Free Sworn Construction Statement Form in PDF

Instructions on Writing Sworn Construction Statement

Completing a Sworn Construction Statement form is a crucial step in ensuring full disclosure of the construction costs and the parties involved throughout the process. This document, necessary for certain financial transactions involving construction loans, provides a breakdown of all costs related to the construction project, including materials and labor. It also lists all subcontractors and suppliers involved, ensuring transparency and facilitating the disbursement of loan funds according to the project's progression. Following the correct steps in filling out this form is essential for the integrity of the financial agreement and to meet the requirements set by lenders and title companies.

1. Start by entering the Owner’s Name at the specified space on top of the form.
2. Provide the Property Address in the space following the owner's name.
3. Attach a list of all subcontractors and suppliers to the Statement. Ensure the list is complete and accurate, including any that may be added or changed during the construction process.
4. Under the section titled ITEMS, input the financial details for each aspect of the construction project. This includes listing the total cost, amount paid, and balance due for each item such as land, surveys, permits, architectural services, materials like lumber and concrete, as well as labor costs including excavation, foundation work, and any subcontracted services.
5. At the bottom of the ITEMS section, ensure that all details are summed up in the TOTALS row accurately reflecting the entire cost of the project.
6. Under the statement acknowledging the completeness and correctness of the attached list and the cost items, input the loan amount that is being secured by a mortgage on the property in the space provided.
7. Sign and date the form in the presence of a notary as the contractor, then have the notary public sign, providing their seal to validate the authenticity of the signatures.
8. The form should also include the contractor’s title and the owner’s signature to affirm that both parties agree to the statements made and the financial details provided.
9. Review the form and attached list for accuracy and completeness before submitting it to the lender or title company. Any changes to the project that would affect the information on the form should be communicated immediately to the relevant parties.

Upon submission, this Sworn Construction Statement will serve as a foundational document to regulate the disbursement of funds from the loan, ensuring that all financial elements of the construction project are transparently managed and documented. This is crucial in maintaining trust among all parties involved and in preventing legal disputes over construction costs and payments.

What is a Sworn Construction Statement?

A Sworn Construction Statement is a document that outlines the financial details of a construction project. It lists the owner’s name, property address, and includes details such as land, survey, permits, materials, subcontractors, and suppliers involved in the construction. This statement provides an itemized list of costs, payments made, and balances due for each aspect of the project. The document serves as an official declaration by the contractor and property owner confirming the accuracy of all material costs and payments to subcontractors and suppliers. It is essential for securing loans or mortgages against the property and ensuring a clear financial understanding between owners, contractors, lenders, and title companies.

Why is it important to attach a list of subcontractors and suppliers to the Sworn Construction Statement?

Attaching a list of subcontractors and suppliers to the Sworn Construction Statement is crucial for several reasons. It provides transparency about who is involved in the project and their roles, ensuring that all parties contributing to the construction are duly acknowledged and compensated. This list helps in verifying that all costs are accounted for and aids in preventing disputes over payments. Moreover, for the lender or title company, it offers a comprehensive view of the project's scope and the distribution of funds, which is vital for loan disbursement and managing risk.

Can changes be made to the Sworn Construction Statement?

Yes, changes can be made to the Sworn Construction Statement. However, any adjustments to the list of subcontractors, suppliers, or the statement itself must be communicated to and approved by the lender or title company. This ensures that all financial transactions remain transparent and that the loan or mortgage agreement reflects the true cost of the project. Amendments might require additional documentation, such as revised contracts or updated lien waivers, to maintain the accuracy and integrity of the financial agreements.

What happens if the cost of construction increases?

If the cost of construction increases, the owner or contractor must inform the lender and the title company of the adjustments. Additional owner deposits may be required to cover the increase in costs. No claims or orders related to the escalated costs will be processed until the relevant parties have been notified and the additional funds have been secured. This process is crucial for maintaining the financial balance of the project and ensuring that all parties are aware of and agree to the cost changes.

How does the Sworn Construction Statement affect loan disbursement?

