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Contractor's Affidavit to Induce Lender to Release Funds

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Contractor’s Affidavit to Induce Lender to Release Funds

STATE OF COUNTY OF

PERSONALLY appeared before me, the undersigned authority in and for said county and state, , who, having been first duly sworn by the undersigned Notary Public, deposes and says:

1. Affiant is executing and submitting this Contractor’s Affidavit personally and as of , a corporation organized and existing under the laws of the state of , with its principal office located at , a General Contractor operating in County. Affiant is executing this Contractor’s Affidavit in order to induce , hereinafter called the Lender, to release funds pursuant to a Request for Draw submitted by the General Contractor in the amount of $, under a Construction Contract, hereinafter called the Construction Contract between , a corporation organized and existing under the laws of the state of , with its principal office located at , hereinafter called the Owner, and General Contractor.

2. I hereby certify and warrant to Lender that:

A. I am fully authorized to execute and deliver this Affidavit on behalf of the General Contractor, which has contracted with Owner to act as the General Contractor for the construction of improvements and/or repairs to a project located upon property at , hereinafter called the Project.

B. General Contractor has been paid in full for all amounts owing to it for work performed and materials supplied on the Project under the Construction Contract through , and all of General Contractor’s sub-contractors, suppliers and laborers who have performed work and/or furnished supplies or labor for the Project through that date have been paid in full.

C. All invoices, bills and other amounts incurred in construction and/or repair with respect to the Project through the date inserted in Subparagraph B above have been paid in full and there are no construction liens or other similar liens against the Project and no claims for labor, services, or materials currently remain unpaid.

D. General Contractor hereby waives and releases and forever quit claims to the Owner, all of its rights to claim a construction lien or any other lien or encumbrance for materials furnished and work or labor performed on the Project up to and including the date inserted in Subparagraph B above.

E. If a construction lien or other lien is filed against the Project for any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or at the request of the General Contractor, the General Contractor agrees immediately to bond over or otherwise cause all such liens to be released in accordance with the law of the state in which the Project is located.

F. If any other demand is made or litigation commenced against Lender or Owner that relates in any way to the matters set forth in this Affidavit, the General Contractor hereby covenants to bear sole responsibility for all costs and expenses incurred by the Lender and/or the Owner in relating to such demand or in such litigation. Such cost and expenses specifically include, but are not limited to, all costs and expenses of legal counsel retained by Lender and/or Owner.

Name of General Contractor

By

Signature of Affiant

Notary Public

SWORN to and subscribed before me, this the day of , 20.

My Commission Expires:

The undersigned General Contractor does hereby authorize the release of $ from the proceeds of the Mortgage Loan and to disburse same to . To the best of our knowledge the above disbursement is in full satisfaction of all outstanding claims for labor and material furnished to date in connection with the improvements to the above Project.

Name of Contractor

Printed name & Office in Corporation

By

Signature of Officer

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What the Contractor's Affidavit to Induce Lender to Release Funds Is

Contractor's Affidavit to Induce Lender to Release Funds is a sworn statement in which a contractor affirms completion of work, the accuracy of billing, and the absence of undisclosed liens or claims to prompt a lender or escrow agent to disburse retained construction or loan proceeds. The affidavit typically identifies the parties, describes the contracted work and payment status, references lien waivers or conditional releases, and is signed under penalty of perjury and notarized. It functions as documentary assurance to lenders and title agents that funds may be released without risk of later mechanic's lien claims.

Why lenders and contractors rely on this affidavit

Provides lenders and escrow agents with sworn confirmation that contracted work is complete and that no qualifying liens or unpaid subcontractor claims remain, reducing release delay and exposure to post-disbursement lien claims while documenting chain-of-title and payment status for closing records.

Why lenders and contractors rely on this affidavit

Primary users and stakeholders

Common users include contractors, general contractors, lenders, title companies, and escrow agents involved in construction financing and property closings.

  • Contractors and subcontractors verifying payment and providing sworn releases to satisfy draw conditions.
  • Lenders or construction lenders requiring documentary proof before releasing retention or progress draw funds.
  • Title and escrow officers ensuring clear title and absence of encumbrances before closing disbursements.

Each party relies on the affidavit to allocate risk; confirm document format, notarization, and any lender-specific language before submission.

Core elements a professional affidavit should include

A professional Contractor's Affidavit to Induce Lender to Release Funds should be concise, legally sufficient, and include verified facts, notarization, and attachments that lenders require for fund disbursement.

Parties

List full legal names, entity types, and addresses for contractor, owner, lender, and payees so disbursement and legal notices accurately match closing records and payment routing.

Work Description

Provide the project address, contract scope, original and revised contract dates, work completed percentage, and citations to change orders that alter payment obligations or lien priority.

