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
Are Variations always a bad thing?
How Variations may be properly made
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.
Related Content: Managing Variations: Tips for Keeping Your Project on Track
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
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.
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