7.3 Change Orders, Completion, and Warranties

Change Orders and Extras

A change order is a written amendment to the contract that modifies the scope, the price, the schedule, or any combination of the three. Maryland consumer guidance under the Home Improvement Law is blunt about it: amendments and change orders for additional or different work must be in writing and signed by both the homeowner and the contractor.

Proper execution has a sequence, and the exam tests it. Before the extra work is performed:

1. Describe the changed work specifically — what is added, deleted, or substituted.
2. Price it — state the cost adjustment, whether an increase or a credit, and how it was calculated.
3. State the schedule impact — days added or subtracted from the substantial-completion date the original contract promised.
4. Get both signatures — the homeowner's and the contractor's.

Only then do the work. A contractor who performs extras on a handshake is betting on quantum meruit — an equitable claim for the reasonable value of the work — which is an uphill, lawyer-intensive fallback, not a business plan. The homeowner can argue the item was included in the original scope, and without a writing the dispute becomes a credibility contest.

Concealed conditions — rotted sill plates, knob-and-tube wiring, unmarked footings — are the classic source of change orders. The professional habit is immediate written notice, a firm price for the corrective work, and a signature before proceeding, with photos of the condition before it is covered up.

Worked change-order example: During a $40,000 basement finish with a stated substantial-completion date of June 1, the homeowner asks to add four recessed lights and a wet-bar rough-in. The change order reads: add the described electrical and plumbing work, plus $2,850 to the contract price (new total $42,850), plus three working days (new substantial-completion date June 4), signed by both parties before the electrician starts. That one page is what separates a paid extra from a lawsuit.

Substantial Completion, Punch Lists, and Final Completion

Substantial completion is the point at which the work is sufficiently complete that the owner can use it for its intended purpose — the kitchen cooks, the addition is weathertight and habitable — even though minor items remain. The term matters twice on the exam: first, §8-501 requires the contract to state the approximate date of substantial completion, and second, substantial completion is the milestone that typically starts express warranty clocks and triggers the major payment.

At the walk-through, the parties compile a punch list: an itemized, written list of remaining and corrective items — paint touch-ups, a missing escutcheon, a door that rubs. Smart contractors walk the job with the homeowner, write every item down, and have both parties sign the list. Final completion arrives when the punch list is cleared; final payment then follows, commonly with lien releases exchanged. Many owners hold back a final payment — often around ten percent — as retainage until the punch list is cleared; the contract should say so. Holding a reasonable final payment until the punch list is done is the owner's leverage; clearing it promptly is the contractor's path to closing the file.

Warranties, Callbacks, and Documentation

Express warranty periods are whatever the contract promises — one year on workmanship, two years, ten on a roof system — and they typically begin at substantial completion. Callbacks are warranty-service requests, and the best practice is a written callback log: date reported, date inspected, the remedy performed, and the homeowner's sign-off. A log turns "you never fixed it" into a documented sequence.

The implied duty of workmanlike performance persists regardless of any stated warranty period — the Guaranty Fund's standard is work that is not "unworkmanlike, inadequate, or incomplete." On timing, two clocks matter: Maryland's general statute of limitations for civil actions is three years, and a claim against the Guaranty Fund must be brought within three years after the claimant discovered, or by ordinary diligence should have discovered, the loss or damage. Expiration of a one-year express warranty does not erase liability for genuinely unworkmanlike performance discovered later.

Documentation Habits That Win Disputes

MHIC's own claim process tells you exactly which records decide cases. A homeowner filing a Guaranty Fund claim must submit the original contract and supporting documents — change orders, cancelled checks, photographs, and two or three repair estimates from licensed contractors detailing the cost to correct the work. The Commission's FAQ is explicit: the documentation lets the investigator validate the claim, and claims that cannot be validated are dismissed without a hearing.

The contractor's mirror-image file should contain:

• The signed contract and every signed change order
• Payment records and invoices, keyed to the payment schedule
• Dated photographs — before, during (especially concealed conditions), and after
• Written selections and approvals for allowance items, with dates
• A daily log of work performed, weather, and visitors
• The signed punch list and callback log

The party with the better paper trail usually wins. In exam scenarios, the correct answer is almost always the choice that puts the agreement in writing, signed by both parties, before the work or payment happens.