Saturday, April 21, 2007

The Change Order

I once had a construction lawyer say to me, "If there were one thing I would say to both contractors and homeowners to prevent problems during construction projects, it would be, 'All change orders should be in writing!"

One day, I will go through my active cases and figure out how many of the disputes could have been prevented if the parties were to follow that rule. Homeowners frequently believe that items are included or will not cost extra. Contractors submit bills after the fact for "extras" that were unanticipated. Then the misunderstandings occur.

Change orders should include a full description of the new work to be done, the types of materials to be used, and how the change will affect the expected completion date. They should spell out the additional price for labor and materials. Finally, they should be signed off on by all parties. If subcontractors are to be used to affect the change orders, I would note that down as well.

It does not imply distrust to write down the agreement between the parties. Instead, it enourages clear-cut communication and prevents problems. So, make sure that you spell out all change orders to keep the project running smoothly.

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