It's no fun dealing with contracts when doing home remodeling or home construction. Most homeowners just want the thing done--minimizing the paperwork as much as possible.
1. Changes Orders Legitimize Changes In the Contract
You and the contractor draw up an initial contract to do some work, likely things like new home building, putting on an addition, installing a pool, and so on.
Because it is inevitable that changes may occur during the course of the project, change orders allow the contract to accommodate these changes.
2. It's Not Just the Client Who Initiates Them
Both parties can and do request change orders. Kia Ricchi, in Avoiding the Con in Construction, states,
"Since change orders typically increase the project cost, they are the curse of every homeowner. Most change orders result from:
- Errors and omissions in contracted work
- Work arising from unknown conditions.
- Owner-requested additional work."
3. Upgrades and Additions Comprise Most Change Orders
The most common event that initiates a change order is when the homeowner decides to add an element to the project: more windows, better windows, different flooring, higher ceiling, better-grade appliances, etc. Every change in the contract, even the smallest change, must be documented in the form of a change order.
4. Striking Out Language In the Original Contract Is Possible, Just Not Easy
This is a practice that homeowners are accustomed to when purchasing or selling a property--tweaking a price, condition, or another single data point. Change orders for remodeling and construction are different because so many data points are involved.
5. Each Change Is Highly Detailed
Change orders are documents that contain a significant amount of information that cannot be conveyed via hand-written notes to the contract. For instance, the change order will contain the date of the original contract; date of the change order; original cost; the value of change; the cost of change; and much more. Most importantly, change orders give specifics about exactly what will be done with the change. The change order will need to be signed by both you and the contractor.
6. There Is No Universal Form For This
There is no universally-accepted change order form, but the contractor will have a change order form of her/his own. It is rarely more than one page long, and at the very least will contain the information stated above.
7. Change Orders Almost Always Cost You More Money
As Kia Ricchi mentioned, it would be very rare to encounter a change order that results in a lower contract value. Thus, it is imperative to avoid change orders as much as possible--even if you are the one initiating the changes.
Ms. Ricchi advises homeowners to "...develop a concise, correct, complete, and clear scope of work so that the building plans, proposals, and contract provide for all the necessary work."