Manage changes and payments
Use a written contract that defines scope, timing, payment milestones, change orders, warranty terms, and responsibility for permits and site protection. Verify insurance and relevant licensing requirements. Have transaction-specific contract and lien issues reviewed locally.
Pay according to agreed progress and documented work. Track materials, inspections, and unresolved items. Avoid paying ahead of work simply because the contractor asks. Equally, honor legitimate milestones promptly so the project can continue.
Every change order should show the cost and schedule effect before approval, except genuine emergencies handled under the agreement. Keep a running forecast: paid to date, committed work, approved changes, remaining budget, and expected completion.
A $2,000 bathroom change also adds a week to the schedule. If carrying costs are $500/week, the decision affects the project by $2,500 before other consequences.
Decision checklist
- Tie payment milestones to documented progress.
- Approve change cost and schedule effects in writing.
- Review paid, committed, and remaining costs every week.
Check your understanding
What does a change order affect besides cost?
Show the answer
Timing, work sequence, financing/holding costs, and potentially the exit.
Your next action
Create a change-order log and milestone checklist. Reconcile your budget weekly.
Original teaching framework and hypothetical example. Source directory and editorial approach →