Payment Statement

State amounts billed, payments received, outstanding balances, and specify whether the affidavit serves as a conditional or unconditional lien waiver herein.

Lien Waiver

Attach corresponding lien waivers or releases, clearly stating scope and effective date; if conditional, specify written conditions and payment triggers before waiver becomes unconditional.

Notary Block

Include a notary acknowledgment block with jurat language, notary signature, commission expiration date, and any required witness signature lines per state law to validate sworn statements.

Supporting Documents

Attach invoices, lien-waiver receipts, payment proofs, certified payroll if required, and dated correspondence confirming completion or change orders cited in the affidavit, signed where applicable.

Step-by-step: completing the affidavit

Follow these steps to prepare a compliant affidavit that satisfies typical lender requirements and minimizes processing delays.

  • 01
    Prepare: Gather contracts, invoices, and lien waivers.
  • 02
    Complete details: Enter names, addresses, dates, and exact amounts.
  • 03
    Attach exhibits: Include invoices, payment proofs, and change orders.
  • 04
    Notarize and deliver: Sign before a notary and submit to lender or escrow.

Where to send or file the executed affidavit

Typical submission routes vary by lender and escrow; choose the channel accepted by the payor to ensure timely review and processing.

  • Lender Escrow Officer: Deliver original affidavit to escrow or lender for disbursement review.
  • Title Company: Provide copy to title for closing and lien search.
  • County Recorder: Record only if instrument affects real property interests.
  • Email or Portal: Upload signed PDF to lender portal or approved secure email.

Configuring an online affidavit template

Configure your online template fields, signer roles, and required attachments to match lender and escrow requirements before sending for signature.

Form Field Name | Configuration Setting Use appropriate field types and validation rules
Contractor signature field placement guidance Place jurat near signature with date field adjacent.
Notary jurat and commission fields Add jurat, notary name, seal, and expiration.
Supporting attachment requirements and validation rules Require PDF invoices and proof of payment uploads.
Signer authentication method and strength Use email code, SMS OTP, or stronger KBA as needed.

Platform and file requirements for digital completion

Use platforms that accept PDF or DOCX files, support secure upload, and meet lender authentication requirements for signers and notaries.

  • File formats: PDF and DOCX supported
  • Authenticator options: Email, SMS, or KBA
  • Integrations: Salesforce, NetSuite, Procore, Google

Ensure chosen platform provides tamper-evident signed PDFs, an auditable action log, secure storage, and complies with ESIGN and UETA standards for electronic signature validity in interstate and intrastate transactions and retention requirements.

Typical timelines and lender review expectations

Typical timeframes for affidavit preparation, lender review, notarization, and disbursement depend on lender policy and local recording practices.

Prepare, complete, and sign affidavit:

Complete prior to draw request submission.

Notarization and witness requirements timing:

Notarize at signing; witness if state requires.

Lender review and internal processing window:

Allow 3–15 business days for verification.

County recording or additional filings if required:

Recording timelines vary by county.

Funds disbursement timing after lender approval:

Occurs after verification and any hold periods.

Common preparation pitfalls to avoid

  • Incomplete party names or inconsistent entity formatting cause lender rejection and may require re-execution, delaying fund release and increasing administrative costs.
  • Missing or unsigned notary jurat is a common defect; many lenders and title companies will not accept an affidavit without proper notarization and witness information.
  • Stating conditional lien waivers without clear payment conditions can leave lenders exposed; specify exact payment dates, amounts and triggering events to avoid ambiguity.
  • Attaching unverified invoices or unendorsed waivers leads to disputes; include receipts, cleared checks, or bank confirmations to substantiate payment claims.

Required information checklist

Contractor Name: Full legal name as on ID
Project Address: Street, city, state, ZIP
Lender Identity: Lender name and contact info
Amount Claimed: Exact dollar amount, no abbreviations
Effective Date: Enter as MM/DD/YYYY format
Notary Details: Jurat, signature, commission expiry

Penalties and risks from incorrect affidavits

Release Denial: Lender may refuse disbursement
Lien Claims: Subcontractors may file liens
Tax Withholding: Backup withholding possible for wrong TIN
Perjury Exposure: False affidavit can incur penalties
Recording Issues: County recorder may reject
Payment Delays: Disbursement stalled pending verification

Comparing eSignature vendors for affidavit execution

Compare eSignature vendors by starting price, trial availability, bulk send, audit trail, HIPAA compliance, and envelope limits to match lender and compliance requirements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial, no credit card required Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Frequently asked questions about affidavits for fund release

Answers to common questions about preparing, signing, notarizing, and submitting a Contractor's Affidavit to Induce Lender to Release Funds.


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