Variations

Introduction

You are three months into construction and decide to make several apparently small changes. Then the variation arrives. The additional cost is more than expected and the completion date may move. Variations are normal in residential construction, but poorly understood or poorly documented variations are one of the easiest ways to lose control of the budget. A later guide revisits variations in more detail - including how they interact with your construction finance and lender approvals - and can be read together with this guide. A separate guide also examines builder-initiated variations.

What is a variation?

A variation is a change to the work originally agreed. It can add work, omit work, change materials, dimensions, selections or construction methods. It may be requested by the homeowner, proposed by the builder, required by an authority or arise from unexpected site conditions.

The three things every variation can change

Scope — what the builder must provide.

Price — the amount added or credited.

Time — the effect on sequencing, procurement and completion.

Why small changes can cost more than expected

Construction cost is not always proportional to the physical size of the change. Timing matters. A decision made on paper may become much more expensive after materials are ordered or work is installed.

Owner-requested variations

Before giving an instruction, follow the contractual variation process. Identify exactly what is changing, the adjustment to price, any margin and any effect on time. Avoid instructing subcontractors directly.

Builder-initiated or necessary variations

Not every change begins with the homeowner. Whether the homeowner bears the cost of a necessary change depends on why it is required and what the contract says about that risk.

Written records matter

Do not treat a variation as an informal site conversation. A written variation creates a record of what changed, why it changed and what the parties agreed about cost and time.

What should a variation document tell you?

The original work being changed.

The revised work.

The price adjustment.

Any margin or fee.

The effect on time.

Changes to plans or specifications.

Who requested the change.

Evidence of approval.

Variations and time

Ask about time when you ask about price. A product change can have a long lead time or disrupt trade sequencing.

The variation budget

Keep a variation register showing the variation number, description, amount, date approved and cumulative effect on the contract sum.

Questions to ask before signing

Who may request or approve a variation?

Must it be in writing?

How is additional work priced?

What margin applies?

How are credits valued?

How is the effect on completion time documented?

When does the variation become payable?

The key lesson

The problem with variations is rarely that they exist. The problem is losing visibility of what has changed. Before signing, find the variation clause and make sure you can explain how it works.

Before You Sign

This guide provides general educational information for South Australian homeowners. It is not personalised legal advice. The effect of any issue depends on the wording of your own contract, schedules, Special Conditions, plans, specifications and the facts of the project. A good builder and a well-understood contract should work together. Before committing to one of the largest financial transactions you may ever undertake, consider having the actual contract reviewed so you understand the obligations, notice requirements and consequences before they are tested on site.

Before You Build. One Signature. One Chance.