A variation is an alteration to the contract amount and occurs once a contract has been dated and signed.
A variation will commonly arise from one of the reasons listed below:
- At the request of the owner (client); where the owner has decided to delete, alter or add to the work to be done
- At the request of the builder when the item could not have been reasonably expected or foreseen at the time a contract is signed
- Due to a council requirement that could not have been reasonably foreseen or expected at the time a contract is signed
How to avoid variations during the build?
A builder who acts in the best interest of the client will want to avoid variations as much as possible. Thorough research by the builder during quoting and tendering, will greatly reduce the possibility of variations arising during construction.
Professional builders conduct their research early through the implementation of a Preliminary Building Agreement (PBA) to address any site and design requirements. For a detailed look into PBA’s check out our blog “What is a preliminary building agreement and do you really need one?”
If a builder comes back to you, after contracts have been signed, stating that the building design is non-compliant then they have not done their research and are letting you down before construction has even started.
Professional builders will have procedures in place to assist you in the design and selection processes to minimise the possibility of changes during construction. This could include meetings with draftsmen, colour consultants, interior designers, flooring consultants, kitchen designers, etc.
Be sure to choose a builder whose process allows you to make your selections prior to signing a contract.
This is a true fixed price contract.
Some builders only allow their clients to make selections after a contract has been signed, relying on the client to want changes and upgrades which will cost more. They do this so they can charge a premium for the requested item and beef up the profit margin of the build.
Look for builders, like Highwater Homes, that have an online project management systems in place which grants you access to a detailed list of standard inclusions as well as requested upgrades or wish list items. Selection details should include product codes, upgrade costs, accurate descriptions and direct product links.
Many builders, who claim to be custom builders, will not provide specific inclusion details and will instead provide vague meaningless descriptions.
Avoid signing contracts or tenders that state ‘Builders Range’. This is not a clear description of what you will get.
Accurate descriptions and detailed inclusions let you know exactly what is going to be installed into your new home. This allows a professional builder to meet your expectations prior to contracts being signed. In turn the likelihood of a variation needing to be raised is reduced because you changed your mind.
Don’t forget that you as the client have responsibilities too.
It is important to note that there is always an expectation that you will complete your own research by looking into the builders standard inclusions and requesting upgrades or asking questions if you are unhappy or unsure prior to entering into a building contract.
What are the implications of variations during the build?
Variations, depending on the type, can have various implications on the build. Commonly they can halt construction, or delay occupation, neither of which are ideal.
When a variation request is brought to the attention of the builder they must consider the implications of the request and how much the request will cost. Once this is done a formal variation document can be raised.
Standard building contracts will stipulate that work cannot commence on a variation until the builder provides written notice of the variation to the owner. The notice must be signed and dated by both the owner and the builder to prove acceptance.
Whilst a variation request may appear simple, such as changing a tap, there are a number of variables the builder must consider. Has the plumbing rough-in started? If it has can the new tap connect to the plumbing work already installed? Has the current tap been ordered? If it has been ordered will the supplier accept a return? How is the new tap positioned? Will the new tap affect the sink, bench tops, tiling, etc.? Depending on the answer a simple tap change could cost hundreds and delay the construction timeline your builder has projected.
The more complex a variation the greater the resulting delay can be.
Avoid variations. Engage with a professional builder who offers:
- In-depth PBAs
- Access to design consultants
- Accurate, detailed and specific product inclusions
But don’t forget that a builder also wants to engage with a client who:
- Does their research and knows what they want to include in their new home
- Is aware of their budget
- Asks questions when unsure
- Expresses any concerns prior to entering into a building contract