Liens on Funds, Stop Notices, and Public Improvement Liens

What Are Liens on Funds, Stop Notices, and Public Improvement Liens?

A Lien on Funds (in some states referred to as a stop notice or public improvement lien) is a tool available in certain states to help stop the flow of funds on a project until it can be shown that you have been paid.

Serving a lien on funds may halt payment to your debtor or to the general contractor, and in some cases can even require the lender to withhold money.

Though the laws vary by state, one thing does tend to be consistent – the lien on funds will likely bring attention to your non-payment situation.

At first, this may seem counterproductive.  You want money to flow down to you, so why would you do something to stop that from happening?

Unfortunately, not all funds continue to flow as they should – especially to those further down the contractual chain.  A lien on funds can make an owner or general contractor aware that your customer hasn’t paid you.

Bringing the issue of non-payment to their attention may be what is needed to shake things up in the chain of supply.

Lien on Funds and Public Improvement Lien

These two are similar – lien on funds and public improvement lien. Typically, it’s a lien against the money owed by the Project Owner under contract with the Prime Contractor.

Stop Notice

A stop notice is a notice to party paying for work of improvement of money due, which can obligate that party to withhold sufficient funds to cover noticed amounts.

Here’s a quick look at which states offer this type of security!

Most Recent Resources

Blog

No Lien Rights for Rental Equipment Companies in Pennsylvania

Review this recent Pennsylvania legal decision and how UCC filings are poised to be the payment leverage rental equipment companies need.
Read More
infographic
Infographic

Primary Types of Lien Waivers

This infographic reviews the fundamentals of conditional, unconditional, partial, and final lien waivers. Ready to learn more about the primary types of lien waivers and which waiver could provide you with the best leverage?

Read More
conference
Conference

Credit Research Foundation 2024 August Forum & Expo

The Credit Research Foundation is excited to host this in-person Forum and Expo offering educational sessions curated by industry experts, several opportunities for peer group networking, and dedicated time in the exhibit hall.
Read More