Glossary
What is a Construction Allowance?
A construction allowance is a pre-specified dollar amount in a contract for a category of selections. Homeowner selections exceeding the allowance become change orders.
Definition
A construction allowance is a line-item budget in a construction contract for a category of items or work that has not been fully specified yet. When the homeowner selects specific items, their actual cost is compared to the allowance — any overage becomes a change order.
Frequently Asked Questions
Related Glossary Terms
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