. California is the easy case, because the stop payment notice window and the lien recording window are both built on the end of the job, running 30 days from a recorded notice of completion or cessation and 90 days from completion if none is recorded. Arizona is one step removed but still tethered to the lien calendar, because section 33-1063 measures the enforcement window from the expiration of the section 33-993 lien recording period. Washington is the outlier and the trap. RCW 60.04.221 runs 35 days from the date a scheduled payment was required, a date that has nothing to do with furnishing, completion, or recording. On a job with monthly draws, the window for a March payment closes in early May whether or not the claimant is still on site, still invoicing, or still on good terms with the general contractor. Washington's lien recording deadline is 90 days from last furnishing, so a subcontractor who works through September on a job where the March payment came up short has lost the stop notice for that payment months before anyone would have thought to look at a lien. Alaska splits the difference with a rule that is short but self-announcing, because the notice can be given any time after payment is past due and expires on the 91st day after the lender receives it unless suit has been commenced.
The Near Misses: North Carolina and the Statute Mississippi Lost
Two states sit just outside the group, for opposite reasons, and both are commonly miscounted as stop notice states. North Carolina has a fund-reaching remedy that genuinely works, and it is not a stop notice. Under N.C.G.S. 44A-18 a first tier subcontractor who furnished labor, materials, or rental equipment at the site has a lien upon funds owed to the contractor with whom that subcontractor dealt and arising out of the same improvement. The lien is perfected by giving written notice of claim of lien upon funds to the obligor as provided in N.C.G.S. 44A-19, served by personal delivery or in any manner authorized by Rule 4 of the North Carolina Rules of Civil Procedure. An obligor is an owner, contractor, or subcontractor in any tier who owes money to another for performance of a contract to improve real property. The difference from a stop notice is the target, because North Carolina reaches money owed up the contracting chain while a stop notice reaches undisbursed loan proceeds held by a construction lender who owes the claimant nothing. Mississippi is the cautionary case. Miss. Code Ann. 85-7-181 was a true stop notice and an unusually powerful one, because a claimant could bind funds in the owner's hands with a filed notice and no judicial process. In Noatex Corp. v. King Construction of Houston, L.L.C., a subcontractor used it to tie up more than 260,000 dollars on an auto parts plant project. The district court held the statute facially unconstitutional, reasoning that it deprived contractors of property without the minimum procedural safeguards due process requires, and the Fifth Circuit affirmed in 2013.
What the Other 46 States Give You Instead
No stop notice does not mean no route to the money. It means the routes are different, and three of them are available in far more states than the stop notice is. The first is the payment bond claim. On public work there is no lien anywhere in the country, because public property cannot be sold at a foreclosure sale. Every state has a Little Miller Act requiring a payment bond on public projects above a threshold, and the bond claim is the primary remedy, which is a claim against a surety's money rather than the owner's property. That is functionally the closest thing to a stop notice that exists nationwide. The second is the construction trust fund claim. Roughly twenty states treat construction payments as trust funds the moment a contractor receives them, held for the benefit of everyone downstream who furnished labor and materials. A contractor who spends that money on something else has not merely breached a contract, because in several states an officer or managing agent who knowingly diverted it is personally liable, and in a few the diversion is criminal. That is the remedy that survives when the contracting entity is judgment-proof. The third is the prompt payment statute. Nearly every state sets a deadline for paying a downstream party after the upstream party is paid and attaches statutory interest to a late payment, and many also shift attorney fees. It does not freeze anything, but it changes the arithmetic of stalling. The most underrated substitute is the lien itself, recorded promptly rather than at the end of the statutory window, because a recorded lien on an active project interferes with the draw process directly, given that lenders routinely condition disbursements on clear title and executed lien waivers.
