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.
Montgomery Maryland Compensation for Change Orders and Builder Allowance Underage: In Montgomery, Maryland, compensation for change orders and builder allowances is an essential aspect of construction projects. Change orders refer to modifications made to the original construction plans, while builder allowances pertain to predetermined amounts allocated for specific items within the project. Understanding the various types of compensation for change orders and builder allowances is crucial for homeowners, contractors, and builders alike to ensure a smooth construction process. 1. Change Order Compensation in Montgomery, Maryland: Change orders may arise due to unforeseen circumstances, design modifications, or additional requests made by homeowners during the construction phase. Montgomery, Maryland offers different types of change order compensation to address these alterations: a. Fixed Change Order Compensation: Under this type, a predetermined dollar amount is set, which covers any change order within that limit. The homeowner and builder agree upon this compensation up-front, ensuring transparency and clarity regarding the cost of potential alterations. It prevents unexpected financial surprises for both parties. b. Time and Material Change Order Compensation: In some cases, change orders cannot be defined accurately beforehand, making it difficult to set a fixed compensation. This type of change order compensation is based on the time spent and materials used for the alteration. The homeowner is usually billed at an agreed-upon hourly rate, while the cost of materials is added separately. c. Percentage-Based Change Order Compensation: Another method of compensating change orders is based on a percentage of the original contract price. For example, both parties may agree upon a 5% compensation for any change orders that arise during the construction process. This approach is commonly used when the scope and extent of potential modifications are unpredictable. 2. Builder Allowance Underage in Montgomery, Maryland: When constructing a new home in Montgomery, Maryland, builder allowances are often provided to account for specific items or selections that homeowners will make. These allowances ensure adequate budgeting and prevent cost overruns during the construction phase. Montgomery offers different types of builder allowances, such as: a. Fixture Allowance: This allowance is specifically designated for fixtures like lighting, plumbing fixtures, and hardware. Homeowners can select items within the predetermined allowance amount, allowing customization while staying within budget. b. Flooring Allowance: Builder allowances for flooring cover the cost of materials and installation. Homeowners can choose from a range of options within the allowance amount, including hardwood, carpet, tile, or laminate flooring. c. Appliance Allowance: To cater to homeowners' preferences, builder allowances for appliances are granted. This compensation allows homeowners to select appliances such as refrigerators, stoves, dishwashers, and more, up to the designated allowance amount. d. Countertop Allowance: Builder allowances may also include specific amounts allocated for countertops. Homeowners can choose from various materials like granite, quartz, or laminate, ensuring their preferences are met while working within the allowance limit. Ultimately, understanding the different types of Montgomery, Maryland compensation for change orders and builder allowances ensures that construction projects run smoothly, with clear guidelines regarding alterations and budgeting.
