Change Orders: The C-Word, Part 2

Because many homeowners have become hip to the change-order hustle that many contractors run (see Change Orders: The C-Word, Part 1), there is often no better way to alienate a client than to start throwing the C-Word around during the course of a renovation.

The truth is that outside of often being unethical, change orders are simply bad business. If adequate time and planning is invested during the design of a renovation, the need to “change order” once construction has begun, should be rare. Typically, a change order represents one of the following oversights on the part of the architect (during the design phase) or the contractor (during the preconstruction process):

• Not enough research was done to assess the existing conditions of the space being remodeled. Hence “surprises” are uncovered and the contractor tries to pass off the extra cost of the work associated with the “unforeseen” condition.
• Material selections and finish details were not communicated clearly to the homeowner, so client and contractor expectations do not align. Consequently, work must be redone, or materials reordered which can get expensive quickly in the case of items such as custom cabinetry that cannot be returned for a refund. In the contractors mind, he is going above and beyond what was agreed upon in the contract, so feels justified in seeking additional compensation. The homeowner of course has a much different perspective.
• A design element was not thought through by the architect or a member of the design team; hence is unbuildable. A course correction is required, the cost of which the contractor tries to pass off on the homeowner.

At Four Brothers, we avoid change orders like a plague. One of the advantages of our Design/Build model is that the “designers” and “builders” are all on the same team. The symbiotic nature of this relationship organically eliminates discrepancies that can arise in the more traditional Architect/Contractor pairing. The limited occasions when Four Brothers might find it appropriate to issue a change order are as follows:

• A client requests a significant change in the agreed upon scope of work during the course of construction. Such a circumstance is illustrated below.
  • The design of a kitchen remodel (as outlined in the contract and contract blueprints) calls for a small exterior door (that leads out to a deck) to be replaced in kind. While the idea of opening the entire back wall with a sliding door and sidelights was raised during the design phase, the homeowner opted against it. But once construction is underway, she changes her mind and decides that she really wants the added light and access the sliding door will provide. This is doable, but more labor (a structural header must be installed across the back wall) and materials (a sliding glass door and sidelights can cost thousands of dollars) will be required than what was accounted for in the contract pricing. In such an instance, a change order is justified and necessary.
• A truly unforeseeable condition is uncovered during construction. In your standard kitchen or bathroom remodel, this should almost never happen – even when working in hundred-plus year old homes that are typical in the Washington, DC area. In larger projects such as a full home remodel, unanticipated conditions are more likely, but should not be the norm. An example of such a condition would be as follows.
  • Our architects’ blueprints call for a two-story, 1930’s row-home to be fully remodeled in a new configuration. The exterior brick walls and second floor joists will remain, but the plan calls for everything else to be gutted. After demolition is complete, it becomes apparent that the second floor joists are sagging severely – close to four inches in the middle of the home. This was unforeseeable because the ceiling of the first floor had been padded down, and the top floor leveled during the course of a previous renovation. Plus, the row home is not exceptionally wide, so there was no reason to suspect such deflection. If left unaddressed, the floor joists might eventually pull out of the pockets in the brick party walls and crash to the floor below. It will be necessary to consult with a Structural Engineer, and perform significant additional framing work. In a case such as this, a meeting will be scheduled with the homeowner, where the unforeseen condition will be discussed, and extra compensation for the additional work agreed upon.
• “Scope creep”. Many or our renovations touch on only a small part of the home – the bathroom or kitchen for example. Also, every remodeling project is designed with a budget in mind. Because of this, we can’t fix everything that needs fixing in the house during the project. We find that when we are on a job, homeowners are sometimes tempted to ask us to fix additional items in adjacent rooms while we are there. Often, our lead carpenters will oblige, but there are times when we need to refer the homeowner back to the original contract, and explain that if we add multiple small items, it can cost us time and money. At this point, our carpenters will give the homeowner a price to fix additional work.

And none of this is to say that Four Brothers’ architects and designers do not make mistakes or overlook important details from time to time. And typically these oversights end up creating unplanned work and costing more than what was in the budget. But we believe strongly that a customer should not be penalized for our mistakes; so when this happens, we will simply perform the extra work without issuing a change order. At the end of the day, a happy customer is far more important to us than a few lost dollars along the way!