The Sworn Construction Statement directly influences the disbursement of loan funds. It acts as a financial blueprint for the project, detailing the costs associated with each phase of construction. Lenders and title companies rely on this document to release funds incrementally, based on the progress and needs of the construction. The statement, along with lien waivers, assures the lender that their investment is being used appropriately, thereby facilitating the smooth flow of funds from loan initiation to project completion.

What role does the Title Company play in accordance with the Sworn Construction Statement?

The Title Company plays a critical role in managing the funds and ensuring that all financial transactions adhere to the Sworn Construction Statement. As the appointed Escrow Agent, the Title Company is responsible for holding and disbursing funds throughout the construction process. They act on behalf of the lender, releasing payments to contractors and subcontractors based on lender’s inspections and the progress of construction. Additionally, the Title Company helps in resolving any disputes related to payments, liens, or the execution of the construction contract, safeguarding the interests of all parties involved.

Filling out a Sworn Construction Statement correctly is crucial for a smooth construction process. Unfortunately, people often make mistakes that can lead to delays, legal complications, or financial issues. One common mistake is not listing all subcontractors and suppliers. This oversight can result in incomplete information being provided to lenders or title companies, which might affect the release of funds or the finalization of payments.

Another frequent error is inaccurately reporting the total cost, amount paid, and balance due for each line item. This can happen when individuals rush through the form without verifying the figures with their financial records. Such inaccuracies can cause disputes over payment, potentially leading to legal challenges or liens against the property.

Changes to the construction project are inevitable, yet failing to update the Sworn Construction Statement accordingly is a significant mistake. Whether it’s a change in the choice of suppliers, an increase in scope, or variations in material costs, these alterations need to be documented and reported to the relevant parties. Failure to do so could lead to underfunding of the project or disputes with the lender or title company.

Underestimating the importance of the declaration at the end of the form is also a common pitfall. By signing the document, the contractor and property owner confirm that all information is accurate and that there are no outstanding contracts or dues other than those listed. However, if this declaration is not thoroughly reviewed and properly understood, it may inadvertently lead to false statements, putting the signatories at risk of legal consequences.

Not providing additional owner deposits to cover increases in construction costs when required is another mistake. This oversight can halt the construction process due to insufficient funds being available, leading to delays and potential contractual disputes with the construction team.

Ignoring the need for lien waivers is yet another common error on the Sworn Construction Statement. These waivers are crucial for ensuring that subcontractors and suppliers will not file a lien against the property for unpaid bills. Neglecting this step can result in legal complications and additional costs to clear the property title.

Lastly, failing to appoint the Title Company as the Escrow Agent as outlined in the statement can lead to misunderstandings about who is authorized to handle the funds. This can complicate the payment process to contractors and subcontractors, leading to delays or interruptions in the construction project.

In summary, completing the Sworn Construction Statement with careful attention to detail and accuracy plays a significant role in the success of a construction project. Avoiding these common mistakes helps ensure a smoother process, from funding to final construction, and minimizes the risk of financial or legal issues.

The Sworn Construction Statement form is a vital document highlighting the comprehensive budget of a construction project, including material and labor costs. It serves as an official record that all costs are accounted for, with obligations detailed to ensure proper disbursement of funds from lenders or financial institutions. Alongside this document, several other forms are commonly used during the construction process to ensure legal compliance, financial transparency, and effective project management.

1. Contractor Agreement: This document outlines the terms and conditions between the property owner and the contractor, detailing the scope of work, project timeline, payment schedule, and other key aspects of the project agreement.
2. Change Order Form: Used to document any changes to the original construction plan, including adjustments in the scope of work, materials used, or project timeline. It ensures that both parties agree to the changes and their impact on costs and schedule.
3. Mechanic's Lien Waiver: This form is a release, given to the property owner by contractors and suppliers, indicating that they have received payment for their services or materials and waive any future lien rights to the property for those services or costs.
4. Construction Permit Applications: These are applications submitted to and approved by local government authorities, allowing for the legal commencement of construction activities. They cover various aspects, including building, electrical, plumbing, and zoning permits.
5. Construction Schedule: A document or tool providing a detailed plan of when specific phases of the project are to take place. It helps in tracking the progress and ensuring the project remains on time.
6. Payment Bond: A type of surety bond issued by a contractor to guarantee payment to all laborers, materials suppliers, and subcontractors involved in a construction project.
7. Performance Bond: This bond is a guarantee for the satisfactory completion of a project. It ensures that a contractor fulfills all their obligations as per the contract. If the project is not completed as per agreed terms, the bond amount can be used to complete the project.

