VIDEO: Changes to Scope of Work

In any project, whether it is a large residential development or a small residential renovation, there are often changes to the scope of work that take place over the course of the project. In a large project a municipality might require changes in order to issue approval, or a problem, such as inconveniently located bedrock, might become apparent that needs to be overcome in order to continue with construction. On a smaller project, gutting some walls might reveal shoddy work from a previous renovation, or water ingress or mould that should be remedied while the wall is open. In all of these hypotheticals, if the contractor did not include this work in their original quote and scope of work, then a change to the scope of work becomes necessary.

 

When there is a change to the scope of work, it can be problematic, because the work is already underway and suddenly there is the need to deal with the uncertainty created by the change in scope. The contractor will want to ensure that they are fairly paid for the additional work required by the change in scope. The owner or client will want to ensure that the contractor does not take advantage of the situation and bill an overly large amount for the additional work. It may be a delicate situation for both parties. The homeowner might feel like they are held hostage because their house is hallway ripped apart and they don’t want to get into a dispute with their contractor and delay the completion of their home. The contractor may have invested time and money into the project and might fear that getting into a dispute over a change to the scope of work will prevent or delay payment for the work already completed.

 

In large construction contracts, there is generally an independent consultant who acts as an intermediary when changes to the scope of work are needed. When the need for a change becomes apparent, a formal written change order will be issued to the contractor, the contractor will formally quote the change, and provide the quote to the consultant, who determines whether the quote is reasonable and in theory protects the interests of both parties. There may even be provisions for arbitration if one party does not agree with the consultant’s decision on a large change order.

 

For homeowners, it is cost prohibitive to have an independent consultant, and the pace of change on a residential project can be rapid, especially if the project is a residential renovation where things might be uncovered during the initial demolition phase. While there is no independent consultant on a smaller project, the parties themselves can still help avoid problems by clearly communicating. If the homeowner wants a change, that should be clearly specified and described. If the contractor thinks they are being asked to do something that was not included in the original scope of work, then they should deal with that issue immediately instead of putting it off until the final bill. Where both parties agree that something is an addition to the scope of work, the contractor should prepare a written quote for that addition – this is fair to both parties, the contractor is entitled to be paid for the extra work, and the homeowner is entitled to know what their requested change is going to cost.

 

While ultimately homeowners and residential contractors cannot implement the extensive procedures that are used on larger jobs, the same principles apply. The scope of work has to be clearly defined at the outset, for the benefit of both parties. Changes to the scope of work need to be clearly defined, and ideally agreed upon in writing through a written change order that defines the addition to the scope of work, and the compensation payable for completing that addition. Following these strategies should help both homeowners and contractors avoid disputes regarding the scope of work on a project. If the worst happens, and such a dispute does arise, it may be time to consult with construction litigation counsel. Velletta & Company is pleased to assist clients facing a construction litigation dispute, whether they are homeowners or contractors.

 

Cadeyrn Christie is a civil litigation lawyer and business lawyer with Velletta & Company. A former tradesperson, business owner, and high performance athlete, Cadeyrn focuses his practice on providing dynamic representation to individuals and businesses.Since joining Velletta & Company, Cadeyrn Christie has helped clients achieve cost effective legal solutions in a wide variety of contentious matters, including business disputes, debt collections, personal injury litigation, real estate disputes, and construction litigation. Contact Cadeyrn Christie