Change Order
Definition and meaning of Change Order in real estate.
A change order is a written amendment to a construction contract that alters the scope of work, contract price, or completion schedule, and must be signed by the owner, contractor, and architect.
In more detail
Change orders commonly arise during home renovations or new construction projects when unexpected site conditions are discovered or the owner decides to change materials or designs. This document ensures that all parties agree to the modified work and any adjustments in cost or time before the new work begins.
Unapproved verbal changes can lead to legal and financial disputes at the end of a project. Properly documented change orders are essential for keeping construction budgets on track and avoiding misunderstandings.
Key facts
| Category | Property Types & Construction |
|---|---|
| Required signatures | Property owner, contractor, and typically the architect or designer |
| Key elements | Description of work, cost adjustment, and updated completion date |
| Watch out for | Failing to get changes in writing can lead to payment disputes |
During a kitchen remodel, the homeowner decides to upgrade from laminate to quartz countertops, prompting the contractor to issue a change order specifying the additional cost and the extra time needed for delivery.
Frequently asked questions
Can a contractor charge for work done without a signed change order?
In many states, contractors cannot legally collect payment for unauthorized changes that were not approved in writing by the owner. It is critical to sign a change order before work starts.
Do change orders always increase the cost of a project?
Not always. A change order can also decrease the cost of a project, which is known as a credit change order, if the owner decides to reduce the scope of work or choose cheaper materials.