Resource ● Last updated 24 July 2024 ● 7 min read
How to change a domestic building contract
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What is this resource?
This resource is for homeowners in Victoria who have a domestic building contract and:
- Want to change their domestic building contract; or
- Their builder wants to change their domestic building contract.
This resource gives you legal information to help you change your domestic building contract property, so you are not caught by unexpected legal consequences.
Check your contract first
This resource provides general information based on standard form contracts from Master Builders and the Housing Industry Association (HIA).
You should always look at your own contract because it may be different from the information in this resource. If you have another type of contract, please get independent legal advice.
What type of work can I change?
You may find that after building work has started on your property, there are things you might want to change in your domestic building contract or the specifications.
This may include:
- changing the type of doors installed
- the shape of your driveway
- or more significant changes such as the layout of the floorplan
Terminology – ‘changes’ mean ‘variations’
Changes to contracts are often called variations.
This resource refers to changing a contract, but this can be replaced terms like with ‘contract variations’, ‘varying a contract’, or ‘variations to contract’.
How do I ask my builder if I want to change the contract?
If you want to change something in the contract, you will need to ask your builder in writing and sign the document. It is important to keep clear records of all the changes you make to your contract.
Your builder does not have to accept your request.
If your builder chooses to accept your request, there are two ways they can do this. Their acceptance will depend on the type of changes you want to make to the contract.
- Small changes can be accepted immediately.
- Larger changes need to be accepted by your builder in writing.
In certain situations, your builder can accept small changes you want to make to the contract without responding in writing and can start the changes to the work immediately.
Conditions that need to be met for small changes:
- Your builder does not need to amend any permits; and
- The changes will not delay the overall timeframe for the building project; and
- The changes will not cost over 2% of the original contract price, (e.g. if your original contract price was $250,000, your builder can accept anything under $5,000 immediately).
All 3 conditions need to be met for your builder to accept your changes to the contract immediately.
If you want to make large changes to the contract (ie. the changes you want to make to the contract don’t meet one of the above conditions), your builder will need to respond to your request in writing.
Your builder needs to confirm in writing if any of the following apply:
- Your builder needs to amend any permits; or
- The changes will delay the overall timeframe for the building project; or
- The changes will cost over 2% of the original contract price (e.g. if your original contract price was $12,000, changes that will cost over $240 mean your builder must confirm in writing).
If any of the above circumstances apply to your contract changes, your builder must agree in writing to carry out the work.
What information does my builder need to give me if they agree to change the contract?
If your builder agrees to the changes you asked for, they must include certain information in their written confirmation. They must include all the following information:
- The effect the changes will have on the whole building project; and
- Details of changes that need to be made to any permits; and
- An estimate of the new completion date; and
- Cost of the changes and effect on the total contract price.
If your builder accepts your changes to the contract, your signed written request should be attached to their notice.
What if my builder does not agree to change the contract?
It is important to note that your builder does not have to accept your request.
For small changes (see above), your builder can choose not to do the work and let you know.
For large changes (see above), your builder must reply in writing and explain why they do not want to, or cannot, make the changes you have asked for.
What about the changes in price to the contract?
Make sure you check your own contract for accurate price and payment information!
If your changes increase the cost of to the building works, your builder may either:
- Give you a separate invoice as the changes are completed; or
- Add the cost of the changes to your next stage payment invoice.
You may also need to pay a deposit before the new works can begin. The deposit should be deducted from the total cost of the change.
If your changes reduce the cost of the building works, the difference will be taken away from your next payment invoice.
There are some costs that don’t apply and are calculated separately.
Prime cost items are not known when the contract is made and when changes to the contract are made. Prime cost items may include things that you want to choose yourself because of the design or quality, such as:
- door handles;
- taps;
- carpet;
- tiles.
They might be more expensive or difficult to get, so your builder will estimate their cost and make an allowance for them in the contract, but they will only be priced accurately once purchased. Prime cost items will be calculated separately. If they end up costing more than the allowance, you will pay the difference. If they cost less, you will be refunded the difference.
Provisional sums are not known when the contract is made and when changes to the contract are made. They include the cost of an item and the cost to install the item. Provisional sums may include a bath and its installation, or a hot water system and its installation. Your builder will estimate their cost and make an allowance in the contract, but they can only be priced accurately once purchased and installed. Provisional sums will be calculated separately. If they end up costing more than the allowance, you will pay the difference. If they cost less, you will be refunded the difference.
Your builder must calculate the allowance for prime cost items and provisional sums with reasonable care and skill.
If your builder asks you to instruct them and make decisions about prime cost items or provisional sums, you must reply in writing with your choice or decision within 7 days of their request.
What if my builder wants to change the contract?
If your builder wants to change something in the contract, they will need to ask you in writing. Changes your builder may want to make could include changing a feature of the plans or using different materials.
Your builder must get your signed consent to begin work on any changes.
If you disagree with their changes, you must let your builder know in writing within 5 business days.
In their written request to change the contract, your builder must
- describe the change and why they want to make the change; and
- explain the effect the change will have on the work; and
- state amendments to any permits that will be needed; and
- give a reasonable estimate of any delay to the overall building project caused by the changes; and
- state the cost of the changes and effect on the total contract price.
All of the above information needs to be included in your builder’s request.
If you agree to the changes, check the above information about the changes in price to the contract, including the costs that do not apply.
What if I do not agree to change the contract?
Your builder must get your signed consent to begin work on any changes.
If you do not agree with your builder’s changes and would like your contract to stay the same, you must let them know in writing. You must write to your builder within 5 business days of receiving their written request to change the contract.
If you do not notify the builder in writing within 5 business days, your builder may change the contract if all the following apply:
- A building surveyor or other authorised person issues a building notice or order under the Building Act 1993 (Vic) requiring the change; and
- Your builder gave you a copy of the building notice or order together with their written request to change the contract; and
- The changes are because of circumstances beyond your builder’s control, such as material shortages or discontinued products. This could include a range of different scenarios.
If you do not agree with your builder’s changes and would like to end your contract, you may find our ‘How to end a domestic building contract’ resource helpful.
What changes can’t my builder charge me for?
Your builder should not charge you more for changes required in your building contract, if the change could have reasonably been avoided if the builder had obtained all the foundations data.
Foundations data is critical to working out the cost of your contract so your builder must get foundations data before you sign the contract. Foundations data must be correct so your engineer can accurately and safely plan their building design.
Terminology – what is ‘foundations data’?
Foundations data is information about the type of soil on your land and plans for the base needed to support a building. An example could be excavating rock that the builder should have known about from the foundation data.
For more information, go to the Consumer Affairs Victoria webpage about foundations.
Key Terms
| Legal Term | Meaning |
|---|---|
| Foundations data | Information about the type of soil on your land and plans for the base needed to support a building |
| Variation | Changes to a contract. |
A list of building definitions can be found on the Consumer Affairs Victoria Building definitions website.
This resource was last updated on 24 July 2024. This is legal information only and does not constitute legal advice. You should always contact a lawyer for advice specific to your situation. Please view our disclaimer for more information.
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