Building Contract Variations

Building Contract Variations: How to Keep Scope, Price and Programme Clear

What counts as a variation?

In plain terms, a variation is a change to what was agreed. It may affect the work itself, materials, price, programme, drawings, responsibilities or a building-consent process. The Building Performance guidance for higher-value residential contracts requires a process for agreeing variations before work continues. [1]

Small changes can still have a larger knock-on effect. A different tile may require a different substrate. Moving a wall could change coordination with plumbing, electrical work, cabinetry or consented documentation. Raising the question early is usually much easier than trying to reconstruct what was agreed after the work is complete.

Use a written variation record

Do not rely on a quick conversation, an informal text or a mark-up on an old drawing as the whole record. Before affected work starts, ask for a written variation that identifies the original item and states the proposed change in enough detail to be understood later.

Contract change and consent change are not the same thing

A variation agreed between owner and contractor may also require action under the building consent. Building Performance says all proposed variations must be communicated to the building consent authority, which decides whether a proposed change is minor or major and what process is needed. [2]

The owner remains ultimately responsible for the work's compliance and for obtaining the Code Compliance Certificate. Designers, builders, project managers and owners should work together to provide the information the authority needs. Do not assume that a signed contract variation is, by itself, consent approval.

Keep the price conversation honest

A fixed-price contract does not mean the project can never change. It means the agreed scope has a defined price subject to the contract terms. A variation should show whether the cost is a fixed amount, an estimate, an allowance, a credit, or work to be charged by an agreed method. If it relies on a provisional sum or incomplete supplier pricing, say that plainly and confirm how the final amount will be reconciled.

Ask for enough detail to understand the cost driver. That may include labour, materials, subcontractor work, freight, design input or required remedial work. Detail does not have to mean a twenty-page document, but it should be clear enough that both sides can recognise the change later.

Programme is part of the decision

Changes can affect more than the immediate task. They can move product lead times, inspections, subcontractor availability, access requirements and the order in which other work can proceed. Ask whether the change affects the critical path, the target completion date, a booked inspection or another item you need to decide quickly.

If the answer is not known yet, record that uncertainty rather than pretending the programme is unchanged. A transparent note is more useful than a date that has not been tested.

A practical routine for homeowners

• Raise a proposed change as soon as you identify it.
• Ask whether it changes the scope, price, programme or consented documentation.
• Wait for a written variation or written direction under the contract before affected work proceeds.
• Read the pricing basis and any assumptions or allowances.
• Confirm who is responsible for any consent, design or supplier follow-up.
• Approve only if you understand the change, then save the signed record with the contract.
• Keep the variation register current so the total project position remains visible.

Building Performance sources

1. Before building work starts, Building Performance
2. Managing variations and amendments, Building Performance