Stop Notice Bonds
Stop Notice Bonds are obtained by contractors, subcontractors and suppliers when they are filing a stop notice with the project lender. Stop notices are often done in conjunction with a mechanic's lien. The stop notice is given to the construction lender telling them not to release all the proceeds of a construction loan because they have not been paid. This prevents the property owner from spending or diverting the fund from the project. Before the lender will withhold these funds, they require a Stop Notice Bond that will protect them in the event they are sued by the owner for wrongfully withhold the funds.