Sworn Construction Statement Template

Guidelines on Filling in 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 all parties involved. This document is particularly essential for securing loans and managing payments throughout the construction process. It provides a clear record of the costs associated with the construction, including labor and materials, and outlines the responsibilities of the property owner and contractor in covering these expenses. To accurately complete this form, follow the steps outlined below, ensuring that each section is filled out with the most current and accurate information available.

1. Begin by entering the Owner’s Name at the top of the form, ensuring it matches legal documents.
2. Fill in the Property Address in the designated space, including any suite or unit numbers if applicable.
3. Attach a comprehensive list of all subcontractors and suppliers involved in the project to the statement. This list should be detailed and include contact information for each party.
4. Under the ITEMS section, start filling out each line with the appropriate information:
   • For items such as Land, Survey, Permits, etc., input the Total Cost, Amount Paid, and Balance Due for each.
   • Ensure the costs associated with each item are accurate and reflect current agreements and receipts.
5. In the presence of a notary, the contractor should sign and date the form, asserting that the information provided is accurate and inclusive of all construction costs.
6. Both the Owner and Contractor should provide their signatures as well, indicating their agreement with the stated costs and conditions.
7. The Notary Public must then sign, date, and seal the form, verifying the identities of the signatories.
8. If a loan is involved, indicate the amount in the provided space and detail how these funds, alongside any additional deposits from the owner, will contribute to covering the construction costs.
9. Review the statement for accuracy and completeness. Verify that it contains:
   • A comprehensive list of all labor and material costs.
   • A clear declaration that no other contracts are outstanding for the project.
10. Finally, acknowledge that any increase in construction costs will require notification and approval by both the Lender and Title Company, potentially requiring additional deposits from the owner to cover these increases.

Once properly filled out, this Sworn Construction Statement ensures a mutual understanding between the property owner, the contractor, and any financial institutions involved regarding the costs and payments for a construction project. It plays a pivotal role in the financial management and smooth progression of construction efforts, helping to prevent disputes and misunderstandings related to project finances.

When completing the Sworn Construction Statement form, attention to detail and accuracy is crucial. Common mistakes can create delays or legal issues. Understanding these errors can help in avoiding them:

1. Not updating changes promptly: Failing to report modifications to subcontractors or suppliers' list to the Lender or Title Company can lead to discrepancies and challenges during the construction process.
2. Incorrect property address: Providing an inaccurate address can cause significant confusion and may lead to documents or essential communications being misdirected.
3. Omitting subcontractors or suppliers: Every entity involved must be listed. Overlooking a subcontractor or supplier may result in financial discrepancies or disputes related to payment and liens.
4. Inaccurate financials: Errors in listing the total cost, amount paid, or balance due can cause budgeting and payment problems, affecting the overall financial management of the project.
5. Failure to update the total cost due to changes: Not adjusting the construction costs after agreeing upon changes can lead to insufficient funds allocated for the project completion.
6. Ignoring the need for additional deposits: Overlooking the requirement to provide extra funds to cover construction cost increases can halt the project's progress.
7. Not adhering to the agreement to remove liens: Neglecting to pay unpaid bills or to resolve disputes that could lead to mechanic’s liens against the property could jeopardize the construction and ownership.

To ensure the construction process proceeds smoothly and according to plan, individuals should consider these common mistakes carefully. It's not just about filling out the form, but also about staying proactive, communicative, and thorough throughout the construction project. Accurate and timely paperwork guards against financial and legal complications, ensuring the successful completion of your construction endeavor.

When preparing for a construction project, especially one that involves financial transactions with a lender or title company, several forms and documents are essential to ensure smooth operations and compliance. The Sworn Construction Statement is crucial for outlining the costs and suppliers involved. However, incorporating additional documents can provide a comprehensive framework that supports project transparency, financial management, and legal compliance. Below is a list of forms and documents that are often used in conjunction with a Sworn Construction Statement.

