Tag Archives: Hawaii ADUs

ADU Landlord Tips: Preparing Your Lease (Part 1)



With your ADU construction, preparation, decoration, and landscaping complete, you’re almost ready to bring in renters. The new income to start paying off your investment and bringing in a little extra household income is so close you can almost taste it… but from this point, you are still one step of away from safely advertising your ADU as being ready for renters. It’s time to build your lease.

The Importance of a Well-Written Lease

To avoid the most common new-landlord mistake made in the industry, you are not going to use a cookie-cutter lease printed off the internet. While starting with one of these fill-in-the-blank forms is a reasonable way to build a frame for your lease, you absolutely do not want to just go with the default clauses. Not only do you want to make sure every clause actually relates to Hawaii rental law, you’ll also want to make a few adjustments considering that the ADU is on your property and is not a completely separate rental house.

The most important thing to realize about a lease is that it’s not a formality, it’s legally binding. You and your tenant will be obligated to meet any agreements, requirements, and restrictions stated on the lease and violations can potentially end in lawsuits, not just hurt feelings. Because nobody wants a misunderstanding or a lawsuit, it’s best to build your lease carefully.

Hawaii Landlord Laws

The first thing you need to make sure of is that your lease, and therefore your entire landlord/tenant agreement, is in compliance with Hawaii law. The best way to do that is to build your lease with the Landlord-Tenant Handbook open as you go from section to section. This covers everything from types of rental agreements to how to manage disputes. If you build your lease entirely based on this handbook, you should be reasonably secure from legal actions and will have a good baseline for handling negotiations. However, there are still a variety of policies that you will want to have a personal hand in deciding.

Rental Amount

Deciding the amount you’re going to rent your property for each month is a calculation every landlord must do for themselves. There are three numbers that go into this calculation: how much standard rent for your square-footage is on the current market, how long it will take you to regain your investment building the ADU, and what your tenants can afford. ADUs were approved initially to create affordable housing so consider pricing a little bit below the square footage standard.

Duration of Lease

Most leases are six months to a year in duration, meaning that your tenants are agreeing to stay for the entire time marked on the lease and pay rent for each month they are present. Six months is the shortest allowed rental duration for a Hawaiian ADU but if you have tenants you really like, you can increase the lease duration up to five years for long-term housing security for both families.

Damage and Security Deposits

The first thing to think about is what happens if the tenant accidentally damages your ADU. This is usually why most landlords take the equivalent of one months’ rent in a security deposit that will be used for any repairs for tenant-caused damages that the tenant doesn’t simply take care of themselves. Your cookie-cutter lease should include a workable damage and security deposit clause, but it’s up to you to decide how much to ask for as the security deposit.

Access to and Respect for Your Property

If you have not landscaped an entire separate yard and entrance for your ADU, or even if you have, you may want to throw in a clause about access to and respect for your property. This gives you the freedom to make it clear exactly how welcome tenants are to enjoy your backyard or if you’d prefer that they kept to the space you’ve designated to them. You can also define whether their security deposit will apply to the damage they may accidentally do to your property outside of the ADU yard.


Privacy and Due Notice

One of the most important aspects of landlord-tenant relationships is privacy and due notice. This means that you, as the landlord, promise not to barge in on your tenant’s privacy and will give at least a 24-hour notice and the option to reschedule before any inspections or maintenance appointments. Socialization does not require notice as long as you’re willing to accept normal social limitations for when one is welcome or not welcome as a guest. Along the same lines, you may also want to define a certain amount of privacy for your family because the ADU is so close to home.

Leases are both complex and important to how you will interact with your future rental tenants. In fact, this is only the first half of our overview of the basics of personalizing a lease for your property and preferences. Join us next time for the second half and if you’re looking for even more information on building and managing a new ADU, contact us today!


