Understanding Change

Posted by webmaster

Jun 01, 2016

What You Should Know About Change Orders...

Before starting any type of remodeling or construction project, understanding Change Orders is very important. It's one inevitable part of contracts that can be avoided if the project is planned properly. Not realizing how Change Orders work could affect your pocketbook in a negative way.

To begin with, every project should have a contract that spells out exactly what is to be done, usually called the Scope of Work. Included in the Scope of Work and/or the Contract's Terms and Conditions should be a description of what it means to deviate from the Scope of Work, what Change Orders are, and how they apply. Extensive planning ahead of construction will lessen the chance for the need of a Change Order but let's face it, unknowns can occur during the course of the project that may prompt you to desire a change in the way things were originally drawn or specified. In addition, not every possible condition that may arise during construction could have been foreseen such as hidden structural damage, mold, improper methods from previous renovations, unsafe conditions and so on.

Change orders typically increase the cost of the project so if you want to stay on your original budget try to avoid changing the controlled costs, such as changing material selections. Another way to avoid adding costs on to your project is by dealing ONLY with the Contractor. When either party requests a change of any type, this should be in writing using the Change Order form provided by the Contractor and signed by the appropriate authorized people. Only then should the Contractor proceed with the changes. A Change Order form should include the original price of the project, a description of the desired changes, cost for the changes, and when the payment is due.

What happens if you don't follow these procedures? Well, here's an example of what could happen: you ask the electrical subcontractor if it is possible to add an outlet in a specific location while he is working at your home, he says it's no problem, you say thank you, he installs it, bills the Contractor, the Contractor gets upset with the electrician who is not authorized to make those type of decisions without a Change Order, the Contractor refuses to pay the electrician, and the electrician puts a lien on your house. This can all be avoided with a Change Order especially if it's several small items that need to be dealt with. Written documentation protects you, the Contractor, and his Subcontractors. Everyone is happy.

Keep in mind, Change Orders may possibly add money to the project but may also affect the completion date of the project as well. As we say at Virtuoso Builders, "Plan the work. Work the plan." Enough said.

Tags: change orders , remodeling , remodeling contracts , scope of work , experienced contractor , electrical , budget , tips