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“Owner Builder” Facts

By Karen Nakamura Posted in: BIARemodel

HRS-444 is the state law that regulates contractor licensing. This law is meant to protect consumers from liability, fraud and workmanship that does not meet building codes and building standards. Licensed contractors are registered with the state Department of Commerce and Consumer Affairs, (DCCA). The state has their names, addresses, social security numbers or fein numbers and it can find them to get restitution.

The Owner Builder Exemption fosters unlicensed individuals to shift liability on to the owner without the owner knowing the consequences. Complaints have been filed with Regulated Industries and Complaints Office (RICO), and in many cases it takes years of investigation to substantiate the cases. The result: Owners cannot get restitution for their losses and are left with a situation that devalues their investment.

Yes, we are all “related” in Hawaii or someone we know works in the construction industry. Yes, building costs in Hawaii are the highest in the nation. Is the risk worth taking when the values of our homes exceed $625,000? Is the risk worth it when the new building materials and building systems require specialized training? Is the risk worth taking when your net worth and lives are impacted?

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Owners, please educate yourself before signing the Owner Builder building permit application. When you sign this permit application, you are the contractor on record and you are liable for the safety of all workers as well as compliance to the environmental (EPA) and (OSHA) regulations. Violations of federal regulations, (EPA and OSHA) are not excusable and the daily fines and penalties are expensive. The buck stops with you. The Owner Builder Exemption of the Contractor’s Licensing Law allows owners or lessees of property to build or improve residential, farm, industrial or commercial buildings or structures on property for their own use, or for use by their grandparents, parents, siblings or children, and who do not offer the buildings or structures for sale or lease. When owners are advised by individuals to sign the Owner Builder permit application, the owner can hire employees and contract directly with subcontractors to construct the improvements on their property. The owner then takes on all the responsibilities and the liabilities of a general contractor.

Do not be confused: The Contractor Licensing Law HRS-444 is regulated by RICO. RICO assists the public and licensees through education and through enforcement of the state’s professional licensing laws.

Building permits are regulated by the City and County Department of Planning and Permitting, (DPP). A building permit is not required for repairs using similar or same materials for the purpose of maintenance and which are not more than $1,000 in valuation in any 12-month period and do not affect any electrical or plumbing installations.

The Building Industry Association of Hawaii (BIA-Hawaii) has introduced SB-1077 to improve the ability of RICO to investigate violations of the Owner Builder Exemptions and to offer additional disclosures for owner builders when they enter into agreements with licensed subcontractors.

Call or email your legislator to support SB-1077. For more information contact me at ktn@biahawaii.org.

Karen Nakamura is CEO of the Building Industry Association of Hawaii.