5 Tips for Building an Energy Efficient ADU

This entry is part 1 of 13 in the series Accessory Dwelling Unit


If you’re thinking about or already planning to build an ADU on your property, it’s important to remember that the cost of construction is only the beginning. The ADU will connect to your property’s water, power, and possibly gas hookups. Whoever lives there will add to your utility bills as if they were living in the main house, meaning your monthly costs will inevitably go up. This means that the more energy-efficient your ADU is, the lower it’s monthly utility cost will be. While there’s little you can do about water other than to have a well or collect rainwater (a whole new project all on its own), you can [amazon_link asins=’0979882001′ template=’ProductCarousel’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’ab5886f5-e67f-11e7-9b62-6fcd0550a544′]lower and even eliminate the power required to keep your ADU residents happy. Here are five tips to remember when designing and building your ADU that can help.

1) Insulation and Weatherproofing

The weather in Hawaii is notoriously nice but most modern families still prefer to turn on the AC when relaxing at home or preparing for work and school each day. This means that the more efficiently a home maintains it’s internal temperature, the more energy efficient it will be. To ensure that your ADU doesn’t leak AC, make sure that the home is fully sealed and well-insulated. Windows and doors that open wide are wonderfully breezy, but they should also have efficient weatherstripping so that when closed, they seal completely.

2) Central Air

A lot of homes have stop-gap cooling measures like window AC units or free-standing room heaters. Not only are these bulky, they’re also less efficient than a centralized air system with sealed ducts, clean vents, and a single well-built appliance managing all your cooling and occasional heating needs. The more streamlined your ADU design is, the less power it will use.

3) Low-Watt Appliances

Appliances come in a wide selection of quality and efficiency. No matter what kind of appliance you’re looking for, from [amazon_textlink asin=’B074BXLK17′ text=’washing machines’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’d6319d19-e67f-11e7-b5dc-2fc330d35f0b’] to water heaters, there will be options that consume less power for the same high-quality performance. With just a little bit of research, you should be able to fully equip your ADU with appliances that will combine into a significant reduction in power consumption for you and your ADU residents.

4) Solar Panels and Micro-Grid

Now that you’ve ensured that the ADU will consume the minimal amount of energy, you have the opportunity to have it compensate for its own power consumption, possibly reaching net-zero and removing the ADU from your power bill entirely. All you need is a modest solar panel array and a battery bank that can support the home’s power consumption overnight and maybe a day or two of clouds.

5) Smart Home

The final power-saving and incidentally delightful solution is integrating IoT smart home features. Wifi-controlled and programmable LED lights are not only more efficient, they can also be turned off from anywhere and turn themselves off when no one is home. A smart thermostat can ensure that the AC is never running when the house is empty. You can even install smart outlets to control normal appliances from your phone or on an efficient timer.

The more efficiently your ADU has been designed and built, the more inexpensive it will be to keep running comfortably and maintain in the years to come. From good insulation to lights that turn themselves off, with a little bit of forward thinking, you can reduce the amount of power your ADU consumes and possibly even generate all the power it needs to run every appliance in the home. For more helpful tips on building a new ADU for your family or rental use, contact us today!


How to Optimize Space In Your New ADU

This entry is part 2 of 13 in the series Accessory Dwelling Unit



Anyone who’s been looking into ADU designs recently has probably had to face a very stark truth: ADU’s are small. Unlike normal single-family homes, they are each limited to a certain maximum floor space size based on the total size of your lot. Unfortunately, floor space means that even if you decided to build up (to safe ground space), you would still only be able to build so much area worth of rooms. The vast majority of ADUs will be limited to a maximum of 400 sq feet of floor space. This is about enough room for one fairly tight bedroom, a full or 3/4 bath, and an open kitchen and living area. With traditional furniture and storage methods, this can get cramped pretty fast but with a few creative storage and design techniques, you can maximize the living space while remaining within regulation size.

