Are you planning a construction project in Georgia, or are you currently dealing with unexpected changes during one?
Whether you’re building a custom home or renovating commercial space, change orders can quickly drain your budget and lead to legal headaches.
While modifications are a common part of construction, they’re among Georgia’s most significant sources of disputes between property owners and contractors. Many owners don’t realize that a simple verbal agreement to modify work can later result in thousands of dollars in unexpected costs or even a lawsuit.
Understanding how to handle change orders properly can save you significant time, money, and stress.
Understanding Change Orders
A change order is a formal amendment (or addition) to a construction contract that documents the project’s scope, cost, and timeline. Once signed by all parties, it becomes legally binding and part of the original contract.
Change orders serve several crucial purposes:
- They create a clear record of any changes from the original plan
- They protect owners from paying for unintended work
- They give contractors documented entitlement to additional payment or time
- They maintain the legal framework of the original contract while allowing flexibility
Without properly executing change orders, you risk disputes over what both parties agreed upon, who should pay for extra work, and whether delays were justified.
Georgia courts generally enforce written change order requirements strictly, meaning you could have significant difficulties getting legal recourse if you don’t follow the proper procedures.
Common Causes of Change Orders
Understanding what typically leads to change orders can help you anticipate and plan for them. Common causes include:
- Design modifications: When owners request changes to the original plan or specification (like upgrading finishes or altering a layout)
- Unforeseen site conditions: Discovering unexpected obstacles during construction, such as unstable soil, hidden utilities, or hazardous materials
- Regulatory compliance issues: Changes in building codes or permit requirements that require design adjustments
- Errors in original plans: Mistakes or omissions in the initial contract documents that require correction
Each of these situations requires a formal change order to ensure all parties are on the same page about the work to be performed and any adjustments to cost or schedule.
Legal Requirements for Change Orders in Georgia
In Georgia, the enforceability of change orders depends on specific legal and contractual requirements.
- Written documentation and signatures: Many construction contracts require change orders to be in writing and signed by all relevant parties. Georgia courts generally uphold these requirements and may deny claims for extra work that you didn’t properly document.
- Notice requirements: Contracts often include procedural deadlines for notifying the other party about conditions requiring changes. Failure to provide timely notice can jeopardize your rights, even if the work was outside the original scope.
- Oral changes: While your contract may state that oral modifications aren’t valid, Georgia courts have recognized that under some circumstances, a contract can be modified by the parties’ conduct or oral agreement—even with a “no oral changes” clause. (That said, relying on verbal agreements is risky.)
To legally protect yourself, ensure that change orders are in writing, properly signed, and follow all contractual procedures.
Risks of Poorly Managed Change Orders
When you don’t handle change orders correctly, they can create significant problems:
- Derailing your budget: If not carefully tracked, multiple changes or significant scope additions can quickly exceed your original budget.
- Delaying your project: Changes often disrupt the construction schedule, potentially pushing completion dates far beyond initial projections.
- Disagreements on scope: Disputes frequently arise over whether particular work falls within the original contract scope or constitutes a change deserving additional compensation.
- Disputes about payment: If change orders aren’t properly documented or approved, contractors risk not getting paid for extra work, while owners face unexpected bills for work they didn’t formally authorize.
- Straining your working relationship: Friction over changes can strain relationships among all project participants, potentially affecting quality and cooperation.
Many construction lawsuits in Atlanta revolve around change orders, whether a party failed to follow the process, whether the work was genuinely extra, or what the proper compensation should be. Prevention is almost always less costly than litigation.
Best Practices to Avoid Change Order Disputes
Follow these best practices to minimize change order issues:
- Establish clear procedures in your contract: Ensure you include a comprehensive changes clause that spells out exactly how you will handle changes—who can approve them, how you must document them, and methods for pricing them.
- Document in writing: Develop or use a standard change order form for your project and require it for every change, no matter how small. All change orders should be sequentially numbered and logged.
- Communicate early and often: As soon as you identify a potential change, discuss it with all relevant parties. Include a segment in your regular project meetings to review pending change orders.
- Follow contractual requirements: Adhere strictly to the notice and approval processes outlined in your contract. For instance, if your contract requires you to sign a change order before beginning work, ensure that happens.
- Evaluate impacts thoroughly: Before approving any change, carefully analyze its impact on cost and schedule. Consider the direct cost and how it might affect other aspects of the project.
- Don’t start work without approval: Never begin changed work until the change order is formally approved and signed (unless it’s a genuine emergency).
- Track all changes: Keep a record of all change orders, including their impact on the cost and schedule. This record helps prevent surprises and keep the project on track.
These practices can turn potential crises into more manageable events that don’t derail your project or budget.
When You Need Legal Help with Change Orders
Despite your best efforts, change order disputes can still require legal intervention. You might need an attorney if:
- You’re facing claims for work that wasn’t correctly authorized
- The contractor demands payment for alleged “extra work.”
- You need to evaluate whether the requested changes are genuinely outside the contract scope
- You need to draft or review the change order language in your contract before signing
At Thrift McLemore, our Georgia construction and real estate attorneys have extensive experience helping clients navigate change order disputes, including those involving homeowners’ associations and condominium projects.
We can review your contracts before signing to ensure proper protections are in place and help resolve disputes that have already arisen.
Our team of Georgia real estate attorneys focuses on practical solutions that protect your interests while keeping your project moving forward. We understand that time is money in construction, and we work efficiently to resolve issues without unnecessary delays.
If you’re dealing with a Georgia change order issue or want to ensure your Georgia construction contract properly addresses change orders, call us at (678) 882-0830 to schedule a consultation.
