Handling change orders and preventing scope creep without legal complications is a balancing act for contractors and developers. While change orders are a normal part of construction projects, they can sometimes lead to disputes and additional costs. The process is meant to adjust the project as it moves forward, but it can lead to unexpected challenges without careful management. Understanding the legal framework and having clear protocols can significantly affect handling these changes.
Change Leads to Possible Disputes
It’s not uncommon for the initial agreement to be modified in construction projects. These modifications, known as change orders, adjust the original scope of work, whether by adding or removing tasks. Florida law defines a change order as any modification authorized by the property owner that changes the originally agreed-upon labor, services, or materials. While contractors might see change orders as an opportunity to increase project value, they also acknowledge that these can extend the project timeline.
Disputes often arise when there’s disagreement over whether a task is a change order or was included in the initial contract, whether the change was authorized, or if the cost of additional work was agreed upon. Including a ‘construction change directive’ in contracts allows owners to make unilateral order changes. This can sometimes make it hard to predict how changes affect project costs and timelines. A written agreement on extra work, signed by both parties, can also help clarify expectations. Identifying authorized individuals who can approve change orders on behalf of each party is crucial. This approach minimizes confusion and ensures that modifications are documented and agreed upon.
The Critical Path & Extensions
Change orders potentially increase the project’s scope and affect the project’s completion timeline and costs. For a delay to be considered compensable, it must impact the project’s critical path. The critical path is the sequence of stages determining the minimum time needed to complete a project. However, not all delays will extend the project’s completion time. Understanding which delays affect the critical path and could lead to compensable claims. Additionally, change orders can extend the deadline, allowing a contractor to get a lien on the property.
This extension is valid as long as the change order work was agreed upon in good faith and completed within a reasonable timeframe. The court uses the Aronson/Michnal test to determine if work counts as final furnishing, extending the time for filing a claim of lien. This test checks if the work was done in good faith, within a reasonable time, according to the contract, and was necessary for a complete job. The ‘punch list’ work, blending repair, and additional work under a change order illustrate how specific tasks can extend the lien filing period if authorized as change orders. Ensuring that change order work aligns with the contract and is completed promptly protects your ability to secure a lien, highlighting the importance of clear, mutual agreements on project changes.
Solidify Your Project With Florida Construction Law Group
If you’re facing challenges with change orders or scope creep in your construction projects, seeking professional advice is essential. Consulting with an attorney experienced in construction law can help you understand your rights and obligations and ensure that your contracts are structured to manage these issues effectively. Schedule a consultation today to get the guidance you need to navigate these challenges successfully.
