What is a Change Order?
Updated: Jan 13, 2022
Change orders are essentially construction contract amendments, and can differ according to the type of the construction project, its stakeholders and the exact change required by the involved parties.
It’s not uncommon in the course of a home construction project for changes to be made to the contract’s scope of work. Perhaps a room needs to be expanded to accommodate a deeper closet or the original placement of kitchen cabinets is no longer the best choice when you realize that you always wanted counter space where people could sit at the counter and talk to you while you prepare a meal.
Regardless of the alteration, a change in the scope of work will likely affect the project’s total cost as well as its completion date. These changes, not handled in the proper manner, are the most cited reason for disputes between the contractor and client.
To that end, it is vitally important for the contractor to detail these changes in writing, known as a “change order,” and for both the contractor and homeowner to sign the order prior to that work being performed. This simple act, if ignored, could lead to a giant legal headache if any disputes arise over cost increases or delays to a project’s timeline. The best practice for both parties is to maintain clear, direct, and documented communication.
So, what should a change order contain? For starters, a description of the additional work or the change to the original scope of work. But, generalities such as “cabinets” or “counter tops” is not an adequate description of the work to be done. What type of material is the cabinets going to be made from? Full pull-out drawers? Are the shelves going to be pull-outs? What kind of hardware? Solid doors? Other necessary information is a list of the revised costs and the changes to the work schedule. Pictures of the area subject to the change order can be helpful but are not a requirement.
To be completely effective the change order should be as specific as possible to avoid any confusion or misunderstanding. And, again, it is critical that both the contractor and homeowner sign and date the change order before the work described is performed.
Most contractors already use a change order template, but whether you’re a contractor or a homeowner, if there’s any question as to the contract or the change order’s content and form, it is always wise to consult with a reputable litigation attorney. It can save you many headaches down the road.
There exists many reasons for changes in an exceedingly construction project. First, change orders may result from disputes among the key players in a construction project in scope, quantity, or quality demanded by the owner. Such changes don't seem to be uncommon, and for many years might go on between the parties involvrf, and the resulting choices through the completion of the project. In this amount of your time, several factors will influence the owner’s call on what they need, yearn for, and might afford as a final product. The owner might need further parking, a special workplace configuration, totally different info technology capabilities, or a change of interior elements from the agreed upon plan.
A second supply of changes will come back from hid or unknown conditions. Hidden or unknown conditions are typically outlined as unforeseen physical conditions that disagree materially from those indicated within the construction documents or unknown physical conditions that disagree materially from those items usually recognized as inherent in construction activities. The character provided for within the construction documents, include such conditions will vary from unsuitable soil, rocks, underground water, or hidden issues in aexisting structure. Any situation that might not be moderately known to the contractor, contractor, engineer, or designer, that disagree materially from those known commonly, might become a supply of changes. Alterations would need time beyond regulation or cash to create modifications to the plans and to finish the work. Such modifications would be created through a amendment order.
Mistakes, errors, and omissions within the construction documents define another source of change orders. These square measure what square measure thought of constructive changes. Such changes alter the scope or amount of a project, and will lead to modified prices and accumulated time. samples of such a constructive amendment directive may well be a position that's the incorrect size, inadequate house on top of a ceiling for the required HVAC ducts and instrumentality, or a flashing detail that doesn't add the desired application.
Another major supply of amendments and change orders is the ongoing substitution of materials and products from the orginal specifications, which by itself could have discrepancies, which require clarification. Alternative materials could become substituted if they're deemed as akin to, or higher than, the required material. The substitutions could result from worth, handiness, or compatibility with alternative material. The owner could request a special variety of roofing than printed within the plans and specifications. In real terms, for example with the roofing, the contractor has created a amendment within the contract, which might not impact the value or timeframe of the project.
The importance of the amendment order method is indicated by the bucks concerned in changes to a project. Changes in contracts usually vary from five to seven percent on new, stand alone new arrivals on a contractor's schedule. Reworking or renovating a house or building usually takes a while to apply any changes. For example, on a $20 million new, stand alone project, like a college or associate degree edifice, changes would run from $1million to $1.4 million. The breakdown of changes is predicated on a percentage of the entire value.