Being able to design and create your own custom home is such an exciting experience. Dealing with contracts and paperwork is not.

Both homeowners and contractors want to deal with as little unnecessary paperwork as possible. However, a home build project is unlikely to remain the same from start to finish. That is where change orders come into play.

What is a change order?

A change order reverses the language in the original contract in order to accommodate the new change.

Some of these changes can include a lowered price, a changed condition, or an advanced finish date.

Change orders are expected

Common contracts between homeowners and contractors include a new home build, installing a pool, adding onto the home, and full-scale remodels. Things can change in the blink of an eye so change orders are completely normal.

Change orders allow all parties involved to stay on the same page. A paper trail is important when things start to shift during a project and keeps everything organized. Having these changes in writing also helps if any legal issues arise.

Starting a change order

Either the homeowner or the contractor can request a change order. These usually result from errors in the original paperwork, omitted details, additional work that is being requested, or any work that may result from an unpredictable incident.

In order for a change order to be in effect, both parties must agree and sign off on the order.

Upgrades

More than likely, a change order is requested as a result of the homeowner needing something added to the home.

Even something as small as having an extra window added must be documented by a change order.

The details

A change order will include many fine-tuned details. These can include:

  • The original contract date
  • The date of the change order
  • Original cost
  • Value of change
  • Cost of change

Each contractor has their own change order form and they typically are no longer than two pages long.

The cost

It is rare for a change order to result in lower contract value. The only way this can happen is if the homeowner decides to use cheaper materials or changes their mind on an addition.

Because of the added cost and hassle of initiating a change order, it is important to have a clear and concise plan when embarking on a construction project.

SOURCE

BLOG