120 Stop Notices

• Jurisdiction: Arizona

The 1998 amendments to Arizona’s lien law added stop notice provisions modeled after California law. A.R.S. § 33-1051 et seq. The stop notice is a new and distinct remedy, separate and apart from lien rights or claims on payment bonds. The stop notice effectively creates a lien on undisbursed construction funds held by the owner or construction lender.

(a) Against Owners

An unpaid subcontractor or material supplier may serve a stop notice on an owner. The stop notice attaches to all undisbursed construction funds. If the owner receives a stop notice (bonded or not bonded), the owner must then withhold the disputed amount from the contractor. A.R.S. § 33-1057(A). However, the owner has the option to hold the monies if a payment has been recorded pursuant to A.R.S. § 33-1003. (See Section 412(f) of text.) If the owner elects not to withhold pursuant to a stop notice by reason of the payment bond having been recorded, the owner shall give notice within 30 days and furnish a copy of the bond. A.R.S. § 33-1057(B).

The stop notice is a written notice that is signed and verified by the claimant or its agent and states in general terms all of the following:

(a) A description of the labor, professional services, materials, machinery, fixtures or tools furnished or agreed to be furnished by the claimant.

(b) The name of the person to or for whom the labor, professional services, materials...