Each of these documents plays a unique role in supporting the construction process, complementing the Sworn Construction Statement by providing additional layers of financial security, legal compliance, and project management controls. Utilizing these forms effectively can help ensure a construction project’s success, keeping it on budget, on schedule, and compliant with relevant laws and regulations.

The "Change Order Form" in construction projects bears a resemblance to a Sworn Construction Statement in that both are essential for documenting adjustments to the initial agreement. A Change Order Form is used to record amendments to the scope of work, such as additions or deletions, and its impact on costs and schedule, much like the Sworn Construction Statement outlines updates or changes to the list of subcontractors and supplies, affecting the overall project cost and completion timeline.

A "Mechanic’s Lien" is another document closely related to the Sworn Construction Statement. While a Mechanic’s Lien secures payment for contractors and subcontractors for their labor and materials, the Sworn Construction Statement itemizes these costs upfront and includes a declaration to manage any outstanding payments. Both aim to protect the financial interests of those involved in construction projects by ensuring transparency around costs and payment statuses.

The "Construction Loan Agreement" shares similarities with the Sworn Construction Statement through its focus on financial arrangements for a construction project. It details the terms and funds disbursement schedule between a lender and borrower, akin to how the Sworn Construction Statement provides a breakdown of costs and payments to subcontractors and suppliers, serving as a basis for funding disbursements by the lender or title company.

"Performance Bonds" are akin to the Sworn Construction Statement, as both provide assurances concerning the completion of a construction project. Where a Performance Bond safeguards the project owner against losses from an inability to complete the project as per terms, the Sworn Construction Statement assures the title company and lender about the payment to subcontractors and suppliers, indirectly ensuring the project's progress toward completion.

A "Subcontractor Agreement" mirrors the purpose of the Sworn Construction Statement by delineating the scope of work, materials, and costs, but at a more granular level between a contractor and a subcontractor. Both documents facilitate clarity and agreement on the details of work and payment, contributing to smoother project execution. The statement encapsulates this data as part of the broader financial and operational plan, while a Subcontractor Agreement focuses on individual agreements.

The "Material Supply Agreement" closely parallels the Sworn Construction Statement, particularly in documenting supply specifics and financials. It contracts the provision, delivery, and cost of materials, directly tying into the statement's line items regarding materials and associated costs. Both serve to record and manage the expectations and obligations of parties regarding construction materials.

A "Construction Schedule" document is indirectly comparable to the Sworn Construction Statement. While the schedule primarily outlines the timeline for project completion, including milestones and deadlines, the Sworn Construction Statement influences this timeline through its financial and supplier/subcontractor groundwork. Disruptions in the flow of funds or changes in subcontractor engagement, as indicated in the statement, can lead to adjustments in the project’s schedule.

"Title Insurance" documents also share a connection with Sworn Construction Statements by dealing with risk mitigation in construction projects. Title Insurance protects against defects in title to the property, whereas the Sworn Construction Statement ensures that there are no outstanding payments for labor or materials that could lead to a lien, affecting the title. Both contribute to securing the interests of the property owner and lender from different angles.

When filling out the Sworn Construction Statement form, paying attention to each section is crucial to ensure accurate and transparent communication between all parties involved. Here is a comprehensive guide with things you should and shouldn't do:

• Do ensure you have the accurate names and addresses of the property owner and the project location.
• Do attach a comprehensive list of all subcontractors and suppliers involved in the project, as this promotes transparency and accountability.
• Do make any necessary changes to the list or statement in a timely manner and communicate these changes to the Lender or Title Company, showing good faith and proper project management.
• Do accurately list all costs related to items from land purchase to final utilities hookup, aiming for a detailed accounting of the project expenditures.
• Do sign the statement in the presence of a Notary Public to validate the document, ensuring all parties acknowledge the statement’s authenticity and binding nature.
• Don't leave any section incomplete, as each part is crucial for a full financial disclosure, potentially affecting the funding and legal standing of the project.
• Don't underestimate costs or leave out potential subcontractors and suppliers, which could lead to legal and financial complications down the line.
• Don't ignore the requirement to update the lender and Title Company with additional deposits if the cost of construction increases, as it reflects on your financial responsibility.
• Don't forget to authorize the Lender and Title Company to disburse funds as work progresses, which is essential for the ongoing financial management of the project.

