How to do a Notice of Variation?

Variations are a given in construction. But if not managed properly, they can lead to delays, extra costs, and unpaid work. That’s why a clear, well-documented notice of variation is essential.

Whether you're issuing a variation or reviewing one, understanding the process is key. This guide covers when to issue a notice, what details to include, and how to respond, so variations don’t become costly headaches.

What is a Variation Notice in Construction?

A notice of variation (also called a variation notice) is a formal document that notifies the project owner or manager of a change to the contract scope, cost, or timeline. It ensures all parties acknowledge and agree to the modification before the work begins. Without a properly issued notice, construction companies risk disputes, rejected claims, and unpaid work.

Learn how to manage variations the right way with our full guide on Variation in Construction.

When to Issue a Notice of Variation?

A notice of variation should be issued as soon as a change affects the contract’s scope, cost, or timeline. It ensures the project owner or manager is formally notified before the work begins, reducing the risk of disputes or unpaid variations.

Key triggers for issuing a notice include:

• Client-initiated changes: When the project owner requests modifications to design, materials, or scope.
• Errors or omissions in design: If design flaws or missing details require changes to meet project requirements.
• Material supply issues: When specified materials are unavailable, requiring substitutions that impact cost or performance.
• Unforeseen site conditions: Unexpected ground conditions, hidden utilities, or compliance issues that affect construction.

The golden rule: Always submit a notice of variation before starting the work. If work proceeds without formal approval, recovering additional costs or extensions later becomes difficult. A properly issued notice protects your position and ensures changes are handled fairly under the contract.

How to Prepare a Notice of Variation

Issuing a notice of variation correctly is essential to ensure the change is documented, approved, and compensated.

Follow these steps to get it right:

1. Review the Contract

Before submitting a notice, check the contract for variation clauses. Most standard form contracts—such as AS 4000, AS 2124, and GC21—outline specific requirements. This includes how long you have to submit a notice, who must approve it, and what documentation is required.

Some contracts have strict deadlines, often within days of identifying a variation. If you miss the timeframe, you may lose the right to claim additional costs or time extensions.

Make sure you understand the approval process. Some contracts require written consent before any work begins, while others allow variations to proceed once notified. Failing to follow the contract’s procedures can lead to automatic rejection, even if the change was necessary.

2. Clearly Describe the Variation

A strong notice provides a clear and detailed description of the variation. It should specify the following:

• What is changing: Specify the affected work, materials, or design.
• Reason for the change: Explain why the variation is necessary (e.g., client request, design error, site conditions).
• Scope of the change: Outline the specific tasks involved and how they differ from the original contract.

‍💡 Pro tip: Avoid vague descriptions. Instead of saying, "Additional excavation required," be specific: "Additional excavation of 300mm depth required due to unforeseen rock conditions in foundation area."

3. Evaluate the Cost and Schedule Impact

Every variation affects the project’s budget, schedule, or both. The notice should include:

• A breakdown of additional costs: Labour, materials, subcontractors, equipment hire, and any other relevant expenses.
• Time extension requirements: If the variation will delay project completion, specify the number of extra days needed.
• Supporting evidence: Attach consultant instructions, supplier quotes, revised drawings, or any other documentation that validates the cost and schedule adjustments.

If the full impact isn’t clear yet, submit an initial estimate and note that final costs and timelines will be confirmed later. This keeps the process moving while allowing for further assessment.

4. Submit the Notice in Writing

Verbal discussions are not enough. The notice must be submitted in writing, following the contract’s requirements. This can be through email, a formal letter, or a project management system that records all communications.

If submitting by email, request a read receipt or confirmation of acknowledgment to ensure it is received.

Keeping a written record protects your position if a dispute arises later. A well-documented variation notice makes it easier to claim additional costs and prevents disagreements over who approved what and when.

5. Track and Follow Up

Once the notice is submitted, track its status in a variation register. This ensures that the variation is acknowledged, reviewed, and approved within the contractual timeframe.

Some project owners or managers may delay responding, which can impact progress and cash flow. If there’s no reply within the expected review period, follow up with a reminder to avoid unnecessary delays.

How to Respond & Manage to Variation Notice

Project managers and owners must handle notices of variation properly to avoid delays, budget issues, and disputes. Every variation affects cost, time, or scope, so reviewing it carefully is critical.

1. Acknowledge and Review the Notice

When you receive a notice of variation, acknowledge it in writing. This confirms that the request is being reviewed and prevents misunderstandings. Ignoring or delaying a response can slow down work and cause disputes.

Review the details carefully. Check if the notice follows the contract, was submitted on time, and includes enough information.

Look for key details like why the change is needed, how it affects the project, and any cost estimates. If anything is unclear, ask for more information before making a decision.

2. Assess the Cost and Time Impact

A variation can increase costs and delay the project, so it must be carefully assessed. Check if the estimated costs are reasonable and backed by supplier quotes or labour estimates. If extra time is needed, determine how it affects the overall schedule.

Consult with key people, such as designers, engineers, and quantity surveyors, to confirm whether the change is necessary. If a better or more cost-effective solution exists, discuss it before approving the variation.

3. Request Clarifications (if necessary)

If the variation lacks sufficient details, supporting documents, or justification, formally request clarification from the contractor. This prevents delays caused by misinterpretation or incomplete information.

• Clearly outline what additional information is needed (e.g., cost breakdown, technical details, or scope clarification).
• Set a deadline for receiving the response to avoid project delays.
• Ensure the request is documented to maintain a clear audit trail.

4. Approve, Negotiate, or Reject the Variation

After reviewing the impact, decide whether to approve, negotiate, or reject the variation.

• Approve: If the variation is necessary, follows the contract, and the cost and time estimates are reasonable, approve it in writing so work can continue.
• Negotiate: If the costs seem too high or the time extension is excessive, discuss adjustments with the construction company before approving.
• Reject: If the variation isn’t valid, lacks justification, or was submitted late, reject it in writing with a clear explanation.

4. Document Everything and Update Records

Once a variation is approved, update the contract, budget, and project timeline to reflect the changes. All details must also be recorded in the variation register to ensure transparency and accountability.

With Mastt’s Variation Tool, project teams can log approvals, track financial impacts, and maintain a centralized, real-time record of all variations. This eliminates the risk of misplaced documents, forgotten changes, or disputes over approvals.

Accurate record-keeping prevents budget blowouts, scheduling conflicts, and payment disputes. A well-managed variation process keeps the project on track, ensures compliance, and protects both parties under the contract.

Final Thoughts on Notice of Variation

Variations are inevitable, but how you manage them can make or break a project. A notice of variation does more than check a box. It’s a proper process that helps you stay in control.

Sure, some projects run on handshake agreements. But when changes happen (and they always do), having a proper process in place makes all the difference. Stay on top of the process, and you’ll keep your project running smoothly without last-minute surprises.