Contracts and payments
Changes and variations
Building or renovating a home is sometimes a work in progress and, as with any significant project, you or your contractor may have to make some changes along the way. Changes to the contract after it is signed, referred to as ‘variations’, should, however, be kept to a minimum to avoid cost overruns and potential confusion on site. Failure to properly and accurately record, and approve, variations is one of the most common causes of serious building disputes so it is very important to both owners and building contractors to ensure these changes are properly documented.
The relevant Queensland building legislation (Schedule 1B of the QBCC Act) requires that, irrespective of who initiates the variation, the contractor must present the variation to you in writing, and you must agree to it in writing, before the contractor commences the variation work. The variation may be given to you (and you may respond) personally, by post, facsimile or email, or in accordance with any provision in the contract providing for the service of notices.
However it is transmitted, the variation document given to you by the contractor must include certain details which you should carefully check. These requirements are set out in section 41(2) of Schedule 1B of the QBCC Act which is copied below:
41 (2) The document evidencing the variation complies with the formal requirements if it—
- (a) is readily legible; and
- (b) describes the variation; and
- (c) states the date of the request for the variation; and
- (d) if the variation will result in a delay affecting the subject work—states the building contractor’s reasonable estimate for the period of delay; and
- (e) states the change to the contract price because of the variation, or the method for calculating the change to the contract price because of the variation; and
- (f) if the variation results in an increase in the contract price—states when the increase is to be paid; and
- (g) if the variation results in a decrease in the contract price—states when the decrease is to be accounted for.
After you have agreed to the variation in writing, the building contractor must give you a copy in writing (by any of the transmission methods mentioned earlier) within 5 business days of the date you agree to the variation and before any domestic building work the subject of the variation starts (whichever occurs first). The only exception is if the variation work is required to be carried out urgently and and it is not reasonable practicable, in the particular circumstances, for the building contractor to produce a copy of the variation in writing before carrying out the work.
The contractor cannot require payment for a variation before the variation work is started.
See changing or cancelling insurance for information on what to do when your contract is varied.