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The Benefits of Automated Lien Management Software in Residential Construction

A construction lien provides Builders, Subcontractors and Suppliers with legal recourse to get paid for their work and any materials or supplies purchased for a project. In addition to the challenges posed by different state lien requirements, projects with retainage, change orders and “extra work” can present even bigger challenges. Many Builders still process lien releases and waivers manually, doing the research, printing out forms and sending them out by snail mail. Manual processing poses a significant obstacle to quick and easy exchange and management of these documents. Read on to find out how lien waiver software can help make the lien process easier and simpler for all stakeholders, while ensuring compliance with widely varying and often unclear state lien requirements. 

Time and Cost Savings 

Automating the lien process eliminates endless hours preparing documents, mailing them and waiting for lien waivers to be signed, sealed and delivered back to you. An automated lien process that enables electronic signatures and sends alerts when documents haven't been signed saves significant time and costs associated with these manual tasks. 

Optimized Collaboration and Communication 

Poor communication is a major contributor to project delays in residential construction. This can take the form of delays in the flow of information, directing communication to the wrong stakeholders or simply unclear communication. According to a Project Management Institute research study, $75 million of every $1 billion spent on projects is “at risk due to ineffective communications.” While this data isn’t specific to the construction industry, it underscores the importance of clear communication in all project management and the role of automated lien processing in improved collaboration and communication. 

Improved Accuracy and Compliance 

Although lien waiver forms are intended to protect all stakeholders that sign them, not all lien waivers are created equal. Only 12 of 50 U.S. states spell out what information should appear on the form and how it should appear. Moreover, construction lien laws differ widely from state to state. Variations include the amount of time in which to place liens, as well as to release them. If a state statute requires use of a statutory lien waiver form, any form that deviates from the mandated document almost always leads to invalidation. Uploading legally approved state lien documents helps ensure staying compliant with complex and even confusing state lien requirements. 

Streamlined Documentation Process 

In recent years, the construction industry has become increasingly digitized. It’s much easier to track documents and keep them organized with the right lien management software. Automating lien documentation streamlines the entire process by eliminating guesswork. 

Enhanced Risk Management 

With manual processes, the risk of losing or misplacing documents is high. If lien documents are mailed, the risk is even greater given the increasing incidence of mail theft. Secure, electronic access to lien documents enables quick retrieval and eliminates the risk of documents with sensitive information getting lost or stolen in the mail. 

Reporting and Analytics 

Most Builders have a team or person that tracks liens using spreadsheets. Detailed access to lien reports makes it easy for the assigned person to keep track of liens by project or document and follow up to ensure projects move efficiently through the pipeline. 

Scalability and Adaptability 

Lien waiver software that integrates with existing project management platforms enables greater scalability and adaptability. Access to user-selected lien documents makes it easy to create various lien waivers for any state and different circumstances. 

Simplify Lien Management with Hyphen Lien Release 

Developed by Builders for Builders, lien release software in BuildPro makes the lien process more efficient and accurate than ever before. Schedule a demo to see how lien release software can improve all the processes discussed above and more.