A man's hand holds a magnifying glass over a contract on a table

How to manage variations to building contracts

Ben Johnson ||

Co-authored by Anthony Losurdo

“Variation” can be a scary word in the building industry. Disagreements about variations are a common cause of disputes and litigation. Despite this, variations can be a helpful tool for owners and building contractors to make changes to the scope of works without risking termination. It is important to understand the variation clause in your building contract before you sign it so that you comply with its requirements and avoid unexpected costs and difficulties.

What is a variation?

In a building contract, the scope of works is typically set out in attached specifications, plans or brief, which form part of the contract. A variation is change to the scope of works in the contract after the contract has been signed. A variation can be used to correct omissions to the original scope of works or make changes that arise during the build.

Common examples of variations include:

  • Additional materials and their installation
  • Additional work to comply with government regulations
  • Changes in price of materials
  • Additional certification and design
  • Changes to the plans
How to apply for a variation

Most building contracts contain a variation clause allowing both the building contractor and homeowner to vary the scope of works during construction. These clauses can vary between contracts, so it is important to review your contract to understand the steps required to apply for a variation under the contract.

If the owner is seeking to vary the scope of works, they usually need to send a request to the building contractor. The next step will require the building contractor to consent to the amendment and provide an offer. That offer may include a description of the changes, revised designs and drawings, pricing changes and/or extension of time applications. The homeowner can agree to the offer through signed written acceptance. Alternatively, the homeowner may dispute the offer which may require reliance on any dispute resolution clauses in the contract.

In most cases, the building contractor will apply for a variation of the scope of works to meet government regulations or where latent conditions arise. When this occurs, the homeowner is usually unable to unreasonably withhold consent to any variation request.

Parties to building contracts must also be aware of any time restrictions in replying to requests and offers of variation. Failing to comply time limits under variation clauses can result in serious consequences.

Although the contract specifies the procedure that should be followed for variations, the Home Building Act (the Act) sets out mandatory formalities for most residential building contracts. The Act requires that a contract to undertake home building work must include a clause to ensure that any agreement to vary the contract, or to vary the plans and specifications for work to be done under the contract, must be in writing and signed by or on behalf of each party.

How we can help

To discuss a construction contract or for help managing a variation, please contact Coleman Greig’s Building & Construction team. Our team can advise you on your contract and assist with any variation requests or disputes that occur during the construction period.


Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


More posts

Understanding roles in the strata scheme

A strata scheme is a building or group of buildings that have been divided into lots which can be apartments, villas, offices, units or townhouses. This will be articulated in the strata plan.

Can i put my home on Airbnb?

Airbnb is a form of short-term rental accommodation. To add your property to Airbnb in NSW, you are required to meet several laws and regulations governing short-term rentals.

When are liquidators required to seek approval to retain legal counsel?

When does a liquidator (or the company he or she is appointed to) need court, creditor, or committee approval to validly retain a solicitor to act in a liquidation matter which is likely to extend for longer than three months?  The answer to this question has only recently been settled.

Proposed changes to building and construction law in NSW

The Building Bill 2022 (the Bill) is the key avenue through which the NSW Government has proposed to reshape the culture of the building and construction industry by eliminating poor performance and improving the quality of building statewide.

Can you dismiss an employee who fails to return to the office?

Slowly but surely, most employers are requiring employees to return to the office for at least a portion of their working week. Some employers continue to struggle with employees resistant to returning to the office or those who have an expectation that they can continue to work from home whenever it suits them.

New powers to combat phoenixing in construction

The rise of phoenixing in the building and construction industry in Australia in recent years has proved a significant challenge to regulators. Mismanagement of time or cashflow can quickly propel businesses into insolvency.

The NSW Building Commission’s extraordinary powers

In late 2023, the NSW Government passed the Building Legislation Amendment Bill 2023 (Amendment Bill). The Amendment Bill established the NSW Building Commission and granted it extraordinary powers to enter construction sites, inspect work and take away information and materials.

© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230