What should I look for in a renovation contractor’s change-order records?
Look for signed change orders on every job where the scope moved, with the reason, price and date. Missing or after-the-fact paperwork usually means unpaid extra work or disputes later. Consistent, signed records show a contractor who protects both the client and the company.
Pick several completed and current jobs and ask for the original contract, then every change order that followed. Compare the original price with the final bill. Check whether each change was agreed in writing before the work happened, who signed it, and whether the price included a fair allowance for time and overhead.
Next, look for patterns. Do certain clients or project types generate many changes? Are changes frequently disputed or paid late? A company whose jobs end in arguments over extras may be underpricing at the start. Ask how the owner explains changes to clients and who on staff writes them up. A process that lives only in the owner’s head is hard to hand over.
Finally, ask your lawyer to read a few sample contracts and the change clauses. Ask your accountant whether extra work was billed and collected properly. If a trade association has a standard form the company uses, ask about it. After closing, you will want a clear routine that your site leads follow every time the scope shifts. Pay attention to any job where the final bill is far above the first quote and no change orders exist. That gap needs a clear explanation before you go further.
Key takeaways
- Compare original contracts, change orders and final bills on several jobs.
- Check that changes were signed before the work was done.
- Ask who writes up changes and whether the routine is written down.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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