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Remodeling · Sourced answer

What is a change order, and what contingency budget should homeowners set aside for unforeseen issues?

Managing scope creep, price adjustments during demolition, and budgeting for hidden structural/mechanical surprises.

The answer

Change Order (AIA Doc G701): A formal, legally binding written amendment modifying the original scope, cost adjustment (addition or credit), and revised completion schedule. Must be signed before extra work begins. Contingency budget guidelines: Newer homes (post-1990) / standard footprint require 10%–15% contingency. Older homes (pre-1978) or structural renovations require 20%–25% contingency to absorb concealed hazards (subfloor rot, outdated wiring, unvented plumbing, past unpermitted work).

Sources

This answer is drawn from the standards and guidance below. It is general information about how these systems work — not a diagnosis of your property.

  1. AIA Contract Documents G701 Change Order Overview
  2. National Association of the Remodeling Industry (NARI) Budgeting Guide