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The documentation chain in construction is riddled with delays. Many general contractors (GCs) and subcontractors are seeking ways to streamline their document-heavy processes. Switching to electronic signatures is one of the first places they typically look.Ìý

Lien waivers are particularly time-consuming documents for GCs and subs. Considering that some contractors collect hundreds of lien waivers each month, it’s easy to see how streamlining this process can save everyone a ton of time. But with so much hinging on these critical documents, GCs and subs often wonder if electronic signatures are valid for lien waivers.Ìý

If you’re a GC considering switching your lien waiver process from wet signatures to e-signatures or a sub wanting to know how this switch affects you, you’re in the right place. This article will cover:

• Legality of e-signatures in construction
• Common questions about e-signatures for lien waivers
• Benefits and considerations of switching to e-signatures
• Practical tips for implementing e-signatures effectively

Legal Requirements and Enforceability of E-Signatures for GCs and Subs

According to federal law, since 2000. Two acts—the (or the “E-Sign Actâ€�) of 2000 and the ) of 2011 are at play here.ÌýÌý

Every state has a variable or similar version. These laws apply to all documents related to a transaction, including construction documents like contracts, statements of work, change orders, purchase orders, and more.Ìý

Common Questions About E-Signatures for Lien Waivers

Let’s cover some of the most frequent questions we hear from GCs and subs about using e-signatures for lien waivers.

Are electronic signatures valid for lien waivers?

Yes, electronic signatures are valid for lien waivers everywhere in the United States. This applies to all four types of lien waivers on every type of construction project.ÌýÌý

How does this affect lien waiver notarization?

Even though e-signatures are valid, several types of construction documents still require notarization.ÌýÌý

Two states, Wyoming and Mississippi, require lien waivers to be notarized. Texas used to, but dropped this requirement in 2022. Beyond state mandates, GCs can still require notary signatures, which can help prevent disputes down the road.Ìý

If a GC requires lien waivers to be notarized, the . Signers connect with a notary through a webcam, upload a PDF of the document, and verify their identity according to state requirements. Then, the signer and the notary electronically sign the document, and the notary affixes an electronic version of their seal.Ìý

Does accepting electronic signatures for lien waivers increase risk?

Although e-signatures are legally valid, a sub can technically contest the validity of an electronically signed lien waiver. The same possibility applies to pen-and-ink signatures, however. So one isn’t more risky than the other.

In either case, the GC must be able to:

• Prove that the signer intended to sign the document
• Attribute the electronic signature to the signer
• Ensure the signature is logically associated with the waiver

Reducing the Risk of Electronic Signatures on Lien Waivers

Even though all forms of electronic signatures are considered valid, it’s a standard precaution not to accept an electronically signed lien waiver sent via email. The best way to prevent potential disputes from arising is to implement a digital signature tool that has built-in security measures to control document access and prevent people from tampering with e-signed documents.

Subs can also request that lien waivers be sent via a digital signature tool. This prevents anyone from applying their signature without their knowledge.ÌýÌý

Benefits of Switching to E-Signatures

Switching to e-signatures has numerous benefits for contractors. That’s why , and another 38% are considering it.Ìý

Efficiency is the biggest reason that contractors choose to accept e-signatures. It significantly speeds up lien waiver collection by making it easier for subs to sign and submit lien waivers during every payment cycle.Ìý

Additional benefits of e-signatures include: 

• Reduced administrative burden: Since it’s easier for subs to electronically sign lien waivers, the accounting staff spends far less time chasing down signed waivers.
• Improved compliance: If you’re using a digital signature solution, you have a built-in audit trail with timestamp records for every signature.
• Fewer errors: Digital signature tools also include field validation, so you don’t have to worry about anyone missing a signature.ÌýÌý 
• Faster payment cycles: With lien waivers being a core component in payment cycles, it stands to reason that when GCs collect lien waivers faster, they can issue payments faster. This is a big win for everyone. GCs who pay quickly have better reputations, and subs who get paid faster have healthier cash flows.ÌýÌý

Practical Tips for Implementing E-Signatures Effectively 

While many construction companies use an electronic signature app like DocuSign or PandaDoc when it comes to signing contracts, these tools aren’t tailored to the unique needs of construction companies.Ìý

Construction-specific tools like Siteline can further streamline the document-heavy processes related to construction accounting. You can upload your digital signature in the system to expedite pay app creation/submission, change order approvals, and lien waiver submission, including collecting lower-tier lien waiver signatures.

Plus, contractors who use a lien waiver management tool like Siteline collect lien waivers six times faster while saving seven days per month. Siteline streamlines the lien waiver process by: 

• Automatically generating, sending, and collecting signed waivers from all contractors and suppliers
• Providing instant visibility into lien waiver status
• Delivering an easy signing experience for everyone 

If you’re ready to press the easy button on lien waiver management, Siteline is the way to go. Request a demo today.Ìý