Change Orders

nadonailer

I know we've discussed this before, but humor me and lets do it again - maybe there are some new ideas out there? Anyway I had this 100k+ remodel for a client that lives out of town. In the beginning, the changes were easily documented, we communicated via email. But when things went sour and communication was awkward at best, I did a good bit of work on good faith that I am going to get stiffed on. I know, I should know better by now, its just easier sometimes to plod ahead y'know?

So what's the best method for doing change orders? Mainly on remodels.

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"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

jmic

Bruce,
All change orders we do are signed and paid for in advance of any materials being ordered or any work being done on the changes. Seems to work well this way.

__________________
___"Remember You Never Get A Second Chance To Make A First Impression"______________________
Joe

K_Tile

To add to jmic comment. We also make sure that all parties sign off on the change order. If its a husband/wife; wife/wife; husband/husband everyone will sign and then pay for the change order. Nothing worse than getting in the middle of a $2500.00 faucet the Misses had to have and the husband finds out how much it costed later

Double-A

You can't sign a change order via e-mail.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

jmic

Double,
You can print it, sign it, and scan it back so it can be e-mailed. And so what if you had to drive to their house to pick it up along with the monies involved, don't you think this is a better situation than fighting for it later after the work was completed?

__________________
___"Remember You Never Get A Second Chance To Make A First Impression"______________________
Joe

ApgarNJ

I get change orders signed before we make any of the changes, but I don't get paid until the change has been completed. It's a separate invoice. If I get into a job and I get to know the people very well and we have a good relationship going, and they make some minor changes, I'll just do the changes and charge them when it's done. I'm not the kind of person that just shuts the job down because I can't get both parties to sign it in a timely manner. Sometimes clients are away, or one of them is away on business and you just can't wait for a week or more to get them back there to sign a change order. It all depends on the amount of money the change order is going to be.

The job we just finished had more change orders than any other job I've ever done, I think they added up to about 45k in the end. It's funny because the contract price(350k) they agreed upon was a lot more than they wanted to spend, and then they go add that much more along the construction process.

Grumpy

The problem sometimes is you need a change order NOW and the customer is nowhere to be seen. Sometimes when you have 5 guys standing around that need a decision before any work can proceed, you just have to make a judgement call and go on your gutt... but ya can't pay a crew to pick their butts waiting.

With us typically change orders are done by fax or in person. We try to always get change orders but sometimes it just isn't possible.

Mike Finley

Nado - one thing that has helped smooth the construction process for us is during the initial contract signing phase, there is a section on the contract that talks about "customer responsibilities" it goes over the usual stuff like having electricity, water, toilet available during the project, but it also talks about communication. We usually have a 2 minute conversation about how they don't necessarily need to be on the job site everyday, but they do need to be available for me to contact them during the work day - (the entire work day), I usually start the conversation and customers usually fill in the blanks very quickly offering up all kinds of office numbers, cell phone numbers, faxes, secretaries numbers... We talk about the importance of being able to contact them and how there could be additional hourly charges if we end up having to stand around waiting for 3 hours for them to get back to us.

That conversation has virtually eliminated me ever having a problem with having to halt work over a situation. A version of it might help you out too.

The change order process is pretty simple. If the customer is there, we show them the issue, we give them a price and they okay it. One of two things can happen from there, I either pull out a change order and fill in the blanks and have them sign it and wright the check or since we are usually pulling progressive payments along the way of the job I will give them the change order along with the invoice for the next progressive payment and collect it all together. This could sound a little dangerous, since essentially we are doing some work without a signed change order, but you have to use common sense, if you are 1/3 of the way through a job and they are now going to go nuts on you and act like they never had the change conversation then it's time to stop work. It can all be simply about leverage, keeping the advantage of leverage at all times keeps you out of trouble.

DaveH

I always discus change order process prior to contract signing. I have had few projects that didn't involve at least a small C.O. You can make an agreement before starting that changes have to be made a certain way and no changes will be made until this procedure happens. I have found it is much easier to talk about the process before it happens then when you have thousands of dollars being held up by a small change order...

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A buck a foot is not an estimate! It's a crap shoot!

Double-A

Absolutely. We don't allow two signatures on change orders. Our contracts state that a change order will be signed by only one party, acting on behalf of all interested client parties. That person is elected and noted on the contract. It also states that this person agrees to consult the other interested parties before signing.

The change order also says that they have spoken to and explained the scope and costs involved with this change order with all interested parties they represent.

We won't move ahead on change orders until they are signed unless they are under 1K. We'll risk 1K but no more. Payments are detailed on the change order.

We bend over backwards to accomodate our clients even to the point of driving across town or hiring a courier to move paperwork along. I've had my job forman pull a carpenter off a job and have him remove a car seat, install in a work truck and drive a client to pick up their child from preschool because our work was blocking the street and had trapped their car.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

InterlockPavers

Change order = cha ching $$$

nadonailer

Thanks, guys - but what do you do when the homeowner is out of town?

__________________
"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

Mike Finley

Have em leave you a blank check?

Melissa

You should put it in your contract that they need to fly down immediately for change orders to sign the contract and to give you a check!

Just use phone, email, fax, and mail. Take digital pics and email them if you have to.

I could imagine, that leading to misunderstandings (HO being out of town). Just protect yourself as much as you possibly can. Assume the worst.

We are very guilty of not getting signed change orders. Which reminds me that our current job, HO changed it from a window to a skylight. That's an easy situation, but say you open up a wall, and discover major damage, I'd defnitely get a signed change order and some $ before you proceed. Even if the HO gives a verbal okay, get it in writting! I know someone who got screwed big time this way.

ApgarNJ

the homeowners we just started working for, for this addition, live in Italy. should be interesting when we do have a change order. some clients however you get the feeling that they aren't the change order type and some are. I don't think these people will be adding a lot onto the contract. they are moving here in the fall. the parents live in the main house on the property, we are working on a detached ranch house, that they'll live in when they move to the states.

A+Carpenter

i Dont Even Want To Hear The Phrase Change Order Again After The Last Client

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nadonailer

Me Either!!!

__________________
"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

Double-A

That depends on how long they plan to be out of town. Our take on it is this:

A home is probably the biggest investment most people will make in their lifetime. When you're having remodel work or an addition to your home, you need to be aware that problems that are beyond the control of anyone may arise. You need to be available to inspect these problems with your contractor to jointly decide on the course of action that best suits your needs. This is known as due diligence.

With this in mind, being out of town or otherwise unavailable when one of these types of problems happens can bring the entire job to a halt, possibly costing hundreds of dollars in lost time. If you have to leave town or otherwise be unavailable, notify your contractor as soon as possible so that the schedule may pushed forward (if possible) or be delayed to accommodate this.

If you fail to practice due diligence then you are jeopardizing your investment. Its hard to blame someone for doing something different than you would have liked if you're leaving the decisions up to them. As the homeowner the responsibility ultimately falls on your shoulders to tell your contractor exactly what you want.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006