For homeowners who haven’t lived through a remodeling project but who have heard their neighbors and friends’ horror stories, the term “change order” has a pretty lousy connotation, right up there with “no-show contractor” and “limited warranty.” But these documents, which record changes in the contract between the client and the contractor, need not be feared.
To be honest, a remodel without a change order is a rare bird, reports Daniel Griffin, president of the Home Builders Association of Greater Chicago. It is the contractor who replaces contracts and change orders with a friendly handshake that should be feared.
Most change orders will usually fall into four categories:
- Homeowner-generated. The homeowner changes his/her mind about a specific product, for example, deciding to install hardwood floor instead of laminate flooring. Or, the customer alters the layout of a project, installing an additional kitchen window where there wasn’t one existing.
- Contractor-generated. The contractor might have a constructive suggestion, as in installing tile in a herring-bone pattern instead of a standard brick pattern
- Unforeseen circumstances. Although a reputable contractor warns his client about his suspicions, such as mold behind a wall, older houses yield unforeseen issues that must be corrected before work can proceed on the project. Some examples of these issues may be asbestos, termite or carpenter ant damage, subpar electrical, and damaged framing.
- Inspector-generated. There have been many remodeling projects stopped in its tracks because of additional work required by village or city inspectors. Because inspectors interpret building codes differently and codes are ever changing, these requests are hard to anticipate. Typically, these changes involve bringing an older home “up to code.”
“It is a myth that change orders always add to the cost of the project. Some changes, such as choosing a less expensive product, reduce the final cost. Some don’t affect the cost at all. For example, some change orders may be for a different paint color when the client changes their mind.” -Daniel Griffin
Whether or not a change order inflates or deflates the bottom line, most contractors and homeowners try to avoid change orders. At the least, they require time out for the change order to be typed and for everyone involved to sign it. At the most, they can cause delays in the project while the contractor waits for a new product to arrive or another subcontractor to come on board.
The homeowner can reduce the number of change orders on his/her remodeling project by shopping for every product before they sign the contract. If a customer changes their mind about a product, it’s highly recommended to do it before the product is on site.
Because change orders are a matter of course and can increase the final cost, the customer should set aside a contingency fund of approximately 10% of the total project cost.
BY: RYAN FABORITO