Change orders explained: how a renovation price changes mid-job

What a change order is

A change order is a written amendment to your renovation contract. It records a change to the work, the price or the schedule after you have signed. In Australia it is usually called a variation.

Change orders are normal. You pick a different tile, or the contractor opens a wall and finds rotten framing. The problem is not the change itself. The problem is a change agreed out loud on site that turns up on the final invoice at a price you never saw.

What the rules say

Rules depend on where you live. Some places spell them out.

• California. The CSLB says price or scope changes need a written change order, signed by you and the contractor before the change takes effect. The change order then becomes part of the contract.

• New South Wales. NSW Fair Trading says variations must be in writing, attached to the contract and signed by both parties. They must explain the cost and the effect on the overall price, showing the calculation, not just a dollar figure. If a variation is needed because of the builder's own fault, you do not have to pay for fixing it.

• Victoria. Consumer Affairs Victoria says the builder and client must agree in writing to changes before the work is carried out, with the new price and completion date recorded in the contract.

• Ontario. Ontario's guidance says a contractor cannot charge more than 10% above a written estimate unless you request additional or different work and sign a change to the contract.

Many other states and provinces have no specific change-order rule for homeowners. A written, signed change order is still the simplest way to protect both sides. Check your state, provincial or territory consumer agency for local rules.

What a good change order shows

Look for these items on every change order:

1. A reference to the original contract. Contract number or date, and the change order number.

2. A clear description of the change. "Replace 40 sq ft of subfloor in main bath with 3/4 in plywood," not "extra carpentry."

3. The cost of the change. Labor and materials, or a fixed price for the change.

4. The calculation. How the figure was reached, such as units times rate, or cost plus markup.

5. The new contract total. Original price, plus or minus all approved changes so far.

6. Time impact. Extra days added to the schedule, if any.

7. Payment timing. Whether the change is paid now, at the next stage or at the end.

8. Signatures and dates from you and the contractor.

A sample change order

This is a synthetic example from a fictional company.

Northgate Renovations (synthetic). Change Order 3 to Contract NR-2291 dated March 4.

Description: Replace damaged subfloor in main bathroom, approx. 40 sq ft, 3/4 in plywood.

Price: 40 sq ft at $18 per sq ft = $720. Disposal: $60. Total this change: $780.

Original contract price: $14,200. Approved changes to date: $1,150. New contract total: $16,130.

Schedule: adds 2 working days. Payment: due with next progress payment.

What to check here: the arithmetic ($720 + $60 = $780; $14,200 + $1,150 + $780 = $16,130), the unit price against any unit prices in your original quote, and whether the 2 extra days affect other trades.

Change orders you might not have to accept

Not every change order is a fair extra. Ask questions when:

• The work was already in the scope. If the original quote said "install new vanity including plumbing connections," a change order for "plumbing connections" is double charging.

• The cause is the contractor's mistake. Rework to fix the contractor's own error is not normally your extra cost. NSW says so directly.

• The change was foreseeable. Western Australia's Consumer Protection guidance for businesses says costs a skilled tradesperson would normally have included in the quote should not be passed on as extras.

• There's no price. "Additional work as required, cost TBD" is not a change order. It is an open check.

• It arrives after the work is done. Unless the change was an emergency, such as a burst pipe, you should see the price before the work.

Your own change requests

You will probably ask for changes too. Make them cheaper and cleaner:

• Put the request in writing, even a short email, and ask for a priced change order back.

• Ask whether the change affects other parts of the job, such as electrical or permits.

• Ask whether the change cancels any work you already paid for, and whether you get a credit.

• Do not tell workers on site to "just go ahead." They may not have authority to price it.

Keeping track

Keep a running log with the change order number, date, description, amount and new total. Check it against each invoice. If an invoice total does not match the original price plus signed change orders, ask for a line-by-line reconciliation before you pay.

A contract that sets out how changes will be handled helps a lot. If you have not signed yet, see what a contractor quote should include and look for a clause on change orders.

If you disagree with a change order

1. Do not sign it until you understand it. Ask for the calculation and any supplier invoices.

2. Compare the unit prices with your original quote and, if useful, another contractor's price.

3. Put your concerns in writing and keep copies.

4. If you cannot agree, contact your local consumer protection or building regulator. In the US, that is often your state AG's office or the state contractor licensing board.

Get a second pair of eyes on your change orders

EasyToDecode is launching soon. Upload your contract and change orders, and it will quote the lines that show what was in the original scope, flag change orders that repeat included work or lack a price, and draft questions for your contractor. See how it works or join the waitlist.