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 Mississippi
Mississippi's stop notice statute, Miss. Code § 85-7-181, lets an unpaid subcontractor notify the owner to hold back money, but it has no release bond procedure. In 2013 the U.S. Court of Appeals for the Fifth Circuit held the statute facially unconstitutional.
- The court noted the statute requires no bond from the subcontractor before the funds are held.
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.