Free Sworn Construction Statement PDF Form

How to Fill Out Sworn Construction Statement

Filling out a Sworn Construction Statement form is a critical step in ensuring that all financial aspects of a construction project are transparent and agreed upon by the contractor, the owner, and the lender or title company involved. This document is a declaration of the costs associated with the construction, including payments to subcontractors and suppliers, and serves to protect the interests of all parties by providing a clear financial breakdown of the project. Follow the steps below carefully to complete this form accurately.

1. Begin by entering the Owner’s Name at the designated space on the form, ensuring it matches legal documents.
2. Write the Property Address below the owner's name, including the city, state, and ZIP code to avoid any discrepancies.
3. Ensure you have a comprehensive list of all subcontractors and suppliers attached to this statement. If there are any changes to this list or the statement during the project, update and notify the Lender or Title Company promptly.
4. For each item listed (Items 1 through 50), starting from "Land" up to the last applicable item, accurately detail the following:
   • Total Cost: The agreed-upon price for each section of the work or supply.
   • Amount Paid: What has already been paid towards the Total Cost.
   • Balance Due: Any outstanding amounts that are yet to be paid.
5. Fill in the total costs at the bottom of the form where it says “TOTALS”, making sure it accurately reflects the sum of all costs, amounts paid, and balances due.
6. In the section provided, the contractor and the owner must state their agreement that the attached list is complete, and all financial declarations are accurate to the best of their knowledge. This includes the commitment that there are no other outstanding contracts.
7. Indicate any additional deposits provided by the owner to cover any increase in construction cost, if applicable. This is important for updating the Lender and Title Company about any changes that affect the project’s financial scope.
8. Fill in the loan amount in the space provided to prompt the Title Company to utilize these funds, following the statement’s guidelines, for payment of the outlined unpaid items.
9. The contractor and owner must sign and date the form where indicated, affirming their acknowledgment and agreement to the statement’s terms. A notary public will also need to sign, validating the authenticity of the signatures.
10. If applicable, include a facsimile signature which is considered valid as an original for this document.

This document not only ensures a form of financial security for all parties involved but also facilitates a smoother construction process by setting clear expectations around costs and payments. Carefully reviewing each section and providing accurate, up-to-date information will help prevent misunderstandings and conflicts, paving the way for a successful project completion.

What is a Sworn Construction Statement?

A Sworn Construction Statement is a document that provides a comprehensive breakdown of the costs associated with a construction project, including details of subcontractors and suppliers involved. The owner and contractor confirm that the attached list includes all parties working on the property and that all material costs provided are accurate. This statement ensures that there are no outstanding contracts beyond what is stated and is used to demonstrate financial transparency to lenders or title companies, particularly for the purpose of securing loans or releasing funds.

Why do I need to provide changes to the Lender or Title Company?

Any alterations to the original Sworn Construction Statement or its attached list of subcontractors and suppliers must be reported to the lender or title company to ensure the accuracy of the financial information on which they base their loan disbursement and payment decisions. This ensures that all parties are aware of the current financial obligations and the overall cost of the construction, allowing for effective management of the loan funds and helping to prevent any disputes related to unexpected costs or unpaid balances.

How is the total cost broken down in the Sworn Construction Statement?

The total cost in the Sworn Construction Statement is itemized into several categories, including but not limited to land acquisition, permits, materials like lumber and concrete, labor costs such as excavation, grading, and carpentry, and other specifics like roofing, plumbing, and electrical work. This breakdown shows the subcontractor/supplier, the total cost, the amount already paid, and the balance due. This itemization allows for transparent cost management and provides a detailed overview of the project’s financial aspects.

What is the significance of the statement regarding increases in construction cost?

The statement concerning increases in construction costs underlines that if the cost of construction rises beyond the initially stated amounts, the owner or contractor must inform the lender and title company. They may also be required to provide additional funds to cover these increases. This clause ensures that all financial adjustments are transparent and accounted for, preventing unexpected liabilities for the lending institution and protecting the title company from unforeseen claims or priority issues that could arise due to increased costs.

What role does the Title Company play as an Escrow Agent in this process?

As the Escrow Agent, the Title Company is appointed to oversee the financial transactions related to the construction process. The lender advances funds to the Escrow Agent based on the progress of the construction, as verified through periodic inspections. This role involves disbursing payments to contractors and subcontractors, managing the construction funds to ensure that expenses are covered, and maintaining the integrity of the financial dealings between all parties. This arrangement helps to ensure that construction costs are managed efficiently and that payments are made in a timely and orderly fashion.

