Scope of Work Template for Rehabs: The Document That Prevents Change Orders

Introduction

Most rehab overruns are not cost problems. They are specification problems — the scope said "update bathroom" and the contractor priced one thing while the investor imagined another.

TL;DR: A scope of work is a line-item description of exactly what will be done, with materials named and quantities stated, so that three contractors bid on identical work and none of them can call an omission a change order. Vagueness always costs the investor, because the contractor prices the cheapest reading of an ambiguous line.

The structure

Organise room by room, not trade by trade. Contractors walk properties room by room, and so will you when you inspect.

Header block

• Property address
• Prepared by / date
• Target start and completion dates
• Permit responsibility — name who pulls them
• Payment schedule reference

Per-room table

Item	Specification	Qty	Unit	Notes

Fill it as in this example, which is the level of detail that actually works:

Item	Specification	Qty	Unit	Notes
Flooring	LVP, 20 mil wear layer, colour TBD from 3 samples	340	sq ft	Includes underlayment, quarter round
Paint — walls	Sherwin-Williams ProMar 200, eggshell, 1 colour	340	sq ft	2 coats over primed drywall
Paint — trim/doors	Semi-gloss, white	6	doors	Includes casing and baseboard
Outlets/switches	Decora, white, tamper-resistant	14	ea	Replace all covers
Light fixture	Flush mount LED, 14in, contractor grade	1	ea	Allowance $65

Compare that with "paint bedroom, new floors" and it is obvious which one produces three comparable bids.

The four sections people skip

Allowances. Where you have not chosen a finish, state a dollar allowance per unit — "light fixture allowance $65 each". The contractor prices labour against a known material budget, and choosing a $200 fixture later becomes a transparent $135 adjustment rather than an argument.

Exclusions. Say explicitly what is not included. Appliances, window coverings, landscaping, final clean, permit fees, dumpster. Every unstated item is a change order waiting to be written.

Unknowns and contingency. Name the things that cannot be priced until something is opened up — sewer lateral, subfloor under the tub, panel capacity, anything behind a wall in a pre-1980 building. Then hold 10–15% contingency against them. A scope claiming no unknowns on an old property is a scope written by someone who has not opened a wall.

Permit responsibility. Who pulls, who pays, who waits for inspection. This single line resolves the most common two-week delay in residential rehab.

The payment schedule

Never pay ahead of completed work. A defensible structure:

Draw	Trigger	%
1	Mobilisation and material deposit	10
2	Rough-in complete, passed inspection	25
3	Drywall and paint complete	25
4	Finishes, fixtures, flooring complete	25
5	Punch list complete, final inspection, lien waivers received	15

Two rules make it work: every draw requires your inspection first, and the final draw is large enough that the contractor wants it. A 5% retainer does not motivate anyone to return for a punch list; 15% does.

Collect lien waivers with each draw, from subs as well as the general contractor. A paid GC who did not pay their subs leaves the lien on your property.

Getting comparable bids

Send the identical scope to at least three contractors and require line-item pricing against your rows. If a bid arrives as a single number, send it back — you cannot compare it, and you cannot hold anyone to it.

Then read the spread. A bid 40% below the others is usually missing something, and the something is usually in your exclusions list. Ask what they assumed rather than assuming they are cheap.

Price the resulting budget through the rehab cost calculator, and test whether the deal still works at the highest bid rather than the lowest — that is the number you will probably pay. For flips, the 70% rule calculator sets the offer that survives it.

Change order discipline

Every change gets written down before work proceeds: what changed, why, cost, and schedule impact, signed by both parties. Verbal change orders are how a $40,000 rehab becomes $58,000 with no one able to reconstruct why.

If a change order is genuinely caused by a scope omission that was your fault, pay it without argument. If it is caused by a line the contractor bid and now wishes they had bid higher, that is what the fixed-price contract is for.

Conclusion

Specificity is cheap to write and expensive to omit. A scope of work that names materials, states quantities, lists exclusions and ties payment to completed work turns a rehab from a negotiation into an execution. Pair it with the due diligence checklist so nothing is discovered after closing that should have been priced before it.