Construction Loan Affidavit and Agreement

Construction loan affidavit and agreement

The loan for the construction on a piece of land requires the owner to produce an affidavit stating that he is the sole owner of the property in question and needs a loan to carry out construction work. The loan in such cases is dependent on the ability of the owner of the land to furnish the details of his ownership and the rightful ownership of the land or property.

There are three people who need to sign the construction loan affidavit and agreement. They are the owner of the land or the construction site, the contractor who is going to carry out the work of construction n the property as well as the notary public in whose presence the formerly mentioned people need to sign the document.

The man thing in this is the proof of the title of the property. It is the obligation of the person who is trying to obtain the construction loan from the lender to provide the proof of his rightful ownership. If he fails to provide such a proof it is the most likely that the lender may refuse to sanction the loan owing to the possibility of the owner and the money of the lender getting caught in some kind of litigation.

It is in the benefit of the lender tha the person asking for loan first produces the papers that show that he is the sole owner of the land or property and has the right to get any construction done there.

Construction Loan Affidavit And Agreement

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Construction loan affidavit and agreement.

State of _________
County of _________
_________, being first duly sworn, deposes and says:
1. That the person or corporation shown below owns that certain lot of land described as lot _________ in block _________, section _________, of _________ subdivision, as shown on map recorded in book of maps _________, page _________, in the _________ County registry and more particularly described in a deed of trust/mortgage from the owner to _________, trustee for _________(“lender”), recorded on _________[date], in the _________ County registry.
2. For the purpose of inducing lender to make disbursement of the proceeds of that loan, and inducing the _________ Title Insurance Company to issue its construction loan policy without exception to possible unfiled mechanics’ and materialmen’s liens and with knowledge that the lender and title insurance company will and are relying upon the statements and representations here made in paying out the proceeds of such loan and issuing of such title insurance, the undersigned says that no labor has been performed on the preparation of the premises described in paragraph 1 of this agreement and in the above-mentioned deed of trust/mortgage nor has any labor been performed towards the erection of any structure on the described premises and that no materials, supplies or equipment of any kind that might be used in a structure have been delivered to or placed on the land as of the time of the recordation of the above-mentioned deed of trust/mortgage.
3. That the undersigned agrees to indemnify and hold the lender and title insurance company harmless of and from any and all loss, cost, damage and expense of every kind, including attorney’s fees, which the lender or title insurance company shall or may suffer or incur or become liable for under its policy or policies directly or indirectly, out of the improvements, repairs or other construction on the property described in paragraph 1 above, or on account of any such mechanics’ or materialmen’s lien or liens or claim or claims, or in connection with enforcement of their rights under this agreement.