Michigan Residential Builders License Practice Test

Which document is used to list unpaid subcontractors, suppliers, and laborers when payment is due?

1. Contractor's affidavit

2. Sworn statement

3. Payment ledger

4. Job completion report

The correct answer is: Sworn statement

The sworn statement is a key document in the construction industry that is specifically used to declare and list unpaid subcontractors, suppliers, and laborers when payment is due. This document provides transparency to the parties involved in a construction project by outlining any outstanding debts that need to be settled before a final payment can be made. It serves to protect both the contractor and the property owner by ensuring that all parties who have provided labor or materials are properly compensated for their services. In many jurisdictions, submitting a sworn statement can be a requirement before the release of final payments, as it helps to verify that all obligations have been met. It gives the owner or the general contractor the necessary information to address any claims for payment that have not yet been settled. While other documents like a contractor's affidavit, payment ledger, and job completion report may serve different purposes in tracking project finances or confirming completion, they do not specifically detail unpaid obligations related to subcontractors and suppliers in the same manner as a sworn statement does.