Turning The Walls into Storage

The limitations on ADU size is based on floor space, meaning the area between the walls. But what about the walls themselves? rather than using up a hundred of your square feet for dressers, shelves, and cabinets, why not install them directly into the walls so the floor can be used for comfortable human activity? All you need is a little innovative carpentry to embed stacks of drawers, fold-out shelves, and hidden cupboards to store everything from tools to clothes to [amazon_textlink asin=’B003IKMSFE’ text=’kitchenware’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’4c0a9c72-e677-11e7-8743-7b58c1ee8f1f’].

Murphy Beds

The Murphey bed is a simple but effective engineering marvel already well-loved by apartment-dwellers. This design involves a bedframe with what appears to be a tall, recessed headboard. The bed can be folded vertically, with the footboard folding toward the ceiling, to embed itself into the wall, creating floor space for daily activities. With this method, you might be able to comfortably turn the master bedroom into a convertible study and/or fit one or two children’s beds into the living area to better accommodate a young family.

Roll-Away and Platform Beds

Roll-away beds are another innovation that can help you double bed space for floor space. A simple platform, perhaps made into a play area, can hide a full-sized children’s bed that is only rolled out for sleeping time. Platform beds, on the other hand, are out all the time but have either another roll-away bed or large drawers worth of storage underneath.

Ceiling Storage

While lofts will count against your floor space, simply choosing to store things hanging from the ceiling will not. By designing a vaulted ceiling, ladders, and hooks or brackets for hanging storage, you can give your ADU residents a lot more room for their things so the floor space is only occupied by daily activities. These can hold bicycles, potted plants, hanging cleaning supplies, even cabinets that lower themselves on electric rails if you want to go all-out.

Embed the Tech

How much floor space do you want to be taken up by standing lamps, entertainment centers, or [amazon_textlink asin=’B00FU3ZKN4′ text=’computer desks’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’c2ef2b3d-e677-11e7-a6db-f52111b67e20′]? You can plan for these features as well by embedding them into the walls. An entertainment center can fold out or you can leave a handy recess in the wall with convenient outlets and cable hookups for your resident’s media needs, maybe even with matching recesses for surround-sound speakers. Mount the lights on the walls and ceilings, and take the time to design a corner desk that doesn’t take up much room, once again near convenient outlets.

Most ADUs will be using their limited floor space for traditional furniture, storage, and beds but you can set the trend of optimized comfort and efficiency. Give yourself, your relatives, or your rental tenants the gift of elbow room with a creatively designed ADU, embedded storage, and beds that can be put away. For more advice on building perfect custom ADU, contact us today!


Just How Big is a 400 sq ft ADU?

This entry is part 3 of 13 in the series Accessory Dwelling Unit



Building an ADU on your property is one of the most beneficial things you can do for your neighborhood. It can provide cozy independent housing for retirees, extra housing space for family living with you, or provide a rental home for another family in need of affordable housing. However, building an ADU also comes with some specific limitations, one of which is how big your ADU can be in comparison to the size of your lot. Specifically, if your land is 3,500 square feet to 4,999 sq ft, the largest ADU you can build is 400 sq ft of internal floor space, including lofts. For larger lots, the upper limit caps at 800 square feet. But just how big is this in practical terms? How much walking space, how comfortable is the kitchen, and how many people can share the space without stepping on toes? 400 sq ft is small and 800 isn’t actually that much bigger.

Designing the Floor Plan

The key to building an enjoyable ADU is to understand exactly how much room you have to work with, then choose a floor plan that optimizes a comfortable lifestyle. In fact, the decision of floor plan is incredibly important to this process as you’ll need a design that fits well in your open yard space, is pleasant to live in inside, and suits the intended purposes. For a family, you’ll want to plan for private sleeping and clothing storage areas. For one or two retired elderly, a simple layout with plenty of wide spaces to move around in would be more convenient.

