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 Nebraska
Nebraska does not have a stop payment notice statute. Unpaid subcontractors and suppliers on private projects use mechanics liens under the Nebraska Construction Lien Act (Neb. Rev. Stat. §§ 52-125 to 52-159); on public projects they claim on the payment bond under § 52-118. Neb. Rev. Stat. § 52-135 provides an optional 'Notice of Right to Assert a Lien' that a claimant may serve on the contracting owner, but this does not obligate a construction lender to withhold funds and is not a stop payment notice. Because Nebraska has no stop payment notice mechanism, there is no release bond for one.
- Neb. Rev. Stat. § 52-141 provides a lien-release (substitution) bond allowing an owner or prime contractor to post bond so that construction liens do not attach to the real property — this is a lien-discharge bond, distinct from a stop payment notice release bond
- The § 52-141 lien-release bond must equal 50% of the contract price for contracts up to $1 million, 40% for contracts $1 million–$5 million, or $2.5 million for contracts over $5 million
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.