Change orders are common documents used in construction businesses. A change order is created when a customer changes his mind during the construction process. In order to make the change, the contractor typically requires the customer to sign a change order and generally the customer must pay a fee. The rules and procedures of how change orders work should be outlined in the construction contract between the contractor and the customer.
Review the construction contract. Before a contractor creates a change order, he must be certain he follows the written procedures stated in the agreement. A change order specifies that the customer wants a certain aspect of the project done differently. This usually results in purchasing different materials and the contractor performing different services.
Determine the need for a change order. When a customer asks for something to be changed, determine if the issue can be changed or if it is too late. You must also determine if the change requires a change order form. There may be some activities that are too insignificant where a change order form might not be necessary.
Date the form. Create a change order on a word processing program or spreadsheet program. Title the document as a change order and place the date the request is made.
Include the job information. State the customer’s name on the form as well as his contact information and the title and location of the job.
Describe the change. In detail, describe what change is being made. Include the type of work that is required to complete the change as well as the materials needed. Describe any information you need to remember to do as well, such as canceling the order you already placed for siding, for example.
State the costs of the change. Contractors generally charge a fee simply for changing something, but in addition to that, the difference in costs is charged to the customer. For example, if the customer changes his mind about siding and the new siding costs $1,000 more, then the customer must pay the contractor this additional amount.
Get signatures. You must sign and date the document as well as the customer. This document is placed in the customer’s file and serves as a legal document.
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