Title Partners Agency, LLC offers seamless Construction Disbursing Services for all of our lending and construction partners through our sister company Nationwide Construction Disbursing, LLC. NCD offers our lending and construction partners the complete range of services including veteran underwriters, title examiners, escrow closers and attorneys. Our experienced disbursing personnel have disbursed and provided mechanic lien coverage on over $3.5 Billion of commercial and residential construction funds.
Nationwide Construction Disbursing inspects each of the projects upon which it disburses. For each inspection a report is prepared detailing category completion percentages and is supplemented by our dated digital inspection pictures. Our reports and our pictures are uploaded into our online disbursing software, Disbursa, so that all construction partners have access to this important information across all of their devices 24/7.
To view a brief demo of our disbursing software (Disbursa) and its capabilities please click or visit here: https://www.youtube.com/watch?v=y75Zi5fZob8
What is the most important function of a disbursing company?
Complete construction disbursing should include mechanic lien coverage for all loan and equity funds for the hard costs of the construction. It should provide for the collection and review of all invoices and lien waivers and communication about potential budget shortfalls. It should include monthly on-site inspections and good communication between the contractor, lender and borrower. This communication is enhanced by an online disbursing software communication tool like Disbursa – our proprietary disbursing software at NCD.
What is the most important factor in selecting a disbursing company?
Your disbursing company should have a track record of experience in the industry and offer complete disbursing and title services. They should be properly underwritten by a major national title underwriter and should be able to provide references from both lenders and contractors. Please contact us to obtain a list of our references.
Why do lenders require construction disbursing?
The primary purpose for any lending institution to utilize third party disbursing is to receive mechanic lien coverage on its first position to protect the first deed of trust or mortgage – and then help provide for an easy transition to permanent financing.
What is a mechanic lien and why are they important?
Mechanic’s liens are legal documents that essentially reserve the rights of the filer to seek unpaid compensation. They are usually filed by contractors, subcontractors, or suppliers that never received payment for work that they performed or materials that they provided on the construction of the subject property.
They are important because they may become a lawsuit commenced by the unpaid lienor to force the sale of the property so that the lien can be satisfied out of the proceeds of the sale.
Who can file mechanic liens?
Mechanic liens may be filed by any unpaid sub-contracted party on a construction project – which can potentially force a foreclosure on the property in question. This includes all three tiers of contractors:
Material suppliers to subcontractors or subs hired by sub-contractors.
What do underwriters provide in a construction disbursing process?
They establish the rules of coverage and financial stability. Our underwriter-approved process requires direct payments to all contractors, subcontractors and construction material suppliers and as such provides mechanic lien coverage for all construction projects. Each of our disbursing transactions is backed-up by a construction inspection that details completed work by each construction cost category. All transactions are reviewed to provide loan to value monitoring and mechanic lien risk management.
Our experienced construction disbursing officers continually provide a third-party review of each transaction to enable mechanic lien coverage and protect your deed of trust. Each transaction is available for review 24/7 on our online disbursing software Disbursa.
What is loan-to-value?
Loan -to-value means that the amount of the loan disbursed is equal to the value of construction completed.
It is one of the most valuable parts of our NCD services because our procedures only permit payment for invoices for completed work. We only pay for owner approved, completed and invoiced work. Our on-site inspections must verify that those items for which contractors and sub-contractors are invoicing represent completed work.
If work is not complete – or material is not at the jobsite – those items remain unpaid, and loan to value is not compromised. This loan to value monitoring is central to providing mechanic lien coverage that helps protect every deed of trust.
How do remote construction efforts work?
As you or your client’s opportunities for growth increase beyond their metropolitan area our nationwide construction disbursing services can permit your loan committee to approve construction loans for projects far beyond your state or region. Our success in nationwide construction disbursing projects from California to Florida and from Minnesota to Texas helps us understand the unique challenges in protecting your deed of trust while disbursing construction projects away from the lender’s primary lending area.
To meet these challenges our service includes on-site construction inspection services that include a brief narrative of construction organization and progress, pictures of construction progress, and completion percentages by cost category. We provide each of these inspection details to our clients in our proprietary password-protected online disbursing software Disbursa. Details provided online include funds requested; funds received, checks cut by category, the dates when checks were released, category balances, inspection pictures, inspection completion percentages by cost category, and four printable report formats.
Our experienced online construction disbursing helps provide loan to value monitoring, mechanic lien coverage, mechanic lien risk management, all to help protect your deed of trust.
Depending upon your needs our relationships with nationwide construction services can help provide you with an additional range of construction concierge services like:
- Architectural Reviews
- On-Site Construction Reviews
- 24-hour online construction/ jobsite surveillance cameras
What is the difference between a conditional lien waiver and an unconditional lien waiver?
The difference has to do with when they become effective.
Conditional lien waivers are the types of lien waivers we collect at NCD when we pay contractors, sub-contractors, and material suppliers directly. When I say paying “directly” it means that NCD is paying construction invoices with bank loan funds or owner equity funds on NCD checks.
A conditional lien waiver becomes effective only when the funds are deposited into the account of the payee – it is not effective until then. That is the “condition” – and allows the payee the security of knowing that only once the funds are in their account does it become effective.
An unconditional lien waiver is a full release of lien rights for a specific payment, which becomes effective immediately upon execution or signing.
We require this type of lien waiver for any reimbursement or as a proof of payment made by anyone else in the construction process. If a foundation company has paid for concrete and is seeking reimbursement for those funds – we must have an unconditional lien waiver from the concrete supplier for that amount – with the appropriate invoice.
How often should construction draws be completed? Are there limits to the number of draws that a project may request or receive? Are there extra fees for exceeding those suggested number of draws?
Residential draws should be limited to twice monthly and commercial draws be completed once a month – but we remain ready to provide our construction partners with the flexibility to create additional draws in order to assure construction progress. There are no additional fees for these added draws.