When filling out a Sworn Construction Statement, individuals often make mistakes that can lead to significant issues down the line. It's crucial to approach this document with attention to detail and thoroughness to ensure all information is accurate and complete. Below are nine common mistakes people make:

1. Failure to list all subcontractors and suppliers involved in the project. As the form requires a comprehensive list of all parties involved, overlooking even a single entity can lead to disputes and legal challenges.
2. Inaccurate reporting of the total cost, amount paid, and balance due. Each column must be filled out with precise figures to provide a clear financial overview of the project, ensuring no discrepancies that might affect future payments or financial arrangements.
3. Not updating the form when changes occur. Any adjustments to the project scope, subcontractors, or suppliers must be reported to the Lender or Title Company to maintain transparency and protect all parties' interests.
4. Omitting to check that all material costs shown are correct and include all labor and material required, conforming to plans and specifications. This mistake can lead to budget overruns and financing issues.
5. Assuming that the provision for additional owner deposits is not necessary without confirmation. If construction costs increase, additional funds must be secured and deposited to cover these expenses.
6. Forgetting to obtain or provide lien waivers from subcontractors and suppliers, confirming that they have been paid and waive any claim of priority to the mortgage, is a common oversight that can result in legal complications.
7. Not verifying that all parties have signed the statement, including contractor, owner, and notary public, which is essential for the document's legal validity.
8. Ignoring the requirement to appoint the Title Company as Escrow Agent and not acknowledging their role and the processes involved. This understanding is crucial for the proper administration of construction funds.
9. Using a facsimile signature without ensuring its acceptance as an original. It’s important to confirm that all parties recognize and accept facsimile signatures to prevent future validation issues.

In the world of construction, the completion and management of a project requires more than just a Sworn Construction Statement. This document, essential for detailing the materials, labor, and costs involved in a construction project, often works in conjunction with several other forms and documents. These additional documents ensure the smooth execution of responsibilities, the proper handling of materials, and the legal and financial aspects of a construction project. Below is a list of 10 other forms and documents frequently used alongside the Sworn Construction Statement.

• Contract Agreement: This comprehensive document outlines the agreement between the owner and the contractor, detailing the scope of work, project timeline, payment schedule, and terms and conditions of the project.
• Change Order Forms: Used to document any changes to the original contract, including adjustments to the cost, timeline, or scope of work, ensuring that all parties agree to the modifications.
• Performance Bond: Offers financial protection to the owner should the contractor fail to complete the project as per the contractual agreement, guaranteeing the completion of the project.
• Payment Bond: Ensures that subcontractors and suppliers will be paid for their services and materials, protecting the owner from possible liens against the property.
• Waiver of Lien: Subcontractors and suppliers provide this document upon payment, relinquishing their right to place a lien on the property, offering peace of mind to the owners and contractors.
• Construction Schedule: Details the timeline of the project, including start and end dates for different phases of construction, critical for project management and coordination.
• Building Permits: Required documents that grant legal permission to start construction, ensuring that the project meets local building codes and regulations.
• Insurance Certificates: Proof of insurance coverage, including liability and worker's compensation, protecting the owner and the contractor against potential claims or damages.
• Inspection Reports: Document the inspections carried out by authorized officials or third-party inspectors throughout the construction process, ensuring compliance with plans and building codes.
• Subcontractor Agreements: Detail the terms between the main contractor and subcontractors, outlining the scope of work, deadlines, and payment agreements for specific parts of the project.

Together, these documents form a comprehensive framework for managing construction projects, ensuring clarity, compliance, and protection for all parties involved. From initiating the project with a clear Contract Agreement to finalizing details with a Waiver of Lien, these forms and documents are vital for the successful completion of any construction project, working hand-in-hand with the Sworn Construction Statement.

• A Construction Contract: This document is similar because it outlines the agreement between the property owner and the contractor regarding the construction work to be done, which is a critical aspect of the Sworn Construction Statement that lists all subcontractors and suppliers along with the financial details of their work.

• Mechanic's Lien Waiver: This form, which contractors often submit after receiving payment, waives their right to file a lien on the property. It connects closely with the Sworn Construction Statement's purpose of assuring there are no outstanding claims for materials, labor, or other work beyond what is listed.

• Payment Bond: This guarantees that the subcontractors and suppliers will be paid for services and materials. The Sworn Construction Statement's role in detailing payments due aligns with the bond's function to ensure financial obligations are met.

• Performance Bond: Ensuring that a project is completed according to the contract terms without liens or disputes, this bond parallels the Sworn Construction Statement’s aim to keep track of all project-related financial dealings and ensure no additional costs are outstanding.

• Change Order Form: Similar to the Sworn Construction Statement’s provision for updates to the list of work and suppliers, a Change Order Form is used to approve alterations in the work scope, schedule, or cost on a construction project.

• Release of Lien: This legal document, which contractors sign after being paid, signifies that they have no legal right to impose a lien against the property, mirroring the Sworn Construction Statement's assurance against outstanding claims for the listed construction costs.

• Project Progress Report: This tracks ongoing work, subcontractor performance, and budget status, similar to how the Sworn Construction Statement maintains a record of costs, payments, and balances for various construction activities.

• Construction Schedule: Although primarily focused on timelines rather than financial information, it's similar because it necessitates updates and adjustments akin to changes in the Sworn Construction Statement’s list of subcontractors and suppliers.

• Supplier Agreement: This contract between the construction project and its material suppliers outlines terms of material delivery and payment, concepts also covered by the Sworn Construction Statement in its detailing of suppliers and associated costs.

• Subcontractor Agreement: Specifying terms between the general contractor and subcontractors, this document shares similarities with the Sworn Construction Statement through its emphasis on agreed-upon work, costs, and payment details within a construction project.

