Arizona Laws 33-1062. Release of stop notice or bonded stop notice; surety bond
A. An owner, a construction lender or any original contractor or subcontractor who disputes any stop notice or bonded stop notice may file with the person on whom notice was served a release bond. The release bond shall be executed in an amount equal to one hundred fifty percent of the amount claimed in the notice, conditioned for the payment of any amount that does not exceed the penal obligation of the bond and that the claimant may recover on the claim. A copy of the release bond shall be served on the stop notice claimant in the same manner required for the delivery of a stop notice. On the filing and service of the release bond, the monies withheld in response to the stop notice or bonded stop notice shall be released promptly. A bond to release a stop notice or bonded stop notice under this section shall be executed by a surety company or companies holding a certificate of authority to transact surety business in this state, issued by the director of the department of insurance and financial institutions pursuant to Title 20, Chapter 2, Article 1. The bond shall be for the sole protection of the claimant who perfected such notice.
Terms Used In Arizona Laws 33-1062
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Bonded stop notice: means a stop notice that is given to any construction lender and that is accompanied by a bond executed solely by one or more surety companies authorized to transact surety business in this state pursuant to Title 20, Chapter 2, Article 1 in an amount equal to one hundred fifty per cent of the amount of the claim on the condition that if the owner, original contractor or construction lender recovers judgment in an action brought on a verified claim or on the lien filed by the claimant, the claimant would have sufficient monies to pay all costs and damages that the owner, original contractor or construction lender may sustain by reason of the stop notice claim or the lien, not exceeding the amount specified in the bond. See Arizona Laws 33-1051
- Construction lender: means any mortgagee or beneficiary under a deed of trust lending funds all or a portion of which defray the cost of the construction, alteration, repair or improvement or any assignee or successor in interest of either, or any escrow holder or other party holding any monies furnished or to be furnished by the owner or any other person as a source from which to pay construction costs. See Arizona Laws 33-1051
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Original contractor: means any contractor who has a direct contractual relationship with the owner. See Arizona Laws 33-1051
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Stop notice: means a written notice that is signed and verified by the claimant or its agent and that states in general terms all of the following:
(a) A description of the labor, professional services, materials, machinery, fixtures or tools furnished or agreed to be furnished by the claimant. See Arizona Laws 33-1051
B. If an owner, a construction lender or any original contractor or subcontractor causes to be recorded a surety bond to discharge a lien perfected by the stop notice claimant pursuant to section 33-1004 with respect to the same labor and material described in the stop notice or bonded stop notice, the surety bond shall also serve as a release bond pursuant to this section, and the monies withheld in response to the stop notice or bonded stop notice shall be released promptly on the recording and service of the surety bond on the stop notice claimant as prescribed in section 33-1004.
C. In an action to enforce payment of a claim stated in a stop notice or bonded stop notice, if a bond has been filed and served as provided in this section, a judgment for the claimant on the bond shall be against the person seeking to release the stop notice or bonded stop notice as principal and the surety for the amount the claimant recovers on the stop notice or bonded stop notice claim, including any recovery for interest, expenses, costs and attorney fees awarded by the court, that does not exceed the penal sum of the bond. If the amount the claimant recovers on the stop notice or bonded stop notice claim exceeds the penal sum of the bond, the claimant shall also be entitled to judgment against the principal for the excess amount.