What 400 sq ft Looks Like on a Floor Plan

400 sq feet can be done in a lot of different ways depending on how you design it. The best way to think about a 400 sq ft is that it’s about the size of a two-car garage if square, and is usually about enough space for an open kitchen-living area, a full bathroom, and a one bedroom. The most important decision is how many walls to have. The fewer walls, the more open space you have, and most designs include an open kitchen and [amazon_textlink asin=’B00Q8EOLDY’ text=’living room’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’0b27d3ad-e679-11e7-91a2-bb3a906db448′].

Designed long, you can put the bedroom and bathroom on the ‘private’ end and the kitchen and living room together on the other. This is better for narrow yard space and separating privacy space from visitor space. Square designs can provide more open space, especially if you’re willing to put the bed in the living area. Then, of course, there are all your non-regular options. L-shaped houses and other odd variations may provide for the exact distribution of space and yard use you’re looking for as well.

What About 800 st ft?

Okay, now let’s say you have quite a large plot of land and double that amount of ADU floor space. Now you have room for a separate kitchen and dining area if you want it, but in most cases, you’re better off investing in an extra bedroom or two to accommodate families with children. With creative storage, [amazon_textlink asin=’B008BWESBQ’ text=’fold-away beds’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’9f02521b-e679-11e7-9647-5508a1e57c5e’], and maybe another 3/4 bath, you could now comfortably fit a family of four or five in your ADU as long as they don’t mind small closets. For fewer tenants, you might add a study, guest bathroom, and a larger master suite instead.

Building a welcoming, family-friendly ADU is more complicated than it seems. You want to think carefully about who will be using the ADU and how you can make optimal use of the space available. If you’d like more ideas on how to design and build the perfect ADU plan for your property, please contact us today!


5 Decisions to Make Before Starting Your ADU Construction

This entry is part 4 of 13 in the series Accessory Dwelling Unit



If you want a source of passive income and to do a community service at the same time, a rare opportunity to be sure, there’s no better option than constructing an ADU (accessory dwelling unit) on your property. This is Honolulu’s best answer to the increasingly pressing crunch for affordable housing and while there are some very specific rules, it’s a great chance for current homeowners to significantly increase the value of their property, provide a new home to family or renters in need, and enjoy the excitement of a new project literally in your [amazon_textlink asin=’B01FLO0TWI’ text=’backyard’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’6957f4aa-e67a-11e7-ba81-156c15ca43e3′]. However, before you start putting up timbers, there are a few important decisions you need to make.

1) Is the ADU for You, Family, or Renters?

The reason you’re building an ADU will shape every other decision you make, so you might as well start at square one. ADUs can serve a number of interesting, helpful, and profitable purposes depending on how they are used. If you (the homeowner) plan to move into the ADU and leave the main house for the family or high-dollar renters, the design should be fit to your personal needs. If the ADU is to house an overflow of family, consider their preferences and look into ohana housing instead, which has fewer regulations but isn’t as versatile if the family moves out. Finally, if you’re planning for renters, you’ll want the ADU to be as welcoming as possible for anyone who might move in.

2) Would it be better Attached or Detached from the Main House?

You may not have realized it, but ADUs can absolutely be built as an attachment to your main house. In some cases, this may be the only way to achieve the required number of parking spots or fit the second dwelling onto an oddly shaped lot. That said, attached ADUs are more ideal for the family as you’ll be living in close proximity, along with sharing a wall and possibly a door to the main house. For ADUs you plan to rent or plan to eventually be able to rent, later on, it would be better to build a detached dwelling for added privacy and personal space.

3) Are You Prepared for a Very Small Dwelling?

ADUs come with a maximum size restriction depending on the square footage of your lot, and these can be pretty darn small. If your lot is between 3,500 and 5,000 sq ft, your ADU could have a maximum size of 400 to 800 sq ft. That may be smaller than you’re imagining. With 400 sq ft, there’s usually enough room for one bedroom with a full to [amazon_textlink asin=’B01KGRAHJ0′ text=’queen sized bed’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’93f69a54-e67a-11e7-934c-89a72daf9e9d’], a compact kitchen/living/dining area, and a small bathroom. Once you know how big an ADU you can build, take a walk through a few models and existing homes around the same size to really get a feel for the functional size of the home. That said, people have reported living comfortably in less than 200 sq ft.

