Plans for building, renovating, and extending a house are seldom set in stone. They are bound to change to include or exclude some details when the plans are in progress. These changes are often accompanied with additional costs that were previously not budgeted for, or increase the building time, thus giving rise to disputes between the builder and the owner. This is where you’ll want to draw your attention to building variations.
What are building variations?
Variations are commonly referred to as the changes in the previously agreed upon building contract. These can typically include anything from changes in the design of door, windows, walls, taps etc, to variations in the quality of the product and the order of construction. While building variations are not unusual, lack of thoroughness while signing a contract or not anticipating such changes before terms are agreed upon can lead to a dispute between the builder and the owner.
In most cases, if the variations are proposed by the owner, the owner himself undertakes the additional costs. However, owners need not pay if the variation work has to do with issues that should have been taken care of before the work started.
How do you manage them?
Efficient management of variations only needs clear communication between both parties involved. You will want to put all the new terms of the agreement on paper. This must include the changes, the new price, and the date of expected completion before the commencement of the work.
Typically, additional costs are provided by the builder and then negotiation takes place between the parties. Making sure that you have the paperwork documenting the changes along the line would help you avoid any hassles. Alternatively, negotiating a different solution or weighing the pros and cons of the changes have helped owners make clever choices. Ask yourself if the proposed changes are really worth the incurred costs.
How are they calculated?
Variations can get expensive for several reasons and most of them are calculated by taking into account the prime cost (PC) and the provisional sum (PS). Prime cost is undertaken for a fitting, like a basin, but the actual price of the item is not known when the contract is signed. On the other hand, a provisional sum is a reasonable estimate of the cost of carrying out the work. For example, the installation of the item itself.
Other associated costs may include approval expenses, pre-agreed penalty etc. The variation fee, therefore, will be a culmination of all these charges. A builder would endeavour to provide a quote for these charges that also includes a reasonable profit for the builder. Once agreed upon by both parties, they are then put in writing for the contract.
How to avoid them?
The best way to avoid them is to plan your house down to the detail. That includes researching the brands you want on your taps, door handles, locks, bulbs etc. Charting down everything you want, even the coats of paints, before the contract is signed will help you avoid any extra charges later. Ideally, you wouldn’t want variations so think of all things that are non-negotiable and include them in your contract beforehand. With those already taken care of, chances are that you will be more flexible with other variations that arise later.
Thinking about building your own home but not sure where to begin? Get in touch on 1800 184 284 or book a call with our team for free expert advice today.