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5 Reasons For Change Orders

On home renovation and house addition projects we work on, we start the project with a clearly defined scope of work, and on larger projects, a set of architectural drawings.   As the work on the project progresses, there may become a need or a desire to deviate from the original plans and scope of work.  This is often referred to as a request for additional work, or a change order.

A change order is an amendment to the construction agreement, between the contractor and the homeowner, that adds, deletes, or changes the work that is being performed.   The plans, specifications and material selections may change, and these will usually impact on the construction schedule and the cost of the project.   Change orders are a routine occurrence on most renovation projects, especially larger home renovation and house addition projects.

There are primarily five reasons why change orders occur, which we discuss below.

Customer Initiated

Ideas and changes originating from the homeowner are by far the number one reason for change orders.  There are various reasons for this.  Usually it is the case of the homeowner seeing the improvements to the home, and deciding to extend the work into other areas of the home.

Sometimes, it is a matter of the homeowner not being able to envision what the final product will look like.  As the renovation starts to take shape, the homeowner decides he or she doesn’t like it and starts making changes.

Most projects we work on have changes initiated by the homeowner, and these usually add somewhere between 1% to 10% on to the cost of the project.  We have also had projects where the homeowner has increased the cost up by more than 50% with the additional work they had asked us to do.

Contractor Suggested

Often the contractor or builder will suggest a change be made, or additional work be done.  It’s like taking your car in for an oil change, and the mechanic suggests your car needs some additional repairs.

Sometimes these changes are suggested because the contractor has the best interests of the homeowner in mind.  The contractor sees there may be a better way to build than what was initially planned.  Unfortunately, there are also unscrupulous contractors who look at changes as a way to make additional money.  They will suggest additional work as a means to increase the price of the job.

Our practice is to make suggestions where we really see a real value to the homeowner.  On projects we manage, contractor suggested changes account for less than 1% of the cost of the job, really a small percentage of the project.

Unseen & Unforeseen Conditions

Larger renovation projects that involve walls being opened up or removed often lead to unexpected and unforeseen conditions being encountered.  In the case of a wall being removed, there could be electrical wiring or plumbing pipes in the wall that need to be relocated.  Or there could be asbestos insulation, or unsafe wiring.  On a recent excavation for a house addition, we discovered that the neighbour’s garage had no foundation.  And the most unusual item we have seen is an old septic tank in the backyard of a home in Toronto.

Building Inspector Requirements

Occasionally, a building inspector will require additional work to be done that is not on the plans or the scope of work.  Usually it relates to work that is being done, but sometimes the inspector will look at other items outside the work area and require work to be done.  Usually inspectors’ demands are reasonable, but sometimes they are not.   Ultimately, the homeowner has to decide whether they will  comply or seek out another person of authority, such as an engineer, to deal with the inspector’s concerns.  Either way, it adds additional time and cost to a project.

Errors in plans

Any project that requires a building permit will have a set of drawings to define what is being built.  Even projects without a building permit will often have a set of drawings to serve as a guide for the contractor.  Sometimes dimensions on the plans are incorrect, and often in the case of house additions, the new and old parts just don’t fit together the way the architect had imagined.  In these cases, the contractor or builder will need to make adjustments, or the plans may need to be revised.

Making Changes

It is best to agree to the changes in writing, and obtain a price on changes before agreeing to them.  The impact on the construction schedule should also be assessed.