Getting Paid for Variations

Master Builders ACT has been receiving enquiries regarding the owners not paying the extra costs as a result of variations. Under clause 15 (e), the MBA ACT Home Building Contract, the builder is entitled to add the cost of extra work and such cost will be added to the Contract Sum. The Builder can choose when and how often to claim payment for variation work and is not required to wait until the next progress payment on condition that the variation notice was issued in accordance with the variation clause.

Members are reminded to comply with their obligations under the contract during the course of the construction, in particular, when claiming a variation under the contract. It is important for the builder to identify any work that might be considered a variation before it is undertaken. Members should check their contract in the first instance in determining whether work constitutes a variation. If it’s a variation, make sure to comply with the variation clause to serve any variation notices. Failure to comply with the administrative requirements of the contract might result in you not getting paid for the additional costs that occurred.

Clause 15 requires a written variation notice must be served on the owner before the variation work is agreed and undertaken. Once the variation notice is served on the owner, the builder must within 10 business days serve a written cost variation notice on the owner for their approval. It is important to comply with the administrative requirement set out in the contract. Otherwise, your variation notice may not be valid and can result in the builder not being paid for the costs variation.

If the variation results in the construction period being extended, make sure to serve a notice on the owner following the Delays and Extensions of Time (clause 13). The builder is required to serve the notice within 5 business days of a delay occurring.

If you need any advice in relation to getting paid, please reach out to our Workplace Relations and Legal Team on (02) 6175 5900.