If you are on a project where the property owner or GC is requiring a sworn statement with your payment application, it’s important to know how to complete one accurately. Providing inaccurate information can not only delay your payment, you can also be punished legally for it. We’re going to look at what a contractor’s sworn statement is, why they are used, and what information you need to complete them accurately.
What is a contractor’s sworn statement?
A sworn statement is a construction document that lists the contractors and suppliers that provide material or labor to a construction project. It includes information about who is owed money, how much they are owed, and the remaining balance on their contract. A sworn statement can be required by a project owner, financial institution, or a general contractor, and is generally requested with each payment application.
This is opposed to a contractor affidavit, which is generally submitted to reflect how much is owed to contractors and suppliers at the end of the project.
The purpose of a sworn statement is to track the payments being made to contractors and suppliers and to protect the owner from unexpected liens or claims. Additional documents, such as lien waivers, are often required to help back up the information shown on the statement.
The statement helps general contractors and owners identify companies that are providing work for the project and keeps the supply chain visible. Property owners don’t want to be surprised by a contractor or supplier filing a mechanics lien, when the owner never knew they existed. A sworn statement helps them to know who is working on the project and how much they are owed.
A sworn statement is signed and notarized after the signer takes an oath that the information provided is true to the best of his or her knowledge. In the end, it is a legal document, and there are consequences for falsifying information.
Free Contractor’s Sworn Statement Template
Download a free Contractor’s Sworn Statement template for use in any state.
If you are looking for an Illinois General Contractor’s Sworn Statement, you can download it here.
What information is needed to complete a sworn statement?
The top section of a contractor’s sworn statement contains information about the parties in contract with each other, the project, contract dates and amounts, and who is going to be swearing the oath and signing the document. All of this information should be available from the project contract documents.
At the bottom of the document, the signer swears the oath and signs stating that the information is true to the best of his or her knowledge
The signer should be someone with authority for the company, such as an officer or project manager in a larger firm. A notary is usually required to witness the signature and provide their seal and signature of authentication.
List of contractors & suppliers
The meat of the document contains a table that lists the contractors and suppliers on the job. It includes information about the:
- scope of work they are providing
- contract price for the project
- total amount due to date
- amount previously paid to them
- amount owing at this time
- balance on their contract
This information can be pulled from accounts payable billing reports and subcontract summary reports from your accounting software.
If you don’t use software, set up a spreadsheet to help you track your subcontract amounts, amounts billed and paid to date, change orders, and balance owing to each vendor.
The amounts in the table are updated with each draw. The GC on the project will include a line for their portion of the contract, so that the total of all the subs and suppliers and the GC’s amount add up to the total contract for the project.
Similarly, the amounts shown in each of the columns need to add up to the total amount drawn to date, the current draw amount, and the balance left on the contract.
Requiring all the amounts to match the contract and draw amounts ensures that a supplier or subcontractor has not been missed. Using a spreadsheet with formulas to tabulate the totals of each column will help make filling out the document easier and faster.
What back-up documents are necessary?
Many projects that require sworn statements will request lien waivers as back-up to prove that the amounts shown on the statement have been paid or will be paid. Both unconditional and/or conditional waivers may be required.
Some projects may also require copies of subcontractor and supplier invoices or payment applications to prove that the amounts asked for on the statement match the invoices submitted.
Make sure that all your documents match up with the amounts and vendors shown on the sworn statement, or you will be asked to explain your discrepancies, which will delay payment.
FAQs about contractor sworn statements
Is it okay to “fudge” the numbers on the sworn statement?
No. Many projects will require back-up documentation, such as lien waivers or invoices, to prove the amounts are accurate. If you get caught providing false information on a sworn statement, it is a punishable offense.
Since an oath is given before signing the document, you must provide accurate information. If you find out later that an amount changed, or a credit memo came in, that is not the same as falsifying information. In that case you can provide back-up documents to show that a change was made after the statement was signed.
As long as you put down the correct information at the time the statement is signed, you are fulfilling the intent of the document.
What if a sub hasn’t billed me yet and the project is complete?
Contact the sub and ask them to send in an invoice and/or a conditional lien waiver as soon as possible. You must show that all contractors and suppliers on your list billed for their work and were paid.
If a sub gets terminated from a project due to poor performance or other conditions, then you will need to make changes to the next sworn statement to reflect that.
Like with any changes on a construction project, it is best to communicate what is going on with the tier of contractors above you. That way no one is surprised.
Do I have to list EVERY supplier on a project?
Within reason. If you go to a big box store to pick up extra parts and tools, you don’t have to list them on your sworn statement. However, you do need to list any supplier that might have lien rights on the project.
If the supplier makes you open up a job account or they send in a preliminary notice, then you need to list them on your statement. The goal of the statement is not to track down the supplier of every bolt, it is to make sure everyone knows who needs to be paid and how much they’ve been paid.
Some projects may set a threshold for when suppliers and contractors need to be listed, such as $5,000. In this case, it is okay to leave smaller suppliers and subs off the list.
Completing a sworn statement isn’t difficult, but it can be confusing if you don’t know what information to provide or why you are providing it. The statement’s purpose is to protect the project owner and financial lender from an unknown contractor or supplier claiming that they haven’t been paid.
By listing out all contractors and suppliers on the sworn statement, the owner can be assured that everyone is being paid as the work progresses.