A. A stop notice shall not be effective unless it is accompanied by a bond equal to one and one-quarter of the amount of the claim stated in the stop notice. The claimant shall be the principal on the bond, and the bond shall have good and sufficient sureties executed by a corporate surety entity.
B. Requirements of posting bond set forth in this section shall be satisfied when the claimant posts cash collateral with the recipient of the stop notice, one and one-quarter times the amount of the payment or payments claimed.
C. The bond shall protect the owner, the original contractor and the construction lender against any damages that may be incurred by them because of the delivery of the stop notice.
History: Laws 1989, ch. 301, § 7.