How to Properly Dispute a Change Order
- A change order not properly handled can derail any construction project
- Check the change order clause in your contract
- Timely attend to issues relating to change orders
- Document whatever is agreed on
Say you are the owner of a construction project and are presented with a change order for work you thought was within the scope of the project. Maybe the contractor did some work based on an email or passing conversation you had and you are thinking it’s part of the price. But then, a week or a month later, the contractor submits a bill to you. What do you do?
How to deal with a change order so that you don’t have to worry about a lien or litigation associated with your contractor
Check what your contract says about change orders
Look at your contract. Hopefully, you have a written agreement with the contractor and ideally, it has been reviewed by a construction attorney to protect you from situations like this. Irrespective of how the contract came to be, look at it and see what it says about change orders. Check the process the contract states must be followed in order for the contractor to submit a change order. Is there a time limit for them to do so before doing the work? Do they have to obtain something from you in writing before they do the work? Standard AIA style contracts typically provide for notice to you prior to work being done as well as stating that if your contractor performs change order work without your permission, they will not be entitled to payment.
Timely deal with the issue and the contractor on time
How do you deal with the contractor when presented with a change order? You need to contact the contractor on the phone or in writing, via email or text and address the issue and express your position on that change order. Many times in legal cases, the failure to timely object to something will be deemed as your agreement or acquiescence to the issue. Say your contractor presents a change order and has done the work to which you never objected. Fast forward six months and now you want to object when the job is done. If this issue was litigated, many courts will find that because you didn’t timely object you will be deemed to have agreed. So, when the issue first comes to the forefront, you need to make sure that you object in writing to the contractor.
Make sure that whatever agreement you come to is documented
Finally, once you reviewed your contract and you have stated your position to the contractor, you need to come to a conclusion on the issue. For instance, if the contractor submitted a change order for $5,000 and you think it should only be $3,000 but after negotiating, you come to an agreement with the contractor, that you will pay $4,000, document that new agreement.