When filling out the Sworn Construction Statement form, you should carefully follow these guidelines to ensure accuracy and completeness, which is crucial for the construction process and legal compliance:

• Review all items listed carefully: Ensure you accurately account for every item related to the construction process, from land and survey costs to appliances and landscaping.
• Include all subcontractors and suppliers: Attach a comprehensive list of all entities involved, making sure no one is left out.
• Update changes immediately: Any alterations to the list or statement require prompt communication with the Lender or Title Company.
• Verify totals: Before submitting, double-check the TOTAL COST, AMOUNT PAID, and BALANCE DUE for each item to prevent any discrepancies.
• Ensure the accuracy of personal and property information: Double-check the owner's name, property address, and dates to avoid errors.

• Leave blanks on the form: Incomplete information can lead to misunderstandings or delays. Fill out every applicable section.
• Forget to attach the subcontractor/supplier list: This list is essential for a complete statement and must accompany the form.
• Ignore changes in costs or subcontractors: Failing to update the Lender or Title Company on changes can result in financial and legal complications.
• Use estimates instead of actual costs: Ensure that all financial information reflects actual costs rather than approximations to maintain accuracy.
• Sign without verifying: Both the contractor and owner must ensure the information is correct before signing, to avoid future claims or disputes.

Following these dos and don'ts can streamline the construction process, promote transparency, and facilitate smoother relations between all parties involved.

When it comes to understanding the Sworn Construction Statement form, there are several misconceptions that can arise. Clarifying these misunderstandings is essential for a smoother construction and financing process. Here are ten common misconceptions, explained:

• It's only about listing subcontractors and suppliers: While listing all subcontractors and suppliers is crucial, the Sworn Construction Statement is more comprehensive. It includes a detailed breakdown of costs, payments, and balances for various construction items, ensuring clarity for the lender or title company.
• Changes to the list aren't allowed: This is incorrect. Changes can be made to the subcontractor and supplier list, or the Statement itself. However, these changes must be communicated to the lender or title company promptly to maintain accuracy and trust.
• It's not legally binding: This document is a legally binding declaration by the contractor and the property owner, confirming the accuracy of all costs and that there are no outstanding contracts beyond what is declared. Misunderstanding this can lead to serious legal implications.
• Owner and contractor responsibilities are unclear: The form clearly outlines the responsibilities of both the owner and the contractor, including providing additional deposits if construction costs increase and ensuring all bills are paid to avoid liens.
• No need for lien waivers: The statement also involves a commitment from the contractor to waive all claims of priority to the mortgage once specific unpaid items are settled. This is crucial for protecting the title company and lender's interests.
• It doesn't affect loan disbursement: The truth is, this Statement is instrumental in the disbursement of loan proceeds. It ensures that funds are released systematically, based on work progress and lien waivers presented, keeping the financial aspects of the project transparent and orderly.
• Facsimile signatures are not accepted: Contrary to this belief, a facsimile (fax) signature is considered as valid as an original on this document, making it easier for parties to execute agreements even when not physically present.
• It's only for big construction projects: This statement applies to construction projects of various scales. Regardless of the project size, providing a detailed account of expenses and liabilities ensures transparency and accountability.
• It's the final step in securing financing: While important, submitting this statement is part of an ongoing process that includes periodic inspections and additional documentation as construction progresses. It's not a one-and-done deal but a part of a series of steps to secure and maintain financing safely.
• The cost breakdown is optional: The detailed cost breakdown for each item listed, including totals for subcontractor/supplier cost, amount paid, and balance due, is mandatory. This detailed accounting is essential for the lender and title company to monitor and manage fund disbursement properly.

Understanding the Sworn Construction Statement accurately is vital for everyone involved in the construction process. It protects the interests of the property owner, the contractor, the lender, and the title company, ensuring that the project proceeds smoothly and efficiently.

Filling out the Sworn Construction Statement form correctly is crucial for the smooth progression of your construction project. Here are key takeaways to help guide you through the process:

• Complete Disclosure Required: The form mandates the listing of all subcontractors and suppliers involved in the project. It's essential to ensure that every party and their financial details are accurately represented to prevent future disputes.
• Updates are Essential: Any changes in the subcontractors, suppliers, or overall statement must be communicated promptly to the Lender or Title Company. This requirement helps in maintaining transparency and ensuring that all party interests are aligned throughout the construction process.
• Accurate Financial Reporting: The statement involves listing the total cost, amount paid, and balance due for each segment of the construction project. Accurate financial reporting is critical for tracking budgetary compliance and for the timely release of funds from loans secured by mortgage on the property.
• Legal and Financial Obligations: By signing the statement, the owner and contractor agree to various obligations, including paying off any unpaid bills and removing mechanic’s liens. This agreement serves to protect the title company and lender against potential legal challenges and financial losses, encapsulating the project's integrity and financial viability.

This document not only facilitates the financial management of a construction project but also serves as a legal confirmation of the agreement between the property owner, contractor, and the financial institutions involved. It's imperative to approach this document with diligence and accuracy to ensure the construction process proceeds smoothly and all involved parties are protected.