How do I handle a variation order as a small builder?
A variation is any change to the work you agreed to do: more, less or different. Agree the price and the effect on time in writing, signed by the client, before you start the extra work. That one habit stops most disputes about final accounts.
What counts as a variation
This guide gives general principles, not legal advice. A variation is a change to the scope, quantity, quality, order or timing of the work in your contract or quote. The client asks for an extra socket, a different tile, a bigger window, or drops the patio. Something unforeseen, such as bad ground, may or may not be a variation. That depends on what your contract or quote says about it, so state your assumptions and exclusions when you price.
Variations go down as well as up. If the client omits work, credit it. Doing so keeps your paperwork fair and shows the client the account is honest.
Get it in writing before you do it
Most variation disputes follow the same pattern: the client says "while you are here, could you...", you say yes, and at the end they say they thought it was included, or that it would cost far less. A quick written note beats an argument about memory.
Citizens Advice tells homeowners that a quote is a promise to do the work at an agreed price, and that a trader can charge more where, for example, they tell the customer extra work is needed and the customer agrees to pay. It also advises customers to put price discussions in writing. If the extra work was never agreed, you will find it hard to claim for it.
For small changes, a text or email is better than nothing. Write what you will do, the price and the effect on time, and ask for a reply that says "agreed". For anything over a small amount, use a signed variation order.
What goes in a variation order
- A reference number, the date and the job address.
- Who asked for it, and how: instruction from the client, an architect's drawing change, a site meeting, or a call.
- A clear description of the work, with reference to drawings or specification where there are any.
- The price, and whether it is a fixed sum, an estimate or time and materials. Say whether VAT is included.
- The effect on the programme: extra days, or none.
- Any effect on other work, such as a different order of trades or longer lead times for materials.
- Signature and date from the client, or the person with authority to instruct, and from you.
Keep the form to one page. A client who can read it in a minute is more likely to sign it. Number your variations in order, and keep a running total so everyone can see what the final account is heading towards.
Valuing the work
There are three common ways to price a variation. Use the one your contract names, and agree the method before you start.
- Agreed lump sum: you quote a fixed price for the extra work. This is the clearest for a small job, because there is nothing to argue about later.
- Contract or schedule rates: if the variation matches work already priced, such as more brickwork at the quoted rate per m2, use the same rate. A priced schedule makes this quick.
- Daywork: where the scope is unclear, record hours, labour and materials on daywork sheets and have the client sign each day. Agree the hourly rates and the percentage added to materials beforehand.
Example, made-up figures. At Brunel Terrace the client asks you to add a second opening window to the side wall. You agree to price it as a lump sum:
- Labour: 2 days x 8 hours x £30 an hour = £480.
- Materials at cost: £220, plus 10% handling = £242.
- Subtotal: £480 + £242 = £722.
- Overheads and profit at 15%: £722 x 0.15 = £108.30.
- Variation total: £830.30, before VAT.
The rates and percentages are made up for illustration. Use your own costs. The point is that the client can follow the sum, and you can check it when you invoice.
Effect on the programme
Extra work takes time even when the price is small. If the change affects work that follows, the completion date can move. Put the extra days on the variation order, for example "adds 2 working days". If it adds no time, say that.
Check whether the variation changes the order of work: a new window may need a lintel and plaster to be reworked before decoration. Update your programme and tell the client the new completion date when they sign. This protects you if the job runs over and the client later asks why.
Homeowner jobs and the Consumer Rights Act 2015
When the client is a homeowner paying for work on their own home, as a consumer rather than a business, the Consumer Rights Act 2015 applies to the services you provide. It treats every such contract as including these terms:
- You must perform the service with reasonable care and skill (section 49).
- Things you say or write about yourself or the service can become part of the contract if the customer takes them into account (section 50). A casual promise about price or time can bind you.
- Where the contract does not fix a price, the customer must pay a reasonable price, and no more. What is reasonable is a question of fact (section 51).
- Where the contract does not fix a time, you must do the work within a reasonable time (section 52).
The practical lesson is to fix the price and time for each change before you start, so you do not leave it to be judged afterwards. Citizens Advice says an estimate is a best guess and the final bill can differ, but it should still be a reasonable price. In judging that, it points to the original estimate, any changes and their causes, and things outside the trader's control.
This is general information, not legal advice. For a disputed final account, take advice.
Recording verbal instructions
Verbal instructions on site happen all the time. Do not ignore them, but do not rely on them either.
- Write it down the same day in your site diary: who said what, when, and where.
- Send a short message the same day: "As discussed today, you asked us to move the kitchen door 300 mm left. This will cost £340 and add one day. Please reply to confirm."
- Do not start until you have a reply, unless it is urgent and safe to do so. If it is urgent, say in the message that you have started because of the circumstances.
- If someone other than the client gave the instruction, such as the client's partner or a friend, check that they have the authority.
Keep all variation papers in one place, in order, so the final account is a matter of adding them up.