Sworn Construction Statement

Hard Money Sworn Construction Statement

One of the documents required by a Hard Money is a sworn construction statement from a building contractor. A sworn statement is an itemized list of all individuals and companies who have provided improvements, materials, or labor toward the construction project. This includes bids from subcontractors and suppliers for all labor and specific materials that go into the construction of the property. Sworn statements are like affidavits in the respect that they are a records of facts related to an event. They are used for witnesses in cases, and homeowners use them for contracting. Unlike affidavits, sworn statements are not required to be witnessed and signed by a public notary.

A sworn construction statement requires planning with your contractor and architect. The person making the declaration signs a paragraph at the end of the document stating that the declaration is made under penalty of perjury.

The law requires that a sworn state must be prepared whenever payment is requested or when the owner or lessee has made the demand for the sworn statement. The homeowner who pays the contractor expects the contractor to pay applicable sub-contractors. The statement tells the homeowner who is owed money, in what amounts, and for which supplies and what work done. The statement provides a record for the items the general contractor is billing for. The general contractor is obligated to pass the money paid to him or her by the property owner down to sub-contractors, suppliers and laborers involved in the project. Failure to pass the money down is against the law. That is why a sworn construction statement is so important.

When the Hard Money sworn statement is received, the homeowner, lessee, or designee is required to give notice of its receipt. This notice can be given in writing, by telephone, or personally. If a sub-contractor or a supplier asks for a copy of the statement, the owner must provide a copy within 10 business days after receiving the request. Sub-contractors must also provide a sworn statement to the general contractor upon request for payment. A contractor or sub-contractor, who gives false information on a sworn statement, is guilty of a crime if their intent was to defraud. The penalty for such perjury can be anywhere from 93 days to 10 years incarceration and fines from $500 to $10,000. If you do not obtain a sworn statement when you choose to pay a contractor, you are taking a risk.

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