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 Montana
Montana has no stop payment notice (stop notice) statute. Unpaid subcontractors and suppliers protect themselves through construction liens under Mont. Code Ann. § 71-3-521 et seq. The closest analog is a lien bond substitution under § 71-3-551, which lets a property owner, general contractor, or subcontractor discharge a recorded construction lien by filing a bond equal to 1.5 times the lien amount — but this is triggered by a recorded mechanics lien, not a stop notice.
- A review of the full Part 5 Construction Liens table of contents (§§ 71-3-521 through 71-3-564) shows no section titled 'stop notice,' 'stop payment notice,' or equivalent.
- Under § 71-3-551, the bond may be filed by the contracting owner of any interest in the property, the original contractor, or any subcontractor, at any time before the lien claimant commences a foreclosure action or within 30 days of service of a foreclosure complaint.
- Upon acceptance of the bond by the county clerk, the recorded lien is discharged; the claimant then pursues recovery against the bond rather than the property.
- If the claimant wins, the principal and sureties must pay the judgment plus interest, costs, and attorney fees, subject to the bond cap.
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.