The Ultimate Guide to Managing Change Orders on Renovation Projects

9/13/2024

Christopher Godfrey

By Christopher Godfrey

If you’ve been in the renovation game for any amount of time, you’ve probably encountered the dreaded change order. Whether it’s a last-minute design adjustment or an unforeseen structural issue, changes are part and parcel of the renovation process. But if not managed correctly, change orders can lead to confusion, delays, cost overruns, and a whole lot of frustration—for both contractors and clients.

In this guide, we’ll break down how to manage change orders effectively and keep your projects running smoothly. We’ll cover the importance of clear communication and documentation, common pitfalls to avoid, and how digitizing your processes can make all the difference.

What Is a Change Order?

A change order is a formal modification to the scope of work outlined in a construction contract. These changes can be driven by several factors, including:

Client requests (e.g., wanting to upgrade materials)

Unforeseen issues (e.g., discovering plumbing problems behind walls)

Design adjustments (e.g., adding new features)

Regulatory requirements (e.g., needing additional permits)

Whatever the reason, the key to handling change orders efficiently is to make sure they are documented clearly, agreed upon by all parties, and promptly communicated to the team on-site.

The Confusion and Frustration of Poorly Managed Change Orders

Let’s face it—change orders are notorious for causing headaches. When change orders are not well-managed, a few common issues tend to arise:

Lack of clarity: If a change order isn’t clearly outlined, it’s easy for contractors to misunderstand the scope or overlook important details.

Delayed approvals: Changes often require approval from the client or other stakeholders, but delays in this process can cause costly project hold-ups.

Budget blowouts: Without clear cost estimates, change orders can balloon a project’s budget, leading to unpleasant surprises down the line.

Communication breakdowns: If the field crew isn’t made aware of the changes in real-time, mistakes can happen, leading to rework and delays.

These issues don’t just affect the contractor—they also frustrate clients who may feel they’re being kept in the dark or that costs are spiraling out of control.

The Importance of Clear Documentation and Communication

So, how do you avoid these common pitfalls? It all boils down to two things: clear documentation and proactive communication.

1. Document Every Change

Every change order—no matter how minor—should be clearly documented. This documentation should include the following:

A description of the change

Updated project plans or blueprints

Cost breakdown and timeline adjustments

Sign-off from both the contractor and the client

Accurate documentation serves two purposes: it keeps everyone on the same page, and it creates a paper trail that can help resolve disputes down the line. Without a formal process in place, verbal agreements or vague instructions can lead to misunderstandings and, ultimately, project delays.

2. Communicate in Real-Time

Changes need to be communicated to everyone on the team, from project managers to field workers. A delay in communication often means someone will continue working according to the old plan, which could lead to costly rework or mistakes. This is where centralizing your communication and documentation in one place can significantly reduce the risk of errors.

How Digitizing Change Orders Can Help

The traditional approach to managing change orders—emails, phone calls, and paper documents—is simply too slow and inefficient for today’s fast-paced renovation projects. Modern construction project management software allows you to digitize this process, providing an all-in-one platform where you can document, track, and communicate changes in real time.

Here’s how a digital platform like Property Vue simplifies the process:

1. Streamlined Documentation

With a centralized platform, every change order is recorded in one place. This means that everyone involved in the project—from the site supervisor to the client—has access to the same information. No more digging through emails or paperwork to find the latest update. Every change is visible, transparent, and easy to track.

2. Real-Time Updates

As soon as a change order is approved, the system automatically notifies the relevant parties. This ensures that the field crew, project managers, and even subcontractors are all working from the same, up-to-date plans. Real-time notifications reduce miscommunication and keep the project moving forward without unnecessary delays.

3. Cost Transparency

Cost management is one of the biggest concerns when it comes to change orders. By integrating your change order system with budgeting tools, you can easily track how each change impacts the overall budget. Property Vue gives you the ability to provide clients with updated cost estimates, which helps avoid unpleasant budget surprises.

4. Approval Tracking

One of the trickiest aspects of managing change orders is keeping track of who has approved what and when. A digital platform allows you to set up a formal approval process with e-signatures and timestamps, ensuring that no change order moves forward without the necessary sign-offs. This reduces the risk of unauthorized changes and gives you an audit trail to protect yourself in case of disputes.

Final Thoughts

Managing change orders doesn’t have to be a source of frustration or confusion. By prioritizing clear documentation and real-time communication, you can keep your renovation projects on track—even when things don’t go according to plan. Digitizing this process with a tool like Property Vue allows you to take control of change orders, reduce errors, and ultimately deliver better results for your clients.

After all, it’s not about avoiding change—it’s about managing it the right way.

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