The Written Requirement In Construction Change Orders
Change can be difficult. This can be especially true in residential construction where projects can veer off course when a contractor encounters an unforeseen obstacle that may cut into his profit margin, or when an owner requests an oral change and later refuses to pay for the extra work, claiming that it fell within the parameters of the original contract. This type of unfortunate scenario can be extremely difficult to sort out because of the “contractor said, the owner said” nature of the conflict.
What Is A Construction Change Order?
To minimize the occurrence of these complicated conflicts, and to assist in resolving them should they arise, Minnesota in 2007 passed legislation mandating that change orders between a licensee (defined as a residential building contractor, residential remodeler, manufactured home installer, or residential roofer) and a customer for the performance of a licensee’s services must be in writing, and must contain the following:
- A detailed summary of the services to be performed
- A description of the specific materials to be used or a list of standard features to be included
- The total contract price or a description of the basis on which the price will be calculated.
This written requirement applies not only to change orders, but to proposals, estimates, bids, quotations, contracts, and purchase orders. Both the licensee and customer are required to sign and date the change order, and the licensee must provide the customer with a copy of the signed document at the time the document is signed.
It bears noting that the written requirement for change orders only applies to residential construction. Documents in a commercial construction context, typically based on standard American Institute of Architect forms, almost uniformly have detailed provisions addressing change order/constructive directive procedures.
Even with this governing law in place, owners and contractors entering into residential projects should have change order procedures clearly spelled out in a written contract. This will minimize tremendous headaches should a project fall apart. Chad A. Kelsch can create a written contract that will fit your unique needs.
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This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation.