Construction draw inspections protect the lender and the owner by confirming that requested funds match completed work. This construction draw inspection checklist covers the field observations, documents, and reconciliations that should be complete before an advance request is submitted.
Use it for multifamily, commercial build-out, and ground-up projects. Every lender has its own form, but the verification logic is remarkably consistent.
Construction draw inspection checklist: the 15-point review
- Confirm the inspection period. Record the draw number, application period, inspection date, and the cutoff date for completed work.
- Match the schedule of values. Every line requested in the draw should map to the approved schedule of values without new or renamed categories appearing unexpectedly.
- Verify stored materials. Confirm location, quantity, condition, ownership, insurance, and whether the lender permits payment for off-site materials.
- Observe installed work. Compare visible progress with the percentage complete claimed for each major trade.
- Check prior-funded work. Confirm that work funded in the previous draw remains in place and has advanced as expected.
- Reconcile change orders. Approved change orders should be reflected in the contract sum and schedule of values; pending changes should not be funded as approved scope.
- Review general conditions. Time-based billing should align with elapsed schedule duration and documented staffing.
- Confirm retainage. Apply the lender- and contract-required retainage consistently to current and completed work.
- Track permits and inspections. Note required permit milestones, failed inspections, open corrections, and certificates affecting the next phase.
- Identify defective or incomplete work. Photograph and describe material deficiencies that affect percent complete or payment.
- Check the project schedule. Compare planned progress with actual progress and identify activities driving delay.
- Validate lien waivers. Collect the conditional and unconditional waivers required for the current and prior payment periods.
- Reconcile invoices. Supporting invoices should total to the amount requested and should not duplicate prior billing.
- Calculate remaining cost to complete. Compare the undisbursed balance with realistic remaining obligations, approved changes, and known exposure.
- Create a photo record. Use dated, labeled photos tied to areas or schedule-of-values lines so the file can be audited later.
What to bring to the inspection
- Current pay application or advance request
- Approved schedule of values
- Previous draw report and photo log
- Current project schedule
- Approved and pending change-order log
- Permit and inspection status
- Stored-material invoices and certificates
- Lien-waiver tracker
Five draw red flags that deserve a closer look
Front-loaded schedule of values
Mobilization, supervision, or early trade lines that are disproportionately large can move cash ahead of actual progress and leave too little money to finish.
Percent complete that exceeds field progress
A clean invoice is not proof of installed work. When visible progress does not support the claimed percentage, document the difference and fund only the defensible amount.
Repeated “stored materials” billing
Stored materials should be identifiable, protected, insured, and removed from the stored-material balance when installed. Repeated billing without reconciliation creates duplicate-payment risk.
Change orders appearing before approval
Pending change orders belong in the risk log, not in the approved contract sum. Mixing the two obscures the true remaining contingency.
Waiver gaps
A missing waiver from a major subcontractor can become a lien problem even when the general contractor has been paid. Track the waiver chain by vendor and draw period.
How the draw package should reconcile
The current payment request, prior payments, retainage, change orders, and remaining contract balance should reconcile mathematically before the package goes to the lender. Where the lender requires AIA forms, the G702 summarizes the application and the G703 carries the line-item continuation sheet.
Epex Consulting administers construction draws against the schedule of values, coordinates supporting documents, and maintains an audit-ready file from first draw to final release. Learn more about our construction draw administration service and our Burgoyne Townhomes draw-administration case study.
Frequently asked questions
Is a construction draw inspection the same as a code inspection?
No. A code inspection addresses compliance with applicable codes at required milestones. A draw inspection addresses funding risk by evaluating visible progress, documentation, and the relationship between money requested and work completed.
Who orders the draw inspection?
The lender often orders it, but owners and equity partners may commission an independent review when they want their own verification of percent complete and remaining cost.
Does the inspector approve payment?
The inspector reports observations and may recommend an adjusted percentage. The lender or owner makes the funding decision under the loan and construction contracts.
How long should a draw inspection take?
Field time depends on project size and complexity. The larger risk is usually not the site visit itself but incomplete backup, unreconciled changes, and missing waivers after the inspection.
Need an independent draw review?
Bring the schedule of values, current pay application, and last draw package. We will identify what a lender is likely to question and outline the fastest path to a fundable package.
Book a free 20-minute project review or explore our multifamily construction advisory services.