2009 California Civil Code - Section 3158-3159 :: Article 2. Who Is Entitled To Serve A Stop Notice And Bonded Stop NoticeCIVIL CODE
3158. Any of the persons named in Sections 3110, 3111, and 3112, other than the original contractor, may give to the owner a stop notice. Any person who shall fail to serve such a stop notice after a written demand therefor from the owner shall forfeit his right to a mechanic's lien. 3159. (a) Any of the persons named in Sections 3110, 3111, and 3112 may, prior to the expiration of the period within which his or her claim of lien must be recorded under Chapter 2 (commencing with Section 3109), give to a construction lender a stop notice or a bonded stop notice. The construction lender shall be subject to the following: (1) The construction lender shall withhold funds pursuant to a bonded stop notice filed by an original contractor, regardless of whether a payment bond has previously been recorded in the office of the county recorder where the site is located in accordance with Section 3235. (2) The construction lender shall withhold funds pursuant to a bonded stop notice filed by any other person named in Sections 3110, 3111, and 3112, unless a payment bond has previously been recorded in the office of the county recorder where the site is located in accordance with Section 3235. If a payment bond has previously been recorded, the construction lender may, at its option, withhold funds pursuant to the bonded stop notice or stop notice, or may elect not to withhold pursuant to the bonded stop notice or stop notice given by anyone other than an original contractor. (3) If, when giving the construction lender the stop notice or bonded stop notice, the claimant makes a written request for notice of the election, accompanied by a preaddressed, stamped envelope, the construction lender shall furnish the claimant a copy of the bond within 30 days after making the election. A lender shall not be liable for a failure to furnish a copy of the bond if the failure was not intentional and resulted from a bona fide error, if the lender maintains reasonable procedures to avoid such an error, and if the error was corrected not later than 20 days from the date on which the violation was discovered. The payment bond may be recorded at any time prior to the serving of the first stop notice. The notice may only be given for materials, equipment, or services furnished, or labor performed. (b) In the case of a stop notice or bonded stop notice filed by the original contractor or by a subcontractor, the original contractor or subcontractor shall only be entitled to recover on his or her stop notice or bonded stop notice the net amount due the original contractor or subcontractor after deducting the stop notice claims of all subcontractors or material suppliers who have filed bonded stop notices on account of work done on behalf of the original contractor or the subcontractor. (c) In no event shall the construction lender be required to withhold, pursuant to a bonded stop notice, more than the net amount identified in subdivision (b). Notwithstanding any other provision, no construction lender shall have any liability for the failure to withhold more than this net amount upon receipt of a bonded stop notice.
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