TL;DR
A variation in construction is a written change to the original scope of works under a building contract — typically caused by client requests, design changes, latent site conditions, or regulatory updates. Variations must be priced, documented, and signed by both parties before the work proceeds, otherwise builders risk being unable to recover the cost. In Australia, every state’s domestic building legislation requires written variations, and most major-defect / progress-claim disputes start with informal verbal variations that were never properly papered.
Key Stats
- Written form is mandatory — verbal variations are not enforceable under most AU domestic building Acts.
- 3-7 days — typical contractual window to issue a variation quote after the change is requested.
- 10-15% — average total variations as a share of contract value on a residential build.
- $0 cost to paper, thousands to dispute — an unpriced verbal variation is the single most common cause of builder/client disputes in AU.
- Sign before you build — variations should be signed by the client BEFORE the work proceeds, never after.
A variation (also called a change order or variation order) is any change to the original scope of work defined in a construction contract. This includes additions, omissions, or changes to the design, materials, or methodology.
Types of Variations
- Owner-directed variations — the client requests changes (e.g., upgraded finishes, additional rooms)
- Design variations — changes required due to design errors or incomplete documentation
- Site condition variations — unforeseen conditions like rock, contamination, or existing services
- Regulatory variations — changes required by building surveyors, councils, or updated regulations
How to Manage Variations
- Document everything — never proceed with verbal instructions alone
- Issue a written variation notice before starting the changed work
- Include the cost impact — materials, labour, margin, and any time extension
- Get written approval from the client before proceeding
- Track against the original contract — maintain a variation register
Why Variations Kill Margins
The #1 reason builders lose money is unmanaged variations. Work gets done, the cost increases, but the paperwork isn’t done and the client disputes the charge after the fact. Every variation needs a paper trail.
Frequently Asked Questions
Can a builder charge for variations?
Yes. If work falls outside the original contract scope, the builder is entitled to claim the additional cost plus margin. The key is having a signed variation order BEFORE the work starts.
How much should I mark up variations?
Most builders apply the same margin as the original contract (typically 15-25%). Some contracts specify a fixed variation markup rate. Check your contract terms.
What if the client refuses to approve a necessary variation?
If the variation is required by regulation or site conditions, document the requirement in writing and issue a formal notice. If the client still refuses, seek advice before proceeding — doing the work without approval puts you at risk of not being paid.
Manage your builds with Built Simple
All-in-one construction management for Australian builders.