4) Can You Convert an Existing Accessory Structure?

If you have a large shed or well-built workshop already on your property, there’s a chance that you might be able to convert this into all or part of your new ADU. For this to be a viable option, the accessory structure needs to be sturdy and capable of being upgraded to good quality living conditions. You’ll need insulation, real walls and floors, a kitchen, and a bathroom along with the necessary power, water, and possibly gas connections. It may just be easier to build a new structure, perhaps even making room by knocking down the old shed rather than repurposing it.

5) Do You Want to Go “Off-Grid”?

One of the really nifty options for a brand new ADU is the ability to go ‘off-grid’. What this means for most is solar panels. Big ones, with enough battery power to ensure that the lights and water heater work at night as well. You can even install a rainwater collection and filtering system but we suggest keeping the water pipes even if your ADU is power independent. An off-grid ADU will cost a little more to make but for the rest of its life will add nothing to the power bill. If you’ve got the money to invest and love the idea of renewable energy, this could be a great ADU choice that will, incidentally, also raise its value as a rental property. While you’re at it, throw some solar on the main house, too.

Here at Owner Built Designs, we specialize in making your Honolulu ADU dream a reality. For more helpful tips on designing the perfect ADU for you, your family, and your property contact us today!


The 9 Basic Requirements for Building an ADU in Hawaii

This entry is part 12 of 13 in the series Accessory Dwelling Unit


Since the dawn of property ownership, people have been building smaller dwellings near their pre-existing homes. In Australia, they call them Granny Flats, in certain parts of the continental US, they’re called Mother-in-Law houses and here in Hawaii, the official term is ADU, short for Accessory Dwelling Unit. Like the acronym says, these are little homes that act as complete residential unit accessories to a main house on a shared property. Theoretically, anyone can build an ADU simply by making a nice addition or building with a kitchen, bedroom, and bathroom but officially there are certain legal guidelines for an approved ADU construction. Before you break out your [amazon_textlink asin=’B0033BLWPA’ text=’carpentry tools’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’f1717607-e67b-11e7-90ea-89d236139fc9′] or call a contractor, make sure your home and plans conform to the 9 basic requirements for building an ADU.

1) Proper Zoning

Zoning in Hawaii and knowing your exact zone can be a little tricky and ADUs can only be built in six specific zones. Before even thinking about building one of these tiny separate houses, make sure to check your lot’s zone by address and ensure that it matches one of the following:

  • R-3.5
  • R-5
  • R-7.5
  • R10
  • R20
  • Country District

2) Lot is At Least 3,5000 Square Feet

To ensure that there is plenty of room for your ADU, anyone who wants to build one needs to have a house lot that reaches at least 3,500 square feet of space. Fortunately, your original house is allowed to sit on some of it. Rather than breaking out the incredibly long measuring tape, you can check your lot’s size online to figure out if you qualify. Bigger is always better, and you’ll find out why with point nine.

3) Lot is Not Landlocked

To build an ADU, your lot will need to actually make contact with the road. Due to certain access requirements, a landlocked lot cannot hold an ADU. However, you can have an ADU if your lot is connected via driveway to the road by way of an easement through another closer lot. Flat lots are also perfectly fine.

4) Lot Has One Current Dwelling

You cannot build an ADU unless there is only one complete dwelling on your lot. This means that duplexes, apartment buildings, and lots that already have two or more homes on them cannot build an ADU. However, renovated apartments above the garage or in the basement are just fine as long as they’re not legally a second dwelling.

