Variation pricing when the client changes the kitchen layout mid-build
A fixed-price contract for a renovation is at frame stage. The client asks to relocate the kitchen sink from the external wall to an island bench, add a second bathroom to a space previously designated as a study, and upgrade to a larger oven. The builder's contract includes a variation clause requiring written instructions signed by both parties before work proceeds. The client has sent the request by text message and says 'just do it, we'll sort the price later'. The plumber is on site tomorrow and the cabinet maker needs final dimensions within three days. The contract sum is $420,000 with a 10% contingency allowance held by the builder.
1. How should the builder handle the client's text message instruction?
Read the worked answer
The text message is not a valid variation instruction under the contract, which requires a written instruction signed by both parties. The builder should not act on it as authority to proceed. Instead, the builder should prepare a written variation document setting out the changed scope, the price (or a priced estimate with a mechanism to finalise), the time impact and any consequential changes to other trades.
The builder should acknowledge the client's urgency and explain that the document protects both parties - without it, there is no agreed price and the client may later dispute the cost. A practical approach is to issue the variation promptly, ask for signature the same day, and offer to commence only the non-contentious preliminary work (such as confirming dimensions with the cabinet maker) at the client's risk in writing.
The builder must not simply absorb the changes into the contingency. The contingency is for unforeseen conditions, not for client-initiated scope changes, and using it would leave the builder exposed if a genuine latent condition later arises.
2. What cost and programme issues should the variation address, and what risk does the second bathroom create?
Read the worked answer
The variation should address: the plumbing relocation (new waste and supply runs, fall to the island, possible slab or floor structure penetration); the second bathroom (waterproofing, tiling, fixtures, ventilation, electrical, and whether the study space has adequate floor waste and ceiling height); the oven upgrade (cabinet resizing, power circuit capacity, clearances to combustibles); and the programme effect on cabinet maker lead times, tiling and inspection sequencing.
The second bathroom is the highest-risk item because it converts a dry room into a wet area. The builder must confirm whether the space can achieve the required fall to a waste, whether the existing floor structure can accommodate a recessed shower, and whether the building approval covers the additional bathroom. If the approval does not, a variation to the permit is required before work, which will affect the programme.
Pricing should include a margin on the variations and a stated validity period, because supplier prices for the oven and fixtures may change. The builder should also record the client's acceptance of the programme extension in the same document.