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.
New Hampshire Compensation for Change Orders and Builder Allowance Underage New Hampshire is known for its strict regulations and guidelines when it comes to compensation for change orders and builder allowances in the construction industry. These regulations aim to protect both the homebuyers and the builders, ensuring a fair and transparent process. First, let's define change orders and builder allowances. Change orders refer to any alterations made to the original construction plans or specifications after the contract has been signed. These changes often arise due to unforeseen circumstances, design changes, or additional client requests. Builder allowances, on the other hand, are predetermined amounts provided by the builder to the homebuyer for specific items or materials, typically mentioned in the contract. In New Hampshire, compensation for change orders and builder allowances is governed by the New Hampshire Home Building and Remodeling Act. This act outlines the rights and responsibilities of both builders and homebuyers, ensuring a fair and equitable resolution in case of any changes or modifications during the construction process. There are several types of compensation for change orders and builder allowances in New Hampshire: 1. Cost-Plus Agreement: This type of compensation involves determining the actual cost of labor, materials, and overhead, and then adding the builder's agreed-upon profit margin. Any change orders or builder allowances are factored into this cost, ensuring that the builder is fairly compensated for additional work or expenses. 2. Fixed Price Agreement: Under this agreement, the builder provides a fixed price for the entire project, including any change orders or builder allowances. The builder takes into account potential modifications and adjustments while quoting the initial price. However, any significant changes may require a separate negotiation between the builder and homebuyer to ensure fair compensation. 3. Time and Material Agreement: In this type of compensation, the builder charges an hourly rate for labor and costs of materials. Change orders and builder allowances are accounted for separately in this agreement, either on an hourly basis or based on a pre-determined formula or percentage. It is essential for both builders and homebuyers to have a comprehensive contract that clearly outlines the compensation terms for change orders and builder allowances. There should be a process in place for documenting and approving any modifications or adjustments, along with clear guidelines on how compensation will be determined. To protect their interests, homebuyers should thoroughly review the contract and seek legal advice if necessary before signing. Builders should adhere to the New Hampshire Home Building and Remodeling Act, ensuring honest and transparent communication with their clients throughout the construction process. In conclusion, New Hampshire compensation for change orders and builder allowances provides a framework to address the need for modifications and adjustments during construction projects. By adhering to the regulations set forth by the New Hampshire Home Building and Remodeling Act, both builders and homebuyers can ensure a fair and satisfactory resolution for any changes encountered during the construction process.
