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Can changes be made to a domestic building contract?

An Overview on Changes Made to Domestic Building Contracts

Changes to domestic building contracts may be made if statutory requirements prescribed in the Domestic Building Contracts Act 1995 (Vic) are met. If changes are made to working drawings, schedules, scope of works, plans and specifications, annexed to a major domestic building contract, then those changes are commonly known as variations.

In this article, we address the frequently asked questions that builders and building owners may have regarding changes that can be made to domestic building contracts:

What is domestic building contract?

A domestic building contract has a prescribed meaning in the Domestic Building Contracts Act 1995 (Vic). A domestic building contract is legally defined as:

“a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor.”

There Domestic Building Contracts Act 1995 (Vic) prescribes domestic building contracts and major domestic building contracts. There are notable differences between major domestic building contracts and domestic building contracts.

In contrast to domestic building contracts, a major domestic contract requires a particular monetary threshold to be reached. Currently, a major domestic contract is a domestic building contract for the carrying out of domestic building work that is more than $10,000. There are also stricter statutory requirements when major domestic contracts are entered into by the parties.

Topics relating to domestic building contracts, include:

Can a builder make changes to a domestic building contract?

A builder may make variations or changes to a domestic building contract if the builder complies with the statutory requirements set out in the Domestic Building Contracts Act 1995 (Vic). If a builder intends to make variations or changes to plans and specifications of a major domestic building contract, then the builder must give to the building owner a notice that contains the following prescribed information:

  • describe the variation that the builder wishes to make
  • why the builder wishes to make the variation
  • what effect the variation will have on the work being carried out under the contract
  • whether a variation to any permit will be required
  • if the variation will cause delays, and if there are delays, then the builder’s reasonable estimate regarding the delays
  • the cost of the variation, and how the cost will affect the contract price.

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Are there exceptions for a builder to make changes to a domestic building contract?

A builder should not cause a change or variation to happen unless certain events arise. A simple event that permits a variation to be made is that a building owner gives a signed consent of the builder’s variation notice. However, a more complicated event when a variation is made is the following circumstance set out below:

  • A building surveyor requires in a building notice or building order that variations are made;
  • the requirements of that variation are outside the builder’s outside;
  • the builder included a copy of the building notice or building order in the builder’s variation notice; and
  • the building owner does not advise the builder in writing within 5 business days of receiving the notice that the builder owner disputes the building notice or order.

At the same time, if a builder receives a variation notice from a building owner, and reasonably believes that a variation will not require a variation to any permit, not cause any delay, and not add more than 2% to the original contract price stated in the contract, then builder may carry out the variation.

Read More: Can a building vary a domestic building contract?” draws an overview on a builder’s obligations when making requests for changes to a domestic building contract.

Can a building owner make changes to a domestic building contract?

A building owner may make variations or changes to a domestic building contract if the owner complies with the statutory requirements set out in the Domestic Building Contracts Act 1995 (Vic). A building owner that intends to make variations or changes to plans and specifications of a major domestic building contract must give the builder a notice outlining the variations that the owner intends to make.

After receiving a notice from a building owner, a builder will be required to give to a building owner, a notice that they are able to carry out the variations, or a notice that states the builder refuses or is unable to carry out the variations and state the reason for that refusal or inability.

If the builder is able to carry out the variation, then the builder must give a notice to the building owner a notice stating the following prescribed information:

  • what effect the variation will have on the work carried out under the contract, and whether a variation to any permit will be required;
  • if the variation will result in any delays;
  • if the variation will result in delays, then the builder must state the builder’s reasonable estimate as to how long those delays will be; and
  • state the cost of the variation and effect it will have on the contract price.

It is important to highlight that a builder should not give effect to any variation requested by a building owner until the building owner has given the builder a signed request for the variation, alongside a signed copy of the builder’s variation notice to the builder owner. An exception applies if the builder reasonably believes that a variation will not cause delay, and not add more than 2% to the original contract price.

Read More: Can an owner change a domestic building contract?” draws an overview on a building owner’s obligations when making requests for changes to a domestic building contract.

Notes and Further Information

On topics relating to the built form environment and construction, our related topics include:

Domestic Building Work | Domestic Building Contracts Act 1995 | Domestic Building Contract | Major Domestic Building Contract | Variation (Owner) | Domestic Building Contracts Regulations 2017 | Domestic Building Insurance | Progress Payments | Variation (Builder) | Termination | Repudiation | Causation

If you are looking for legal expertise and have any questions, connect with an author or a member of our building and construction team.

Do you need legal advice? Call us on (03) 5331 1244 to get in touch and arrange an appointment with one of our lawyers.

You can also connect with us by filling out your details and telling us about your information for legal advice below:

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Authored by:
Ben Franklin, Managing Partner (LIV Accredited Specialist – Property Law), &
Matthew Tran, Lawyer.

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