• Construction Contract: This agreement between the property owner and the contractor outlines the scope of work, project timelines, payment schedules, and the quality of materials to be used.
• Change Order Form: During construction, unforeseen changes may necessitate adjustments to the initial contract. This document records any changes to the scope of work, materials, or cost and requires approval from all parties involved.
• Notice of Commencement: Filed before the project starts, this legal document notifies the public of the property improvement, the project’s start date, and the project’s lender information, protecting the owner and contractor against unfiled liens.
• Lien Waivers: Subcontractors and suppliers provide this form upon payment, relinquishing their right to file a lien against the property for the amount specified in the waiver, ensuring clear title.
• Construction Schedule: This detailed timeline outlines the start and end dates of the construction phases, helping all parties stay on track and coordinate efficiently.
• Building Permit: Issued by the local government, this official approval allows the construction project to proceed, ensuring it meets zoning and building codes.
• Insurance Certificates: These documents provide proof of insurance coverage for risks associated with construction, including general liability, workers' compensation, and property damage.
• Loan Draw Schedule: Aligned with the construction schedule, this document outlines when the project’s financing will be disbursed based on the completion of specific milestones.
• Inspection Reports: Conducted by a third-party or governmental inspector, these reports ensure that the construction complies with plans, specifications, and building codes at various stages.

Utilizing these documents alongside the Sworn Construction Statement not only facilitates a smoother construction process but also helps in maintaining a clear, accountable, and legally compliant project path. By ensuring that each step and change is documented, stakeholders can reduce misunderstandings and disputes, ultimately leading to a successful project outcome.

• A Notice of Commencement document: This form is quite similar to the Sworn Construction Statement as it typically includes the project’s start date, legal property description, and information about the property owner, contractor, and lender. The primary purpose is to notify that a construction project is beginning, much like the Sworn Construction Statement outlines the beginning of construction work and the parties involved.

• A Construction Contract: This legal document between the property owner and the contractor outlines the work to be done, the materials to be used, the time frame for the project, and the cost. The Construction Contract, like the Sworn Construction Statement, lists detailed components and costs related to the construction project, providing a comprehensive breakdown similar to the items and costs detailed in the Statement.

• A Release of Lien: This is issued after a contractor or subcontractor has received full payment for their services and waives their right to place a lien on the property. The Sworn Construction Statement serves a similar purpose in indicating materials, labor costs, and confirming that there are no outstanding costs or to become due, which parallels the Release of Lien’s function to clarify no further financial obligations exist post-payment.

• A Builder's Risk Insurance Policy: While not a contract or a statement, this insurance policy is designed specifically for construction projects. It covers damage to the building materials and structure during construction, similar to how the Sworn Construction Statement lists all materials and labor involved, highlighting the scope of work and materials that would be insured under such a policy.

• An Architect’s Statement: This document verifies the work completed by an architect, including plans, designs, and supervisions. Similar to the Sworn Construction Statement, it documents aspects of the construction project, although focusing more on the design and oversight rather than the construction itself. Both documents serve as formal records of professional services and materials utilized in the building process.

• A Change Order: This is a document requested by either the property owner or the contractor to make a change or addition to the agreed-upon services in the original construction contract. It's similar to the Sworn Construction Statement because it incorporates changes into the original construction scope and cost, and it might affect the total cost and items listed in the Sworn Construction Statement should any modifications occur during the construction project.

• A Payment Application: Similar to how a Sworn Construction Statement includes a breakdown of costs, amounts paid, and balances due, a Payment Application is used by contractors to request payment from the project owner based on the work completed. Both documents are essential for financial tracking and ensuring that the financial aspects of the construction project are transparent and up to date.

When filling out the Sworn Construction Statement form, it's important to approach the task with precision and care. Here are some do's and don'ts to guide you through this process:

• Provide accurate information: Ensure all fields, including the owner’s name and property address, are filled out with current and accurate information. This includes a complete list of all subcontractors and suppliers involved in the project.
• Update as necessary: Any changes to the list of subcontractors, suppliers, or the statement itself should be communicated promptly to the Lender or Title Company.
• Include all relevant costs: Confirm that the total costs of materials, labor, and other expenses as listed are comprehensive and include all aspects of the work according to the plans and specifications.
• Ensure signatures are obtained: Make sure the form is signed by the contractor and the owner of the property. Remember, a facsimile signature is considered valid.
• Review the form for completeness: Before submission, double-check the form to make sure all items are accurately filled out and that no sections are missing or incomplete.
• Attach necessary documents: Ensure that all necessary attachments, such as the list of subcontractors and suppliers, are included with the statement form.

