Most new home budgets don't blow out because of one big mistake. They blow out because of twenty small changes: an extra power point here, a different tile there, a site cost nobody mentioned until the slab was being poured. Each one seemed reasonable at the time. Added up, they're the difference between the price you signed for and the price you actually pay.
Those changes are called variations, and keeping a clear record of them is one of the simplest ways to protect your budget during a build.
What a variation is
A variation is any change to the work described in your building contract after you've signed it. It can add work, remove work or change it, and it usually changes the price, the build time or both.
Variations generally come from three places:
- Owner-requested changes. You decide you want a bigger window, an extra power point or a different benchtop.
- Builder-requested changes. The builder proposes a change, sometimes because a product is unavailable or a design detail won't work as drawn.
- Required changes. Something comes up that wasn't known at contract time, such as site conditions or a requirement from the building surveyor, certifier or council.
How variations must be requested, agreed, priced and paid for is set by your contract and by your state or territory's domestic building laws. In most states, variations are expected to be put in writing and agreed before the work is done. In NSW, for example, variations must be in writing and signed by both you and the builder; in Victoria, you and the builder agree in writing, using a variation notice, before the work starts, with narrow exceptions for minor changes. Read the variations clause in your contract so you know the process your builder has to follow.
Why variations catch people out
- Verbal agreements. "Yeah, we can move that for you" on site sounds free. It often isn't, and it may show up as a charge later with no written price agreed in advance.
- Small amounts add up. A $180 power point and a $450 tile upgrade feel minor. Fifteen of them is a few thousand dollars.
- Builder margin. Variations often include the builder's margin and admin fees on top of the item cost. Check what your contract says about how variations are priced.
- Timing of payment. Some contracts bill variations immediately, others add them to a progress claim. If you're not tracking them, a progress claim can be larger than you expected.
- Time extensions. Variations can also extend the build time, which can affect your rent, your finance or your settlement plans.
How to track every variation
You don't need anything complicated. For every variation, record:
- A number and date. Use the builder's variation number if they give one.
- What changed. Describe it specifically: "Add 2 double power points, kitchen island, north side." Not "extra power."
- Who asked for it. Owner, builder or required.
- The agreed price. Including any margin or fees, and whether GST is included.
- Any time extension. In days, if the builder has claimed one.
- Status. Requested, priced, signed, done, paid.
- Where the paperwork is. The file name or email where the signed variation lives.
Then keep a running total: your contract price, plus all approved variations, minus any credits. That's your real build cost, and it should match what the builder is asking you to pay across your progress claims.
Five habits that stop variation surprises
- Nothing verbal. If a change is discussed on site, follow up by email the same day: "As discussed, please send a written variation with the price before any work starts."
- Get the price before the work. Ask for a written price before you sign, not after the work is done.
- Batch your changes. If you're making changes, try to make them early and together. Late changes, after the work is done, usually cost more.
- Check every progress claim against your list. Before you pay (here is a five-step check), make sure every variation billed is one you approved, at the price you agreed.
- Watch provisional sums and PC items. If your contract has allowances rather than fixed items (see the inclusions checklist), the difference between the allowance and the real cost can work like a variation. Track those too.
What to do if a variation is disputed
If you're billed for a variation you don't believe you agreed to, or the price is different to what you agreed, raise it with your builder in writing and ask for the signed variation document. Stay calm and factual, and refer to specific dates and documents.
If it isn't resolved, whether the charge is valid is a question for your contract and your state's rules. Your state's building regulator, consumer affairs agency or a solicitor can advise on your options. What your records give you is the evidence: dates, descriptions, prices and signed documents.
Variation questions
Can a builder charge for a variation I didn't sign?
It depends on your contract and your state or territory's laws. Many states require variations to be in writing, but there can be exceptions. If this happens, ask for the paperwork in writing and get advice from your state's building regulator or consumer affairs agency before paying.
Are all variations bad?
No. Plenty of variations are sensible changes that make the home better, and some are unavoidable. The problem is only ever variations you didn't expect or can't account for.
When do I pay for variations?
Your contract decides this. Some variations are billed straight away, some are added to the next progress claim, and some are paid at the end. Check your contract's variations and payment clauses.
Official sources
Rules differ between states and territories. These official pages explain the parts of this guide that depend on the law in each state; check the equivalent body where you build.
- NSW Government: contracts for residential building work: variations must be in writing, attached to the contract and signed by both parties (NSW)
- Consumer Affairs Victoria: changing a major domestic building contract: variation notices, prime cost items and provisional sums (Victoria)
- Consumer Affairs Victoria: deposits and payments for building work: when a variation notice is not required, and how variations are paid (Victoria)
