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PennsylvaniaChange Orders

Hi thanx 4 the info. Living the nightmare not the dream here. While thankfully bad debt has been very limited ever since we were scammed out of $22,000 in 2014 on a commercial-job in Somerset County, NJ, its the 'extras' that homeowners request that is the true evil hidden cost. For us, those 'little extras' have cost us over $250,000 in total labor & materials over the last 10+ years, and that included all 'little extras' that were paid for as agreed. To put that amount in per perspective, we have NEVER been anywhere close to six-figures in revenue in ANY year, EVER. So wanted 2 give u a heads up on a scary, hidden cost that can cause financial-ruin for a business / family and is even less understood than bad-debt. Thanx for sharing your info and data. Thankfully overall we only have to write off $1K to $3K a year from homeowners who scam us, so almost all ARE good about paying. The real issue is 'little extras' that u want 2 b a nice and good person and be agreeable and helpful, but in the end up costing you MORE than 50% of ALL your net-profits in any year. Trust me it adds up very quickly, and YES we have EVERY project file accounted for to the exact dollar going back a decade plus. So definetly warn all other contractors to avoid this trap, cuz it adds up to the difference of being able to retire one day, or literally having to work until the day u die. Signed, Still hopeful but running out of time, don't let this happen to other contractors.

1 reply

Apr 15, 2020
Change orders can be a truly dangerous game when customers refuse to pay them. But, the best way to combat potential issues is to account for change orders in your contract, then to get written and signed change orders throughout the life of the job. It feels like overkill at times, but as you know all too well: If the agreement isn't put to writing, the customer often comes back and refuses to pay for it. What's more, when change orders are properly accounted for, those changes become a part of the contract itself. So, payment claims like mechanics liens, breach of contract claims, and claims under Pennsylvania's prompt payment laws could all be on the table for unpaid change orders. Obviously, no one should have to fight tooth and nail just to be paid what they've earned, but it helps that there are tools to get paid. Finally, you may have already read this article, but it's got some great info on processing change orders: Change Order Form — Free Template Download and Best Practices. And, feel free to come back and post any specific change order or construction payment questions you may have going forward!
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