hereby requests that Owner provide proof of adequate funding for the Project. If you have any questions or comments, please contact Contractor at your convenience.
Sincerely,
Contractor
C. Notice of Claim Provisions for the Owner's Failure to Make Timely Payment to the Contractor
If the owner fails to make timely payment to the contractor, most standard contract forms allow the contractor to stop work after proper notice to owner until full payment is received, plus interest.
1. AIA A201 General Conditions
Per Section 9.7 of the AIA A201, if the architect fails to certify the contractor's payment application within seven days of receipt or if the owner fails to fund the contractor's certified payment application within seven days from when required by contract, then the contractor may, upon seven days' notice to the owner and the architect, stop the work until the issue is cured. The contract time shall be extended appropriately, and the contract sum shall be increased to account for the contractor's reasonable costs of shutdown, delay, and start-up. In addition, the contractor is entitled to interest as provided for in the contract documents.
Seven-Day Stop Work Notice per the AIA A201
Via Certified Mail
April 23, 20__
Owner and Architect
Address
Re: Project: Project Name
Subject: Section 9.7 – Late Payment Application Certification Notice/Stop Work Notice
Dear Owner and Architect,
Pursuant to Section 9.7 of the AIA A201 General Conditions, Contractor hereby notices Owner and Architect of Architect's failure to certify Contractor's Payment Application No. 6 within seven days as required by Section 9.4.1 and Architect has further failed to certified this application within an additional seven days thereafter. Thus, Contractor intends to stop work on the Project if certification is not made within seven days of that date of this notice. If you have any questions or comments, please contact Contractor at your convenience.
Sincerely,
Contractor
2. ConsensusDocs 200
Per Section 9.5 of ConsensusDocs 200, if the contractor does not receive payment from the owner, through no fault of the contractor, within seven days after payment is due, then the contractor can provide the owner a seven-day notice and may stop work until the owner pays the contractor the full amount due, plus interest.
Seven-Day Stop Work Notice per the ConsensusDocs 200
Via Email
April 23, 20__
Owner
Address
Re: Project: Project Name
Subject: Section 9.5 – 7-Day Stop Work Notice for Lack of Payment
Dear Owner,
Pursuant to Section 9.5 of the ConsensusDocs 200, Contractor hereby notices Owner of its failure to fund Contractor's approved Payment Application No. 12 within 30 days per the Agreement plus an additional seven days. Hence, Contractor hereby provides notice to the Owner that Contractor will stop work on the Project if Owner fails to fund this payment application within seven days of the date of this letter. If you have any questions or comments, please contact Contractor at your convenience.
Sincerely,
Contractor
3. EJCDC C-700 General Conditions
Per Section 16.04.B of the EJCDC C-700, if the engineer fails to act on the contractor's payment application within 30 days after submission, or the owner fails to pay the contractor within 30 days after it becomes due, the contractor may, after seven days written notice to the owner and the engineer, stop the work until full payment is made, plus interest.
Seven-Day Stop Work Notice per the EJCDC C-700
Via Hand Delivery
April 23, 20__
Owner and Engineer
Address
Re: Project: Project Name
Subject: Section 16.04.B – 7-Day Stop Work Notice for Lack of Certification
Dear Owner and Engineer,
Pursuant to Section 16.04.B of the EJCDC C-700, Contractor hereby notices Owner and Engineer of Engineer's failure to take action on Contractor's Payment Application No. 7 within 30 days per the Agreement. Hence, Contractor hereby provides notice to Owner and Engineer that Contractor will stop work on the Project if Engineer fails to act on this payment application within seven days of the date of this letter. If you have any questions or comments, please contact Contractor at your convenience.
Sincerely,
Contractor
D. Notice of Termination Provisions by the Contractor to the Owner
While most contract forms include a provision whereby the contractor can terminate the owner, this remedy is rarely exercised. Regardless, it is important for contractors to understand the notice requirements and scenarios where it can terminate the owner.
1. AIA A201 General Conditions
Per Section 14.1 of the AIA A201, the contractor can terminate the owner, upon seven days' written notice to the owner and the architect, if any of the following scenarios exist, through no fault of the contractor:
If the work is stopped for a period of 30 consecutive days because:an order of a court or other public authority that requires all work to be stopped;an act of government requires all work to be stopped;the architect has not certified the contractor's payment application or the owner has not made payment to the contractor within the time stated in the contract documents; orthe owner has failed to furnish the contractor proof of funding per Section 2.2.
if the owner repeatedly suspends, delays, or interrupts the entire work and it causes a delay, in aggregate, of more than 100 percent of the total number of days scheduled for completion, or 120 days in any 365-day period, whichever is less.
if work is stopped for 60 consecutive days because the owner has repeatedly failed to fulfill the owner's obligations under the contract documents with respect to matters important to the progress of work.
Upon proper termination by the contractor, the contractor is entitled to recover payment for all work executed, as well as reasonable overhead and profit