Methodology
This survey classifies each state by a single question, which is whether a statute gives a private-project construction claimant a notice that directs a construction lender, owner, or public entity to withhold undisbursed project funds. Statutes were read in their official published text: A.R.S. 33-1051, 33-1055, and 33-1063 for Arizona, AS 34.35.062 for Alaska, Cal. Civ. Code 8500 through 8560 and 9350 through 9364 for California, RCW 60.04.221 for Washington, and N.C.G.S. 44A-18 and 44A-19 for North Carolina. The Mississippi classification reflects the holding in Noatex Corp. v. King Construction of Houston, L.L.C., in which Miss. Code Ann. 85-7-181 was held facially unconstitutional and the ruling was affirmed by the Fifth Circuit in 2013. The surrounding deadline and notice context is drawn from the private-project rule set behind The Mechanics Lien Management State System. Three limitations belong alongside the tables. First, a classification of none tracked is a statement about this category rather than about a state's payment remedies generally, because several states provide narrower withholding mechanisms that fall outside it, including withholding notices directed at a public body on public projects, retainage release procedures, and owner-side withholding rights that operate by contract rather than by statute. Second, North Carolina is broken out as its own category rather than folded into either group precisely because the conflation is common. Third, the bond percentages shown are the figures stated in the governing definitions and they govern whether the recipient's compliance is mandatory rather than discretionary, so they are not an estimate of what a surety will charge to issue the bond, which is a separate commercial question.
Frequently Asked Questions
What is a stop notice in construction?
A stop notice is a statutory notice that directs the party still holding construction money, usually the construction lender and sometimes the owner or a public entity, to stop paying it out and hold back enough to cover an unpaid claim. It is the counterpart to a mechanics lien, but it targets a different asset. A mechanics lien attaches to the real property and is collected by foreclosing on it. A stop notice attaches to undisbursed funds and is collected out of money that has not left the account yet. Only four states still provide one, which are Arizona, Alaska, California, and Washington.
Which states have stop notices?
Four. Arizona under A.R.S. 33-1051 to 33-1067, Alaska under AS 34.35.062, California under Cal. Civ. Code 8500 to 8560 for private work and 9350 to 9364 for public work, and Washington under RCW 60.04.221. Mississippi had a stop notice statute at Miss. Code Ann. 85-7-181 until it was held facially unconstitutional on due process grounds and the ruling was affirmed by the Fifth Circuit in Noatex Corp. v. King Construction of Houston, L.L.C. in 2013. North Carolina provides a related but distinct remedy, the lien upon funds under N.C.G.S. 44A-18 and 44A-19, which reaches money owed up the contracting chain rather than construction loan proceeds held by a lender.
Does a construction lender have to honor a stop notice?
It depends on the state and on whether the claimant posts a bond. In Arizona a construction lender may elect not to withhold unless the claimant serves a bonded stop notice accompanied by a surety bond equal to 150 percent of the claim, under A.R.S. 33-1051 and 33-1055. California works the same way, because Cal. Civ. Code 8536 directs the lender to withhold but permits it to elect not to when the notice is unbonded, and the bond that removes the election is set at 125 percent of the claim. Washington and Alaska do not run on a claimant bond. Under RCW 60.04.221 the lender must withhold from the next and subsequent draws or obtain a payment bond for the claimant's benefit, and under AS 34.35.062 a lender that keeps advancing after receiving a stop-lending notice becomes liable to the claimant directly.
Is a stop notice deadline the same as the mechanics lien deadline?
No, and in Washington the two are not even measured from the same kind of event. A Washington notice to lender must be given within 35 days of the date a scheduled payment was due, and it cannot be given until five days after that payment was missed, which is a window anchored to a payment date that can close long before the 90-day lien recording window built on last furnishing. California measures the stop payment notice from the end of the job, at 30 days after a notice of completion or cessation is recorded or 90 days after completion if none is recorded. Arizona ties the enforcement action to the lien recording period, requiring suit no sooner than 10 days after service and no later than three months after the period for recording a lien expires, under A.R.S. 33-1063.
What can I do in a state that has no stop notice?
Three other routes reach money rather than property, and they cover far more states than the stop notice does. On public work, where no lien on the property is possible, the payment bond claim under the state's Little Miller Act is the primary remedy in all 50 states. On private work, roughly twenty states impose a statutory construction trust on payments a contractor receives, which can create personal liability for the individual who diverted the money. Prompt payment statutes add interest and, in many states, attorney fees to a late payment. None of these freezes an undisbursed construction loan the way a stop notice does, but each of them reaches a source of payment that is not the building.