This approach ensures that all parties are well-informed and in agreement, paving the way for a smoother construction process.

When dealing with the complexities of construction projects, the Sworn Construction Statement form plays a crucial role in ensuring the transparency and accountability of financial transactions. However, several misconceptions surround its purpose and use. These misunderstandings can lead to unnecessary complications and disputes. Here, we aim to clarify some of the most common misconceptions.

• It's only necessary for large construction projects. Many believe this form is reserved for large-scale constructions, but it is equally important for small projects. It helps in detailing the financial aspects, regardless of the size of the project.

• It's solely for the benefit of the lender or title company. While it does provide these parties with vital information, the Sworn Construction Statement also protects the interests of the owner and contractor by clearly outlining the costs and ensuring that payments are tracked and recorded.

• It lists only the primary contractor and major suppliers. This is a common misconception. In fact, the statement should include all subcontractors and suppliers, not just the main entities, to provide a comprehensive overview of everyone involved in the construction process.

• Changes to the project won't affect the statement. Any modification in the project—be it an addition or a deduction—should be reflected in the statement. This ensures that the financial records remain accurate and up to date.

• It guarantees the completion of work. Although the statement outlines the financial aspects of the construction, it does not assure project completion. It's a financial tool, not a performance guarantee.

• Signing it means you're immune to legal challenges. While it does offer some legal protections, especially in terms of financial disputes, the form itself does not make one immune to all legal challenges that can arise during or after construction.

• It's the final document in the construction process. Contrarily, the Sworn Construction Statement is a part of ongoing documentation throughout the construction project. It may require updates and modifications as the project progresses.

• No technical information is disclosed on the form. Although it is primarily a financial document, the statement also provides a breakdown of work done which includes technical details necessary for understanding the scope and cost of the project.

• Facsimile signatures are not valid. On the contrary, the statement specifically mentions that a facsimile (fax) signature is considered as valid as an original. This facilitates easier and faster processing and approval.

Understanding and correcting these misconceptions about the Sworn Construction Statement form can lead to smoother and more transparent financial dealings in construction projects, benefiting all parties involved.

Filling out and using the Sworn Construction Statement form is an essential process in construction projects, particularly for securing loans and ensuring that all parties are legally protected. Here are four key takeaways:

1. The Sworn Construction Statement is a comprehensive document that lists all subcontractors and suppliers associated with a construction project, alongside details such as total cost, amount paid, and balance due for each. This inclusion helps in maintaining transparency and accountability, ensuring that every party involved is aware of the financial dealings.
2. It is crucial for the owner and contractor to accurately identify all costs associated with the project. The statement confirms that all material costs shown are correct and inclusive of all labor and material required to complete the building according to plans and specifications. This accuracy prevents future disputes and ensures the integrity of the project’s financial management.
3. Changes to the project that affect the cost must be formally communicated to the Lender or Title Company. Such changes could necessitate additional owner deposits to cover increased costs. This procedure ensures that all financial adjustments are tracked and approved, preventing unauthorized expenses that could jeopardize the project’s funding.
4. The document plays a critical role in the disbursement of loan proceeds. It serves as an agreement that upon payment of the specific unpaid items listed, the contractor agrees to waive all claims of priority to the mortgage securing the loan. Furthermore, the statement authorizes the Lender and Title Company to disburse the loan proceeds to contractors and subcontractors based on the construction statement and lien waivers presented, streamlining the financial administration of the project.

Understanding these key components of the Sworn Construction Statement form is vital for anyone involved in a construction project, especially when it involves financial transactions backed by a loan. It not only outlines the financial aspects of the project but also serves as a legal document that protects the interests of all parties involved.