For illustration purposes only.

How to tell if there are Variations

Variations include changes to, or deviations from, the Plans and Specifications.

These may include changes to the:

  • Design
  • Materials
  • Quantities
  • Quality
  • Work sequence

In NSW, the most common Variations that occurred during home building in 2021 are, in order of frequency:

  • Additional Materials and Installations
  • Additional Work to Comply with Government Regulations
  • Change in Price of Materials
  • Omissions from the Scope of Works
  • Additional Certification and Design
  • Changes to the Plans
  • Additional Insurance
  • Additions to the Scope of Works
Types of Construction Variations

Are Variations always a bad thing?

No. Variations are not inherently bad. Variations may be perfectly acceptable, provided that both parties agree on the change, and follow the procedure for making proper Variations. In fact, even the home owner may request for Variations even after the contract has been signed.
contract variations
For illustration purposes only.

How Variations may be properly made

The procedure for requesting for Variations is laid out in Clause 13 of your Fair Trading contract.
Fair trading building contract variations
For illustration purposes only.

If your Builder or Contractor wants to deviate from the original plans and implement Variations, they need to send you a written notice containing the description of the work and the price.

The Variations will only be considered accepted if you both sign and date the notice.

When do Variations become a problem?

Sometimes, the Builder goes ahead and implements changes without first having notified the home owner, thus surprising the home owner with a shocking price increase on the invoice.

Majority of the time, the parties reach a deadlock because one of them refuses to sign into the proposed Variations, or one party needs time to seek advice on whether they should agree to the proposed Variations or not.

Fair trading contract variations dispute

What to do when Variations ripen into dispute

If Variations turn into a problem, you may refer to the Dispute Resolution clause in your contract, which lays out the steps you should take to resolve the issue.

This normally involves, as a first step, negotiating with the Builder or Contractor and trying to settle the dispute internally. Then, referral to mediation may be had, if the issue remains unresolved.

Fair trading contract building dispute resolution clause
For illustration purposes only.

If the Variations issue persists

Further recourse may be had with the Office of Fair Trading, where the parties may be instructed to undergo ADR (Alternative Dispute Resolution). If the issue still remains unresolved at the Fair Trading level, the aggrieved party may lodge a complaint with the NSW Civil and Administrative Tribunal (NCAT) where the matter will undergo directions hearings. Finally, if the dispute still remains, or if the tribunal’s decision is unsatisfactory, a final recourse may be sought with the courts.

How we can help

Contracts Specialist is a small law firm whose expertise lies in Construction Law. If you are in the middle of a building dispute, or would like to be advised on how to avoid a dispute before it escalates, feel free to call us so we can help you make an informed decision on your best course of action. First consult is free.