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.
Georgia Compensation for Change Orders and Builder Allowance Overages provides a framework for addressing additional costs and expenses that arise during construction projects in Georgia. These compensations aim to maintain fairness and ensure that any changes or allowances requested by the homeowner or the builder are adequately compensated for. In Georgia, there are different types of compensation available for Change Orders and Builder Allowance Overages, including: 1. Change Orders: Change orders refer to modifications or alterations made to the original construction plans or specifications after the initial contract is signed. These changes may arise due to client preferences, unforeseen circumstances, or adjustments required to meet building codes or regulations. In Georgia, compensation for change orders typically involves additional costs incurred due to labor, materials, design modifications, or any other necessary changes. 2. Builder Allowances: Builder allowances are predetermined amounts or limits set by the builder to cover specific items or features of the project. These allowances provide flexibility for homeowners to make their own choices regarding finishes, fixtures, or materials within a predetermined budget. If the homeowner exceeds the allocated builder allowance, compensation for overages is required. 3. Compensation for Change Orders: Compensation for change orders includes the reimbursement for additional expenses incurred by the builder due to change orders requested by the homeowner. Such compensation covers costs associated with increased labor, extended timelines, additional materials, equipment rentals, and any other additional expenses arising from the change. 4. Compensation for Builder Allowance Overages: Compensation for builder allowance overages refers to the reimbursement required when the homeowner exceeds the allocated budget for specific items or features. If the homeowner chooses finishes, fixtures, or materials that exceed the predetermined builder allowance, the builder may request compensation for the difference in cost. The process of determining compensation for change orders and builder allowance overages in Georgia typically involves thorough documentation, including written change orders, detailed cost breakdowns, and mutual agreement between the homeowner and the builder. It is important for both parties to maintain open communication and transparency throughout the process to ensure fair and satisfactory compensation arrangements. By addressing compensation for change orders and builder allowance overages, Georgia aims to promote fairness, avoid project delays, and ensure customer satisfaction in the construction industry.
