I don't quite understand how this can happen. Did you have a contract with a fixed price or are you working on a Time and Materials basis? Did you suddenly add or change any specifications?

A change order is something to which both parties must agree. It's not something that the contractor can unilaterally impose, just as you couldn't go to the contractor and suddenly say you're only going to pay 80% of his bill.

Has work started? Did you check this guy's references? What were his reasons for the increase? From what you've described, this would be a classic bait and switch tactic -- but I suspect there's more to it than that. Can you provide some additional details?

Get an attorney. I had a similar experience about 10 years ago and in our state the contractor can place a mechanics lien on your house and then the chips are stacked against you. I must say that any time that I am entering a contract for a lot of money I have an attorney who specializes in contracts look it over and give me advise ask the lending officer that you delt with for any recommendations, they have a stake in this also and may step in for you. The couple of hundred dollars that it costs up front are well worth it if you run into an unethical contractor. Also talk to the attorney about who has final say on the quality of work and materials when the job is done in your current contract, hopefully it is you. There may be steps that you can take to turn this around on the contractor and then again you may be stuck.
The mere fact that you have an attorney may help you deal with the contractor. The other option is to cancel the change orders and force him to do the original job for the origional price. You may be money ahead by having the changes done at a later time.

I'd like to hear the answers to jamesk's questions before I answer.

GLARING PROBLEM!!!!

"When we went to talk to him about problems with the change order (there were several -- like charging us for a tile floor when he wsa installing a linoleum floor), he decreased the amount."

How in the world can he expect to do things like that?

Lawyer time and then new contractor time.

Some of his charges were legitamate. We had asked for certain upgrades months ago, and he kept putting us off with costs. Then he shocked us with it the day they poured concrete in the foundation.

WINDOWS: We asked for Fiberglass windows instead of vinyl. ($3K increase)

KITCHEN: We upgraded cabinets (from a Kraftmaid level 5 to a level 8), and I chose granite from his provider. He indicated that we went over allowance even though I chose from what I was told to choose from and size of kitchen has not changed from date of contract. He had provided an allowance for appliances, but when I tried to get them from the guy he suggested, his guy didn't want to deal with our level of appliances --we're getting a Kenmore range, not Thermador. So he told me to get appliances on my own, and he would credit the $8K allowance. Well, that allowance was sucked up by "other" kitchen expenses, and we still need to purchase appliances on our own. This amounted to a $4K price INCREASE.

FOUNDATION: He upped the total almost $5K for additional foundation digging and porch support beam because of new hurricane requirements (I live in the northern Virginia)

MISC OTHER STUFF: He has wierd stuff we can't figure out, like 150 sqft of drywall for an area less than 60 sqft (when we brought this to his attention, he said that they might need extra. More than twice the amount?); a plumber, electrician, AND a carpenter will be installing our disposal, dishwasher, refrigerator, and range. When I brought this up, he said all these people needed to help with installation. We are being charge EXTRA for installation because we also have a different expense line for the plumber and electrician with allowances (which I guessed would have included stuff like making an outlet for the stove and disposal, etc.).

MORE TO COME: He let us know that the roofer will need to put on more roofing (he priced out roofing for just the addition, but he said last night that he knew the roofer would have to roof over some of the old part of house too). This was NOT included in his 20% increase! He also gave us allowances for electrician and plumber, but he let us know yesterday that they would probably not be enough to cover the actual costs. This amount is is also NOT included in his 20% increase.

I am at a loss. We did not sign the change order last night. When we left and he said something about ordering the cabinets and windows, I told him I would not order anything if I were him.

We checked him out with the Better Business Bureau and he looked like he had a great reputation with national builder organizations. He has won several National Association of the Remodeling Industry (NARI) awards -- I thought we had done our homework.

We have a retired contractor coming to look at the change orders and the blueprints tomorrow. Plus, my dad just passed the bar last year and said he would look over the contract. I just didn't want it to come to this --- ahhhhhh!

Wow, realize that's a tough situation to be in. A few thoughts in semi-random order:

Any price increases- for example your "other" kitchen expenses, have him detail exactly where that's going and what the changes or changed condition (i.e. rotted wood, existing beams undersized, inconvieniently located pipe, whatever) was that caused them. If you disagree on quantities or reasoning or whatever, don't roll over. If the counters are more than the allowance, do a little homework and get proposals yourself to compare against.

One thing that jumps out at me is having allowances for electrician and plumber. That's kind of scary to me, since you're somewhat at his mercy for who he can get and what they charge.

Ideally, you want this to be a bid situation, where your drawings show what's being done, and he's responsible to provide all the trades to put it together.

So, if you add an outlet, sink, whatever, you pay, but you get what's on your drawings (and hopefully in your specs) for the agreed price. Oh, and the likelihood of needing a carpenter at all for appliance install seems low. Again, though, if you were always putting in a fridge/disposal/etc, you shouldn't have to pay extra for the install/outlet/water supply/drain pipe.

On your upgrade charges, that's somewhat in your court. Again, ideally you decide on these before executing your contract, so that you have all the information in hand.

Your foundation changes- check to see when the requirements came into effect. You may not like having an adversarial relationship with your architect, but if it's details they should've included, I'd be looking to them for an explanation.

A conclusion I came to from working in industrial construction holds true: "Contractors work to create a crisis from which only they benefit."

Sounds like your guy is doing this. Bring in your backup, but also realize that (I'm assuming) you really want to get the job done, too. So you may need to be flexible and adjust your expectations (particularly if the pricing was low for the market to start with) in order to move forward.

And the only other advice is to be involved from day to day. Stuff's less likely to surprise you. And as you move forward, demand prompt pricing on changes- i.e. don't agree to move forward until you've agreed on a price, even for little stuff.

Courage- I'm finally seeing the light at the end of the tunnel for our addition/remodel. And I'm happy that our GC isn't around anymore, despite the pain and frustration that's caused over the past few months. It's a long story that I may share sometime.

It sounds to me like you're working on a time and materials basis with quite a few major items in your estimate priced on an "allowance" basis. This sitation almost always leads to cost overruns. Add to that, a big change in the spec for foundation, upgraded windows and cabinetry, and it's not unreasonable to expect some major upward revision in the final cost of a project.

Apparently, your estimate was prepared some months ago, you made some costly changes in the interim, and all the while, the cost of building materials have been going up. Since you apparently don't have a fixed cost contract, all of these factors tend to increase your costs.

Before calling in the lawyers, I suggest you sit down with your contractor and see if you can work out some cost savings in areas where he hasn't already ordered materials, sub-contracted, or committed irrevocably. A good contractor will try to work with you and do what he can to keep a lid on rising costs.

The reality of these things is that absent a fixed price contract, building projects always cost more than expected. This is particularly true when you didn't have a complete specification at the time the estimate was prepared.

Numerous "allowances", months of delay, and changes after the estimate are a sure recipe for some big shocks.

Even with careful planning, as thorough and complete a specification as I could manage, and very few changes, the remodel to my house last year ended up costing about 15% more than the estimate.

Good luck.

James