Grand Rapids-headquartered Sun Title Agency (Sun Title) has introduced the EZ-Draw™ Construction Draw and Lien Waiver System in order to eliminate the time and resources required to collect and coordinate lien waivers after construction draw payments are made.

In essence, EZ-Draw™ will allow a subcontractor’s acceptance of a check, in combination with proprietary language included in the check memo, to satisfy Michigan’s statutory requirements on the collection of lien waivers after construction draw payments. The intent is to eliminate hours of time and effort extended on a monthly basis matching payments to separate lien waivers.

In the most typical construction draw scenario, payments are made to subcontractors in connection with a sworn statement, after which the builder, developer or general contractor is responsible for collecting and submitting on a timely basis all lien waivers (whether it is a partial payment in the middle of the construction process or the final lien waiver at the end of the job). All lien waivers must be submitted before the next month’s draw request to avoid delays in receiving construction endorsements from the title company and funds from the lender.

For most title companies, procuring and coordinating these waivers can result in costs, delays and frustration on the part of all transaction participants.

EZ-Draw™ combines the lien waiver with the actual check payment to eliminate the extra work to collect and coordinate separate lien waivers. When using EZ-Draw™, the parties enter into a one-time Master Lien Waiver Agreement that will apply to any construction projects they work on together. The Agreement simply acknowledges the system of combining the lien waivers with the draw payments. The party making the payments to the subcontractors pursuant to a sworn statement (e.g. the builder, developer, general contractor, lender or title company) then adds a property or invoice reference to the check stub, a note on the check’s memo line, and the lien waiver language to the check stub or as an attachment to the payment. This language can be easily added to check templates in the firm’s accounting software, pre-printed on checks used for construction draws, or attached to the check as a separate notice. When the next sworn statement is submitted for a construction draw request, it will be accompanied by a copy of the check that was written to the subcontractor (including the check stub with the property or invoice details, the reference on the memo line, and the lien waiver language) and a copy of the cleared check (front and back) obtained from the bank. The copy of the check (with the stub) combined with the copy of the cleared check will constitute the legally-binding lien waiver necessary to issue the next construction draw.

“Quite frankly, the construction lien waiver process in Michigan is—and always has been— a time consuming process for lenders, contractors, builders and title agencies alike,” said Andy Lofgren, Executive Officer of the Homebuilders Association of Greater Grand Rapids. “The concept of essentially using the subcontractor’s check endorsement as a waiver is brilliant and could completely change the way we go about the process in Michigan.”

According to Sun Title President and Co-Owner, Lawrence Duthler, EZ-Draw™ was born of necessity, but has all but revolutionized his firm’s work with construction draws. “In the past, we had no choice but to spend countless, frustrating man-hours chasing down subcontractors again and again to sign lien waivers. By combining the practicality of check acceptance with the statutory requirements for the lien waivers, we’ve saved ourselves (and our lending and builder clients) hundreds of otherwise wasted hours.”

Duthler notes that one of Michigan’s leading law firms has confirmed that EZ-Draw™ meets statutory requirements for lien waiver.

To learn more, go to www.suntitle.com or call (616) 458-9100.

About Sun Title

Sun Title Agency is Michigan’s most innovative, customer-focused, tech-savvy title agency. Founded in 2005, Sun Title provides an unparalleled level of service. From the moment that the title commitment is delivered up to the closing, Over the past ten years, Sun Title has created the most culture-centric title agency in Michigan while continuing to improve the closing experience. Lawrence and Tom are guided by the company’s core values that make up the company’s culture. Now serving all of Michigan from seven offices around the state, Sun Title considers itself a “YES” company of over 80 passionate, high-performing individuals that obsesses over the closing experience. For more information, find them on Facebook at www.facebook.com/ Sun-Title-Agency, visit www.suntitle.com or call 616-458-9100