Owner-Builders in Hawaii Guidelines

A Guide to State Regulations
This information is provided as a public service by the Pacific Resource Partnership in cooperation with the State of Hawaii Department of Commerce and Consumer Affairs and the County Building Department on your island. It is for informational purposes only, as a reference on certain matters pertaining to Owner-Builder exemption permits. It should not be construed as legal advice, and all information contained in this brochure is subject to change.

What Is The Definition Of Owner-Builder?
Chapter 444, Hawaii Revised Statutes (HRS) defines owner-builders as owners or lessees of property who build or improve structures on property for their own use, or for use by their immediate family.

How Do I Qualify As An Owner-Builder?
As an owner-builder, a homeowner acts as its own contractor. When the homeowner applies for a permit, the homeowner is asked to identify all subcontractors who will be working on the project, specifically the electrical and plumbing contractors. These subcontractors must be licensed.

The structure cannot be sold or leased or offered for sale or lease until one (1) year after completion of the construction.

If a person obtains an owner-builder exemption more than once within a two year period, that person is presumed under the law to be in violation of the exemption requirements.

What Are the Major Responsibilities Of An Owner-Builder?
As an owner-builder, you are acting as your own general contractor overseeing that the work complies with all applicable laws, building codes and zoning regulations. It is your responsibility to insure that all subcontractors hired by you have the appropriate licenses required by state laws and county ordinances. Being an owner-builder does not entitle you to hire unlicensed contractors.

As a general contractor, you may be acting as the employer of any worker or unlicensed contractors you hire. As an employer, you must comply with all employer requirements such as deducting and paying the State FICA and withholding taxes, and providing unemployment, temporary disability and workers’ compensation insurance for those workers.

What Are The Risks Of Hiring An Unlicensed Contractor?
You may be sued by an unlicensed individual who is injured while working on your project or be required to pay workers’ compensation or other insurance coverage if a claim is filed and an employer-employee relationship is determined.

How Do Owner-Builders Find Themselves Liable For These Claims?
An unlicensed contractor may persuade a property owner to obtain an owner-builder permit, and then have that unlicensed contractor do the work. The owner is considered the actual employer of any workers hired by an unlicensed contractor.

Licensed contractors or subcontractors are only qualified to do specified types of construction. A licensed contractor working outside its company contracting license classification is considered an unlicensed contractor on the job.

Does Everyone Engaging In Contracting Activity Need To Be Licensed?
The most frequently used and abused exemption in the contractor law is the $1,000 exemption, commonly referred to as the “handyman” exemption. The handyman exemption permits the hiring of a person not licensed as a contractor if the total cost of the project including labor, materials, taxes and all other items is equal to or less than $1,000.

This exemption does not apply in any case where a building permit is required no matter what the total contract price is, or where the work is parceled out into multiple projects. Also, all electrical and plumbing work must be performed by a licensed electrician or plumber, no matter what the total contract price is.

Are There Penalties For Owner-Builder Violations?
Depending on the type of infraction, a first offense may result in a fine of up to $5,000 or 40% of the appraised value of the building, whichever is greater. Subsequent violations may result in a fine of $10,000 or 50% of the building’s appraised value.

How Can A Property Owner Be Protected?
Hire contractors that you have confirmed are properly licensed and current in all employer withholdings and insurances.

Contact the Consumer Resource Center at 587-3222, press 1 to obtain licensing, complaint history and business registration information about a contractor. Licensed contractors must provide the Contractor’s License Board with proof of liability and worker’s compensation insurance.

If I am Having Problems With My Contractor And Want To File A Complaint, Who Do I Call?
You may call the Regulated Industries Complaints Office, Consumer Resource Center at (808) 587-3222, press 3, or email at rico@dcca.hawaii.gov

Additional information is available at the following websites:
RICO website – www.hawaii.gov/dcca/areas/rico/
Prior Complaints Search – http://pahoehoe.ehawaii.gov/cms/app Licensing Search – http://pahoehoe.ehawaii.gov/pvl/app

Before you sign on the dotted line.
Chapter 444 of the Hawaii revised Statues (HRS) requires that a licensed contractor be hired for any construction work which is more than $1,000 or for which a building permit is required. This contractor is considered the responsible and liable party of record for the construction described in the permit.
Property owners who meet certain requirements, however, can register as an Owner-Builder with their county building department. This exempts owners from the requirements to be licensed as contractors yet still allows them to obtain building permits.

In order to protect and inform consumers about the legal consequences of being a Owner-Builder, the law requires that each applicant must sign a Disclosure Statement provided by the county building departments.

This page discusses some of the major responsibilities and potential liabilities of being an Owner-Builder.

Government Agencies Ready To Assist You:
The state Regulated Industries Complaints Office (RICO) has jurisdiction over complaints relating to licensed or unlicensed contractors. Call the Consumer Resource Center at (808) 587-3222, press 3, if you have a consumer complaint. From the neighbor islands, call the state toll-free telephone number listed below. (You will then be asked to dial the last five digits of the state phone number you want to call, then press the # sign):

Kauai 274-3141
Hawaii 974-4000
Maui 984-2400
Molokai/Lanai (808) 468-4644

Call (808) 587-3222, press 1, for complaint history information and to check if a contractor is licensed.

For Building Permit or Owner-Builder information contact:

On Oahu
Building Department
City & County of Honolulu
Ground Floor, Municipal Office Building
650 South King Street
Phone (808) 523-4505

On Maui
Building Permits Section
County Land Use & Code Administration
250 South High Street
Wailuku, Maui HI 96793
Phone (808) 270-7250

On Kauai
Building Division
County Department of Public Works
4444 Rice Street, Suite 175
Lihue, Kauai HI 96766
Phone (808) 241-6655

On The Big Island
Building Division
County Department of Public Works
25 Aupuni Street, Room 106
Hilo, Hawaii 96720
Phone (808) 961-8331

This brochure is provided as a public service by the Pacific Resource Partnership in cooperation with the State of Hawaii Department of Commerce and Consumer Affairs and the County Building Department on your island. It is for informational purposes only, as a reference on certain matters pertaining to Owner-Builder exemption permits. It should not be construed as legal advice, and all information contained in this brochure is subject to change.

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