Avoiding disputes

Q: Variations appear to be one of the main causes for disputes between builders and homeowners. How do you manage them to ensure this doesn’t happen?

Firm: O’Leary Homes
Principal: Greg O’Leary
Location: Napier
Staff: 3 staff

I’ve been building for 30-odd years and I can only remember ever having one guy jumping up and down about not wanting to pay for a variation – and, in the end, he understood the reason for it and paid up.

Open communication is key to ensuring that variations don’t cause a problem. As long as you discuss it with the homeowners beforehand, and give them some idea of the price, they’re usually fine with the process. In fact, most variations stem from homeowners changing their mind about some aspect of the design, so an ensuing variation and discussion shouldn’t come as a surprise.

It’s also helpful that the Registered Master Builder contracts stipulate how variations will be dealt with. So, as long as you stick to what’s in the contract, it should be fine from a legal standpoint and, as a result, keep disputes from arising. The bottom line is – keep your clients in the loop; they want to know what’s going on with their project.

Firm: Kainui Builders Limited
Principals: Stu Burman
Location: Taupiri
Staff: 2 to 3 carpenters (including himself)

I’ve had my business, based in Taupiri, for about 32 years and the most important thing I’ve learned is that you’re always learning – whether it’s regarding variation process, project management or anything else involved with building a home.

Because I work in such a small town, I usually know the homeowners quite well; so, historically, they were fairly confident I wasn’t taking them for a ride and variations weren’t an issue. However, a few years ago, I took on some bigger jobs for people I didn’t know and I was caught out for not crossing the Ts and dotting the Is with them before going ahead. So, when it comes to variations, I now take precautions to ensure it doesn’t happen again.

These days, I make sure ‘how variations will be handled’ is covered in the contract and, when they do come up, the homeowner and I agree on a price before any work goes ahead. It’s a bit frustrating when they’re not around, and you have to stall work until it’s been discussed, but it’s worth it in the long run.

Firm: Cove Construction
Principal: Nick Gill
Location: Whitianga
Staff: 7 carpenters, 3 apprentices

I started Cove Construction eight years ago and have always aimed to ensure the whole business is as transparent as possible. I think that approach has helped immensely when it comes to variations, as I’ve never had to learn the hard way.

With most people having smart phones, it’s easy to get email confirmation for small variations fairly quickly, and I always discuss how we’ll deal with small variations at the start of a job. That way, there aren’t often hold-ups because of it.

However, I have a variation form that I use for anything major – usually $5,000 or more, depending on the size of the project – where the homeowner has to sign off the variation and the cost. I also submit a variation claim every month, so there’s no large sum they’ve forgotten about that they need to pay when the project’s completed.

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