How Change Orders Impact Your Right to Get Paid

While change orders are an essential tool for keeping a project moving, they also introduce significant financial and legal risks. If handled incorrectly, a change order can completely derail your cash flow, cause payment delays, or even strip away your right to get paid entirely.

Here is what you need to know about how change orders impact your payment rights and how to protect your bottom line.

How Change Orders Impact Your Payment Rights

1. Verbal Change Orders Are a Massive Risk

We have all been there: the project manager walks up to you on-site and says, "Hey, we need to add an extra retaining wall here. Just get it done, and we will sort out the paperwork later."

You want to be a team player, so you do the work. But doing extra work based solely on a handshake or a verbal agreement is one of the easiest ways to lose your right to payment.

The Contract Rules

Most construction contracts explicitly state that no changes will be paid for unless they are approved in writing before the work begins.

The Burden of Proof

If you perform the work without written authorization and the general contractor (GC) or owner later refuses to pay, the burden of proof is on you. Without a paper trail, proving that the extra work was authorized is an uphill battle.

The Golden Rule

Never start work on a modification until you have a signed, written change order. If scheduling demands immediate action, at the very least, get the directive in an email or a text message before moving dirt or cutting material.

2. Change Orders Directly Affect Your Lien Rights

Mechanic’s liens and bond claims are your most powerful tools for ensuring payment. However, change orders can muddy the waters when it comes to calculating your claim amounts and tracking strict legal deadlines.

The Problem of Unsigned Change Orders

Can you include the cost of extra work in a mechanic’s lien if the change order was never formally signed?

In many states, you can only file a lien for the agreed contract price plus approved changes.

If you include disputed or unapproved change orders in your lien amount, you risk overstating the lien. In some jurisdictions, an overstated lien can be declared invalid, or worse, penalized as a fraudulent lien.

Changing Deadlines and the Scope of Work

In many states, the clock for filing a mechanic’s lien or serving a preliminary notice starts ticking from your last date of providing labor or materials.

Legitimate Extra Work

If a valid change order extends your time on the job, it generally extends your lien deadline based on that new last day of work.

Punch List vs. Change Order

Be careful not to confuse change orders with minor punch list work or warranty repairs. Performing minor corrective work usually does not extend your lien filing deadlines. A true change order alters the original scope of work; punch list items merely fulfill it.

3. Watch Out for Waiver and Release Traps

One of the most dangerous traps for subcontractors happens during the routine progress payment process.

Every time you submit a pay application, you are usually required to sign a Lien Waiver and Release. Many standard waiver forms contain broad, sweeping language that states you waive all claims for payment up to a certain date.

Example: If you have performed $15,000 worth of extra work under a pending, unsigned change order, and you sign an unconditional progress waiver that releases all claims through the end of the month, you may have just legally wiped out your right to collect that $15,000.

How to Protect Yourself

Before signing any lien waiver, compare it against your pending change orders. If you have outstanding or unapproved change orders, you must explicitly exclude them from the waiver.

Write a note directly on the form specifying that the waiver excludes pending change orders for extra work, or use a conditional waiver that only applies to the specific dollar amount you have actually received.

4. Documentation Is Your Best Friend

If a dispute arises over a change order, the side with the best documentation almost always wins. To protect your right to get paid, treat every change in scope as a mini-contract.

Document the Cause

Take photos and videos of the site conditions that triggered the change.

Track Costs Separately

Do not lump change order labor and materials in with your original contract tracking. Set up a separate cost code so you can prove exactly what resources were spent on the extra work.

Confirm in Writing

If a change is ordered in a meeting, follow up immediately with an email:

"Per our conversation today, we are proceeding with [X work] for an estimated cost of [Y]. Please reply to confirm."

Frequently Asked Questions

Can I Stop Working if a Change Order Is Not Signed?

It depends on your contract. Many construction contracts contain a changes clause that requires you to proceed with the work even if the price of the change order is still disputed, provided you receive a written directive.

Review your contract terms to see if you have the legal right to stop work over an unsigned change order.

What Should I Do if a GC Refuses to Sign a Change Order but Demands the Work?

Do not rely on verbal promises. Send a written confirmation (via email or text) stating that you are performing the work under their direct order and expect compensation.

Keep meticulous records of all labor, hours, and materials used specifically for that task.

Does a Change Order Extend My Preliminary Notice Deadline?

Generally, no. Preliminary notice deadlines are usually based on when you first start providing labor or materials to a project.

A change order later in the project will not change that initial start date, so ensure your preliminary notices are filed early.

Can I File a Lien for a Verbal Change Order?

It is highly risky. While some states allow liens for verbal agreements if you can prove the work was authorized and benefited the property, many states strictly limit lien amounts to written contract agreements.

Including unapproved verbal changes can jeopardize the validity of your entire lien.

Final Thoughts: Protect Your Right to Get Paid

Change orders should not be feared; they are a normal part of the construction ecosystem. However, they must be managed with strict administrative discipline.

To keep your cash flow secure, remember to get changes in writing, align them with your project deadlines, protect your lien rights, and read your lien waivers with a magnifying glass.

Need help managing your preliminary notices, lien waivers, or bond claims? SunRay Notice helps construction professionals secure their payment rights on every project. Contact SunRay Notice today to ensure you get paid for every hour of work you do.