5 Ways To Automate Lien Document Management

Lien is a legal term for an agreement that helps guarantee all parties are properly covered in a business relationship and payments are made on time. Residential construction Contractors, Subcontractors and Suppliers are typically required to execute sworn statements and lien waiver and release forms as a prerequisite to payment. A lien waiver is a document requested, collected and tracked by Builders from everyone on the job when they’re paid, including Subcontractors, Suppliers and any other potential lien claimant. In basic terms, a lien waiver is a receipt or legal proof of payment.

What is a Lien Release?

A lien release means the lien that was levied against the property has been released, ending the specific stakeholder’s legal obligation. This document is sometimes referred to as a lien cancellation. Although the timing of a lien release depends on location, most states require it within 10 days of the date the payment clears1.

Despite the impact of COVID-19, new residential home construction in the U.S. was projected to reach about $881 billion in 2022, including, single-family, multi-family and home improvement additions2. Most Home Builders preemptively use liens on properties they’re building and a single project can involve up to 50 waivers. By automating the lien process, Builders can eliminate the extraordinary amount of time it takes to manually prepare, deliver and track these documents. Here are five key tasks that automated lien document software can handle. 

Streamline the Process By Going Paperless                       

Incorporating a completely electronic, user-friendly process eliminates physical paperwork, signing, faxing and delivering documentation. Sending and collecting lien waivers from one platform streamlines the entire process, thereby saving time and money. After Suppliers and Trades digitally sign a document, the software automatically sends it to the Builder with a notification alert.

Store Documents Safely and Securely

Automatically storing lien documents in a document management system enables quick retrieval whenever necessary and eliminates the risk of losing or misplacing documents and forms. Detailed access to lien reports makes it easy for all stakeholders to keep track of signed lien documents by project or document.


Upload State-Specific Lien Documents

Many states regulate the verbiage and appearance of lien forms, to varying degrees. Forms that fail to meet a state’s specific requirements may be deemed legally invalid. Recently, the American Institute of Architects’ (AIA) released official lien waiver and release forms for Arizona, California, Florida, Georgia, Massachusetts, Michigan, Missouri, Nevada, Texas, Utah and Wyoming, and one general form to be used for remaining states. Prior to this, many Builders used their own forms, especially in unregulated states3. Given the considerable variations in state-specific lien requirements, it’s essential to look for a platform that allows easy uploading of legally approved state lien documents.

Save Time with Real-Time Transactions

With secure, virtually immediate transactions that occur in real-time, Builders and Suppliers alike can save a substantial amount of time, especially over the course of an entire year.

Get Added Value and ROI

Most Builders have a team or person that tracks liens using spreadsheets. An automated lien process that enables electronic signatures that also sends alerts when documents haven’t been signed reduces costs. This eliminates the need to perform inefficient manual tasks, freeing employees up to do more substantive work.

Automate Lien Document Management with Hyphen Solutions 

Hyphen Solutions Lien Release software automates and streamlines the lien management process with superb efficiency. By first merging payment data into a user-selected lien document, then automatically sending the document to the corresponding Supplier, the risk of any process slowdowns is substantially reduced. Download our Lien Release PDF and Schedule a demo today to see how BuildPro's suite of products, including lien release software, can improve your business processes. 



1Source: https://www.angi.com/articles/what-contractor-lien-release-or-subcontractor-lien-waiver.htm 

2Source: https://www.statista.com/statistics/226482/projected-value-of-total-us-residential-construction/

3Source: https://www.natlawreview.com/article/you-ll-be-seeing-more-these-aia-releases-new-lien-release-forms