Understanding Construction Change Orders Before They Cost You Thousands
What Every Homeowner Should Know About Change Orders
Few terms create more confusion during a construction project than the phrase "change order."
Many homeowners assume a change order simply means modifying the project scope.
While that can be true, change orders often impact project cost, schedule, materials, and responsibilities.
When homeowners do not understand how change orders work, they can quickly become a source of budget overruns, project delays, and contractor disputes.
Quick Answer
A construction change order is a written modification to the original contract that changes the scope of work, project cost, timeline, materials, or project requirements.
Every change order should clearly explain what is changing, how much it will cost, and whether it affects the project schedule.
Homeowners should never rely on verbal change orders.
What Is a Construction Change Order?
A change order is a formal written document that modifies the original agreement between the homeowner and contractor.
Change orders may be created because:
- The homeowner requests a change.
- Unexpected conditions are discovered.
- Materials become unavailable.
- The scope of work changes.
- Design revisions are made.
Once approved, the change order becomes part of the construction contract.
Why Change Orders Increase Project Costs
Most change orders involve more than the cost of the new item itself.
Additional expenses may include:
- Additional labor
- Additional materials
- Demolition of completed work
- Project management time
- Schedule adjustments
- Subcontractor coordination
Even a small change can affect multiple aspects of a project.
Example
A homeowner decides to relocate a kitchen island after plumbing rough-ins have already been completed.
The contractor may need to:
- Modify plumbing lines
- Adjust electrical work
- Coordinate additional inspections
- Reschedule subcontractors
The final cost often exceeds the price of simply moving the island.
Common Causes of Change Orders
- Upgraded materials
- Design changes
- Owner requests
- Site conditions
- Structural discoveries
- Building code requirements
- Product substitutions
- Allowance adjustments
Many change orders are normal and expected.
The key is how they are documented and managed.
Red Flags Homeowners Should Watch For
- Verbal change approvals
- Missing pricing details
- No schedule impact listed
- Unclear scope descriptions
- Pressure to approve immediately
- Work beginning before approval
Every change should be documented before additional work begins.
What a Proper Change Order Should Include
A complete change order should identify:
- Description of the change
- Reason for the change
- Additional cost or credit
- Schedule impact
- Affected materials
- Signatures from both parties
If any of these items are missing, ask questions before signing.
Can Homeowners Refuse a Change Order?
In many situations, yes.
If the change is optional, the homeowner may choose not to proceed.
However, if the change relates to code requirements, structural issues, safety concerns, or unforeseen conditions, refusing the change may not be practical.
The key is understanding why the change is being requested.
How to Reduce Change Order Risk
Many change orders can be minimized through better planning before construction begins.
Homeowners should:
- Finalize selections early
- Clarify scope before signing
- Review allowances carefully
- Ask questions before construction starts
- Document decisions in writing
The more decisions made upfront, the fewer surprises later.
Change Order Protection Checklist
- ✓ All changes documented in writing
- ✓ Cost impact clearly defined
- ✓ Schedule impact identified
- ✓ Scope changes explained
- ✓ Materials listed
- ✓ Homeowner approval obtained
- ✓ Contractor approval obtained
- ✓ No work begins before approval
Frequently Asked Questions
What is a construction change order?
A written modification to the original construction contract that changes scope, cost, schedule, materials, or project requirements.
Are change orders normal?
Yes. Most construction projects experience some level of change orders.
Can a contractor perform work without a signed change order?
That depends on the contract, but homeowners should generally require written approval before additional work begins.
Why do change orders cause disputes?
Most disputes occur when pricing, scope, or schedule impacts were not clearly documented before work began.
Final Thoughts
Change orders are not automatically bad.
However, they can become expensive when they are poorly documented, misunderstood, or approved without sufficient information.
The more clearly changes are defined, the lower the risk of confusion and disputes.
Builders have representation.
Architects have representation.
Contractors have representation.
Homeowners usually do not.
That is why RCC exists.
As The Homeowner's Representative™, RCC helps homeowners review change orders, understand project impacts, evaluate contractor requests, and make informed decisions before approving costly modifications.
Before Approving a Change Order, Understand the Risk
The Free Build Risk Assessment helps homeowners identify contract concerns, change order exposure, budget risks, and project planning issues before costly mistakes occur.
Start the Free Build Risk Assessment™