During a home remodeling project, change orders are used to refer to any adjustments in the original plans between the property owner and contractor. The original agreement will include a description of the scope of the work to be performed, the milestones along the project’s timeline, estimates of costs, along with designs that have been drawn up. Each of these categories may need to be updated for a variety of reasons, and so change orders inevitably occur in the vast majority of construction projects.

There is no foolproof way to eliminate change orders from home improvement projects, and many factors like increasing costs may be out of the hands of the homeowner or contractor. The best way to minimize change orders is for contractor and homeowner to have a mutual understanding of the other’s expectation, and to include details for the design and construction of later segments of the project as early as possible.

Contractor’s customers also often change their minds in the middle of a project about the aesthetic or function of something that was previously agreed upon. A homeowner might decide, after seeing the initial progress on a bathroom, they would like to change the location of a sink. The designs would have to be redone, and the already completed work would not only be wasted but time would need to be spent undoing the initial progress. Another example is a homeowner requesting different knobs for kitchen cabinets, delaying the project for an entire week while the contractor waits for materials to arrive. A few issues like these are manageable for both parties, but without proper communication, excess work adds up and wastes time and money on both ends of the deal. Improper planning leads to inefficient results, and homeowners and contractors will end up getting increasingly frustrated as a project drags on longer than expected.

Change orders can cause a headache for contractors but also allow fraudulent contractors to take advantage of naive homeowners. A contractor and client relationship is complicated due to the inevitable asymmetry in information during a project. Contractors have prior relationships with suppliers they may use, and collusion between the parties can exploit customer funds. A supplier and contractor may provide fake documentation or claim that a material is unavailable, therefore a more expensive option must be used. Ask for receipts to be sent directly to you and make sure to upload them as part of the contract. Many unexpected change orders can also be a red flag the contractor is being dishonest about the increases in prices. Excluding obvious information that will need to be dealt with later in the project may be indicative of future misconduct.

A contractor may try to charge a fee just to make a change order, even though the contractor knew the change would need to be added in anyway. Contract Keepers Solutions charges the homeowner a small percentage of the total value of the contract, and there are no fees for updating a contract. Homeowners will only have to pay the difference in the updated total value of the contract, and not be subject to unnecessary fees. Try to consider the parts of the project that may be susceptible to change and discuss with your contractor ahead of time to plan for the changes that will occur later.

Contractors and their customers must agree to make a change order, although a customer may demand work to be changed even if the contractor does not agree. Most types of construction contracts include CCD provisions (construction change directives). These provisions require contractors to make the changes their customers ask for as long as the work can be included within the original scope of work. Understanding this is important for homeowners to level the playing field with contractors, and so homeowners do not allow themselves to be pressured into agreeing to unsatisfactory work. Without this provision a contractor could perform only the work in the original contract, and customers will have no choice but to pay for a job they may or may not look as the homeowner had hoped.

Companies or government projects planning large scale construction projects that require bidding are susceptible to fraud due to the nature of the large scope of the projects. The same officials approving the need for a change order may be getting paid off by a contractor. In addition, dishonest contractors may offer the lowest bid, but they charge change orders later in the project that drive up the price above what the estimated price was planned to be. These are unexpected changes to the customer, however contractors went into the project knowing they would make certain change orders to turn a profit. They intend to increase their margins by upcharging on materials purchased for a change order, unnecessarily extending the timeline and billable hours of labor, using materials leftover from another project, and using cheap tools or materials . These are a few examples and there are many more that creative, fraudulent contractors may come up in the middle of a project.

Construction attorneys helping either side of a construction project dispute will spend an abundance of time and billable hours conducting research into whether a change order falls under the original scope of work, and Contract Keepers Solutions can save time and money for contractors and property owners. First and foremost, documenting all steps from the beginning to end of a project is essential and any contractor or person using our services will be glad they gave the extra attention to these details if they are unfortunately forced into a dispute. Communicating through our portal is helpful to keeping track of who said what in a dispute where it is one person’s word against another’s. Using our customized contract and milestones to release funds allows both parties to stay on the same page and plan ahead.

No other software gives contractors and their customers the bundled service of payments and agreements created and stored in one place . Many contract management systems offer businesses the ability to store receipts and legal agreements, but no competitor offers our service to send and receive payments. No other escrow service with a money transmitter license gives customers the ability to create a customizable, enforceable contract. To conduct smooth and amicable transactions for property owners and contractors try using Contract Keepers Solutions, affordable protection for property owners and efficient management for contractors.