• Omit any costs: Do not leave out any subcontractor, supplier, or cost items. Inaccuracies could lead to disputes or legal issues.
• Guess or estimate figures: Avoid putting down approximate figures. All costs and financial information should be precise to ensure accuracy in reporting and payment.
• Sign without verifying: Never sign the form without ensuring all the information provided is correct and complete. Signing off on inaccuracies could be seen as fraudulent.
• Delay updates to the list: Failing to update the Lender or Title Company about changes promptly can lead to errors in disbursements and financial discrepancies.
• Forget to communicate with involved parties: Keep open lines of communication with the Title Company, Lender, subcontractors, and suppliers. This ensures everyone is on the same page regarding financial responsibilities.
• Ignore lien waivers: Do not neglect the significance of obtaining lien waivers from subcontractors and suppliers, as these are essential for protecting the property and owner from potential claims.

When dealing with the Sworn Construction Statement form, numerous misconceptions can lead to misunderstandings or misuse of the document. Clarifying these misconceptions is crucial in ensuring that all parties involved in a construction project understand their roles, responsibilities, and the importance of this document.

• Misconception 1: Only the contractor needs to be aware of the Sworn Construction Statement form. In reality, both the contractor and the property owner should fully understand and verify the information it contains, as it affects both parties' financial and legal responsibilities.

• Misconception 2: The form is a simple formality without legal importance. This notion couldn't be further from the truth. The Sworn Construction Statement is a legally binding document that confirms the costs associated with the construction, the payments made, and the balance due. It can have significant legal implications, especially regarding lien waivers and claims.

• Misconception 3: Once submitted, the Sworn Construction Statement cannot be modified. Changes can be made to the document, but they must be communicated promptly to the lender or title company. It's essential to keep all parties informed to avoid financial or legal complications.

• Misconception 4: The form covers only the costs of materials. The statement actually includes both labor and materials required to complete the construction project according to the agreed-upon plans and specifications. It's comprehensive, detailing all subcontractor and supplier costs.

• Misconception 5: Costs unrelated to construction, like landscaping or furnishings, are excluded from the form. These items are indeed included if they are part of the contract and construction plans, highlighting the form's scope in capturing the total cost of a construction project.

• Misconception 6: The Sworn Construction Statement has no role in the disbursement of loan proceeds. Contrary to this belief, the document is crucial for the lender and title company to release loan funds. It assures them that the funds will be used appropriately and that all parties have agreed to the costs and progress of the project.

• Misconception 7: The statement is only relevant during the construction phase. The importance of the Sworn Construction Statement extends beyond the completion of construction. It can affect the release of retained funds, the resolution of disputes, and the removal of mechanics' liens, should they arise.

Understanding the Sworn Construction Statement form and addressing these misconceptions is vital for a smoothly run construction project. Both property owners and contractors benefit from knowing the document's legal and financial implications, ensuring a transparent and fair process for all involved.

Filling out and using the Sworn Construction Statement form is a critical step in managing the financials of a construction project. Here are key takeaways to consider:

1. The Sworn Construction Statement requires detailed information regarding the owner, the property address, and a comprehensive list of all subcontractors and suppliers involved in the construction project.
2. It is obligatory to update both the lender or title company about any changes to the subcontractor/supplier list or the statement itself, highlighting the dynamic nature of construction projects.
3. This document lists numerous construction items and activities, ranging from land acquisition and permits to more detailed construction tasks such as excavation, roofing, and finishing work like painting and carpeting, underlining the complexity and the extensive scope of construction projects.
4. The statement mandates disclosure of the total costs, amount paid, and balance due for each item, ensuring transparency for all parties involved (owner, contractor, lender, and title company).
5. Accuracy in the statement is paramount, as it asserts that all material costs shown are correct and includes all labor and material necessary to complete the construction according to the stipulated plans and specifications.
6. It is clearly mentioned that for any increase in the construction cost, the owner or contractor is responsible for notifying the lender and title company and may be required to make additional deposits to cover the cost increase.
7. The purpose of the statement extends beyond mere record-keeping; it is utilized by the Title Company to safely disburse the loan proceeds, secured by a mortgage on the property, based on the progress of the construction.
8. The document binds the undersigned contractor and owner to a commitment to pay any unpaid bills for construction, remove any mechanic’s liens, and indemnify the company against any losses, demonstrating the legal and financial responsibilities involved.
9. Finally, it introduces the concept of appointing the Title Company as an Escrow Agent, with the lender authorized to advance funds to cover construction costs, indicating a structured and supervised financial management system during the construction process.

In conclusion, the Sworn Construction Statement form plays a pivotal role in ensuring financial diligence, transparency, and accountability among all parties involved in a construction project. It outlines the comprehensive and detailed nature of construction work, enforces a system of checks and balances for financial transactions, and safeguards the interests of the owner, contractor, lender, and title company.