Stop Lending Notices in Alaska

Posted about 1 year ago. Applies to Alaska, 0 helpful votes

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The Stop-Lending Notice. (Alaska Stat. 34.35.062)

a. If you are entitled to a lien and your bill is past due, you may issue the lender a Stop-Lending notice. The notice must concurrently be given to the owner and each prime contractor with whom or through whom you have contracted.

b. The Stop-Lending notice must state:

(1) to instruct the lender to stop disbursing, advancing, or otherwise providing construction financing for the project;

(2) it must be verified by the claimant;

(3) the claimant’s name, address and telephone number;

(4) the description of the labor, material, service, or equipment furnished by the claimant and state the name of the person to whom furnished;

(5) the description of the real property improved by the labor, material, service, or equipment and state the name of the person the claimant believes to be the owner of the real property; and

(6) the amount due and unpaid to the claimant for the labor, material, service or equipment.

c. The Stop-Lending notice lasts only 91 days from the date the lender receives the notice unless you file a suit on the claim. You may revoke the Stop-Lending Notice. Failure to file suit timely or revocation of the Stop-Lending notice terminates the lender’s liability.

d. Lenders that disburse, advance or otherwise provide financing for the project after receiving the stop-notice is liable to the lienor for the lesser of:

(1) The amount of money subsequently disbursed. If there are multiple stop notices outstanding when funds are disbursed the proceeds are applied in order of the priority rules.

(2) The amount owed to the lienor including interest, costs, and attorneys fees for labor, material, service or equipment furnished for the project by the claimant as established by a written agreement signed on or after the date of the stop-lending notice, by the claimant, owner and prime contracted; or by a court judgment in a suit by the lienor against the owner, the claimant and the claimants debtors were named and served.

(3) 150% of the amount in the stop lending notice.

Additional Resources

Alaska Law Offices, Inc.

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