Change Orders are instructions to revise construction plans after they have been completed. Change orders are common to most projects, and very common with large projects. After the original scope (or contract) is formed, complete with the total price to be paid and the specific work to be completed, a client may decide that the original plans do not best represent his definition for the finished project. Accordingly, the client will suggest an alternate approach.
Common causes for change orders to be created are:
" The project's work was incorrectly estimated;
" The customer or project team discovers obstacles or possible efficiencies that require them to deviate from the original plan;
" The customer or project team are inefficient or incapable of completing their required deliverables within budget, and additional money, time, or resources must be added to the project; and
" During the course of the project, additional features or options are perceived and requested.
Maine Compensation for Change Orders and Builder Allowance Underage: In Maine, compensation for change orders and builder allowance underage refers to the financial arrangements made between contractors, builders, and homeowners when modifications or alterations to the original construction plan are requested by the homeowner during the building process. Change orders are changes requested by the homeowner after the construction contract has been agreed upon. These changes can include anything from adding extra features, altering room layouts, or upgrading materials. In Maine, compensation for change orders is typically negotiated between the homeowner and the contractor. The cost of the change order is commonly determined based on material and labor costs, as well as any additional project management expenses. Builder allowance underage refers to a budget set aside by the builder or contractor for the homeowner to customize certain aspects of the construction project. This could include selecting specific fixtures, appliances, or finishes. The homeowner is usually given options within a predetermined price range, and any costs exceeding this budget will be the responsibility of the homeowner. Builder allowance underage is often included as an incentive for homeowners to choose specific builders or contractors in Maine. Maine provides different types of compensation for change orders and builder allowance underage, including: 1. Fixed Price Adjustment: This type of compensation involves a predetermined fixed cost for each change requested by the homeowner. Both parties agree on the cost before the change is made, ensuring transparency and avoiding surprises. 2. Time and Material Compensation: In this approach, the homeowner compensates the builder based on the actual time and materials required to complete the change order. The homeowner is billed for the labor and materials used, along with any associated administrative costs. 3. Percentage-Based Compensation: Compensation for change orders can also be determined as a percentage of the project's total cost. This method may be suitable for smaller changes or alterations with less impact on the overall project. It is important for both homeowners and builders in Maine to have clear contractual agreements regarding compensation for change orders and builder allowance underage. This ensures that both parties are aware of the financial implications of any modifications to the original construction plan and helps avoid disputes during the building process.
