The original contract gets all the attention. The change order is where the money actually moves. A single page, signed in a hurry, can add thousands of dollars and six weeks to a job.
We reviewed 2026 change orders from renovations in several markets and spoke to contractors and owners about what goes wrong. This guide explains what a change order should contain, how to challenge a price, and when to say no.
What a change order is
A change order is a written amendment to the construction contract. It describes work added, removed or delayed, states the price and the schedule effect, and is signed by both parties before the work proceeds. It is not a text message, a verbal agreement or a revised invoice sent after the fact.
Any change that affects cost, scope or time should produce one. That includes a hidden water leak, a upgraded tile, a moved outlet or a delay caused by a late material delivery. If the contractor refuses to put it in writing, that is the first warning sign.
The seven items every change order needs
Look for the date, the contract reference, a clear description of the work, the price with a breakdown, the schedule impact, the payment terms and both signatures. A lump sum without a breakdown is hard to challenge. Ask for labour hours, material quantities and any subcontractor quotes.
The schedule line matters as much as the price. A $600 change that pushes the kitchen two weeks can cost more in temporary housing than the work itself. Require the contractor to state the new substantial completion date, not just "additional time".
Separating a change from a mistake
Some changes are genuine surprises: rotted framing behind a wall, a code requirement discovered during inspection, a discontinued tile. Others are the contractor's own errors or omissions. If the original drawings showed an outlet and the electrician forgot it, correcting that is not a change order. It is a fix.
Read the original scope before you sign anything. If the work was reasonably included, push back in writing and ask for the contract clause the contractor is relying on. A polite email with a photo and a page reference resolves most disputes faster than a phone argument.
How to price added work
Ask for a unit rate where possible: dollars per square foot of tile, per linear foot of pipe, per hour of labour. Unit rates make a change easy to check and hard to inflate. For a large addition, get a second quote from another contractor, even if it delays the decision by two days.
Check the markup on materials. A 10 to 20 percent markup is normal for overhead and handling; 50 percent on a retail item is not. Ask whether the price includes permit fees, disposal and cleanup, because those are common add-ons after the fact.
A change order signed in five minutes can cost five months. Read it at the table, with the original contract open beside it.
Change orders and the payment schedule
Tie each change order to the next draw, not to a separate upfront payment. If the work is added mid-project, the money should be released when the work is complete and inspected, like the rest of the job. Never pay the full change amount before the material arrives.
Keep a change log with a running total. Compare the revised contract sum with the original budget every week. A series of small changes is easy to miss, and the total is what matters. If the log crosses your contingency, stop and re-plan the scope.
Key facts
- Every cost, scope or time change needs a signed order.
- Require a price breakdown and a new completion date.
- Correcting a contractor error is not a change order.
- Unit rates make added work easier to verify.
- Pay for changes at the next draw, after inspection.
When to refuse
Refuse a change order that is backdated, vague or priced without a breakdown. Refuse one that asks for payment before work. Refuse one that shifts responsibility for permits or insurance to you without a clear reason. And refuse any change that would take the project beyond your financing without a written revised budget.
If the contractor stops work over a disputed change, read the dispute clause in the contract before responding. Most contracts require written notice and a chance to cure. Send a factual email, keep paying for undisputed work and do not let the disagreement expand into the whole job.
Set the rules before work starts
The best time to manage change orders is before the first hammer swings. Put the process in the contract: who can authorise a change, what form to use, how long approval takes and how the schedule is adjusted. Agree on a contingency of 10 to 15 percent and decide together what happens when it is used up.
Our contractor payment schedule guide shows how to link draws to milestones. More hiring and management guides are on the Contractor desk.
