California code generally requires withholding of funds due to a contractor or materials supplier when the owner of a project or construction lender receives a stop notice from a claimant. A stop notice release bond is an efficient mechanism for definitively discharging the notice. Pursuant to C.C.C. Section 3196-3205, Article 5, "If the original contractor or subcontractor disputes the correctness, validity or enforceability of a stop notice, the public entity may in its discretion, permit the original contractor to file with the public entity a stop notice release bond."
The surety bond must be issued by a surety company licensed to do business in California and written in an amount no less than one hundred twenty five percent (125%) of the claim as identified in the stop notice. The surety's obligation is to guarantee the payment of any sum which the claimant may recover on the identified claim and the costs of any law suit filed in the matter. The process and financial assurance requirement mirrors those of a California mechanic's lien release bond, however counter-stop notice procedures generally apply to public entity owners rather than private parties.
California surety bond leader, Surety One, Inc. is THE most agile underwriter of stop notice bonds. Our expertise in manuscripting bond forms acceptable to obligees, same day bond execution and and authenticated surety bond delivery are unparalleled. We underwrite discharge and release bonds in all fifty states, Puerto Rico and U.S. Virgin Islands. Call (800) 373-2804, email Underwriting@SuretyOne.com or click here for a live chat for application materials and assistance with your California stop notice release bond or any other surety need.
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