A change order is a written amendment to an original construction contract that records changes to the project scope, material specifications, or completion dates.
Whether a landlord decides to upgrade cabinets during a kitchen renovation or the contractor discovers hidden structural issues, a change order ensures that both parties agree on the new price and timeline. It prevents misunderstandings and disputes, serving as an addendum to the initial agreement.
How It Applies to Florida Landlords
Construction projects in Florida can be unpredictable. When a contractor encounters a problem, they might propose a change order to account for additional labor or materials. As a landlord, it is vital to never approve changes orally.
A signed change order protects you from 'scope creep'—where costs balloon beyond your budget—and provides a clear paper trail for tax purposes. If the project is funded by a bank loan, the lender may also require signed change orders to approve further draw requests.
Key Takeaways
- Use change orders to document all deviations from the initial project scope.
- Never authorize significant changes verbally; always get a written agreement.
- Change orders protect you from unexpected budget overruns.
- Maintain a file of all change orders for your property's permanent records.