What a stop payment notice release bond is
In a few states, an unpaid subcontractor or supplier can serve a stop payment notice (also called a stop notice) on the owner or construction lender, which then holds back money owed on the job. A release bond lets that money be paid out; the claimant then claims against the bond instead.
In Michigan
Michigan does not use a stop payment notice procedure. Unpaid contractors, subcontractors and suppliers use construction liens under the Construction Lien Act, and a lien can be discharged by filing a bond of twice the lien amount with the county clerk (MCL 570.1116).
- On public projects, unpaid subcontractors and suppliers claim on the payment bond under MCL 129.201 and following.
You need this bond if you're
- A general contractor whose payments are being held
- A property owner or public agency holding funds
- A construction lender holding loan funds
What the surety looks at
The claim, the dispute behind it and your finances.