You found hidden damage. Now what?

Stop, photograph it, show the client, and get a written decision on the fix and its price before you go on. Hidden damage is nobody's fault, which is exactly why it turns into an argument when it's handled loosely.

From the homeowner's side it looks like this: the contractor opens a wall, says it's worse than expected, and a charge appears for damage the homeowner never saw. Homeowners ask about this often, and some suspect the damage was invented. From the contractor's side, a roofer found rotted fascia on a job and wanted a change order to replace it. The general contractor wanted it wrapped over instead. Two professionals, one piece of rotten wood, and two very different bills.

What to do when you find it

1. Stop work on that part. Keep going elsewhere if you can.
2. Photograph it the moment you find it, wide enough to show where it is and close enough to see the damage. Before you fix anything.
3. Show the client in person or by photo the same day. The sooner they see it, the less it looks like a surprise you saved for the invoice.
4. Give them the options with prices. Repair it properly, patch it, or leave it, and what each one means.
5. Get the decision in writing. If they pick the cheaper option or decline, have them sign that they were told. One electrician whose client declined a $75 fix for open splices wanted exactly that, so the next person in the attic wouldn't blame him.

Put it in the contract before you start

A short clause saves the conversation: conditions nobody could see before work started are priced as a change, shown to the client with photos, and agreed before the extra work. Clients accept it much more easily when they read it at signing than when they hear it with the wall open. Some contractors also add a small contingency line so the first surprise doesn't need new money. See the contract checklist.

The change itself is an ordinary change order: what changes, the price, the days, and both sides' yes.

This is general information, not legal advice. States differ on what a home improvement contract and its changes must contain. Check with your state’s contractor licensing board or an attorney.