5) Owner or Family Lives On the Lot

To qualify for ADU construction, the homeowner or at least one member of their family needs to live on the lot when the ADU is complete. This means they can either live in the main house or the ADU based on preference, as long as the owner or a family member is in residence. You are allowed to rent out whichever building you’re not going to live in.

6) Record Your Covenants

When you do build an ADU, you are required to record covenants with the land with either the Bureau of Conveyances or the Land Court of the State of Hawaii or both. This ensures that you will never sell the ADU separately from the rest of the property and the lot cannot be subdivided into two separate properties. There are also other related rules in the Declaration of Restrictive Covenants.

7) No ADU Covenant Restrictions

Check any private covenant signed for your land to ensure that it doesn’t prohibit an ADU. If you have already agreed not to build one, starting [amazon_textlink asin=’1600852467′ text=’construction’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’cc021150-e67c-11e7-8001-37dd20bbf9c8′] now would be both illegal and quite silly. However, you may not be aware that the prohibition exists to make sure to check with your HOA to be sure.

8) Room For One More Parking Space

An ADU is officially an entirely separate second dwelling and because of this, it’s expected that the resident is likely to have their own car. Therefore to build a legal ADU, you’ll need room within the lot’s parking areas for one more parking space than your lot’s minimum spaces unless the edge of your property is within a half mile of a rail station.

9) ADU Plans Meet Maximum Size

The maximum square foot size of your ADU is limited by the square footage of the lot itself. For a lot at the minimum size of 3,500, your ADU can only be 400 square feet. For just under 5K, it can be up to 800 sq-ft, and for lots above 5K, you can have a much larger ADU.

By the end of this list, you should have a fairly good idea of whether or not you’re legally allowed to build an ADU on your property in addition to your single-family home. If you do decide that an ADU is right for you, your lot, and your family contact us today! We’ll be happy to help you figure out the next steps.


What’s the 411 with Hawaii ADU’s: The FAQs Continued

This entry is part 7 of 13 in the series Accessory Dwelling Unit

If you live or even occasionally visit [amazon_textlink asin=’1628873140′ text=’Hawaii’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’b9643ab7-a226-11e7-ae93-0f338484ecd1′], you’re probably already aware of the intense housing crunch going on, especially when it comes to affordable rental properties for working families. While [amazon_textlink asin=’B015PA9VI6′ text=’homelessness’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’fb46d656-a226-11e7-9b2b-b347f01db0bd’] is usually something that happens to people who can’t or won’t work, it’s an unfortunate fact that many families are finding themselves without proper lodgings because there simply aren’t enough homes to go around. For this reason, Honolulu has recently authorized home-owner residents to build small secondary residential homes on their property in order to rent to families in need. These residences are known as Hawaii ADU’s or Accessory Dwelling Units and are a great way for home owners to both alleviate the housing crunch and make a little extra money for their own mortgages.

In a previous post, we covered a few of the FAQs about ADUs from defining our terms to how they compare to ohana units. Today, we’re picking up where we left off to answer more important questions about how you can contribute to the local effort against homelessness.

Frequently Asked Questions Pt 2:

Q: Are owners required to live on the property?

The short answer here is yes, but in truth, it’s a little more complicated. You cannot rent both the main house and the ADU at the same time, but the named owner doesn’t necessarily have to live on the property. In order to rent your ADU, the main house needs to be occupied by a relative by blood, marriage, or adoption to the property owner. However, a designated authorized representative is also allowed.

Alternately, you or a relative can choose to live in the ADU and rent out the main house, which also counts as using your ADU to alleviate the housing shortage. This is a great option for retirees who want to downsize for ease of lifestyle without leaving their family home behind.

Q: Is there a minimum occupancy period for each ADU tenant?

In order to ensure that Hawaii ADU’s are actually being used to help with the housing problem, tenants need to stay at least six months (180 days to be specific) with each lease. This prevents both landlords and tenants from misusing it’s intended purpose, but that also means that it’s inadvisable to Airbnb your ADU between tenants.

Q: Is there enough local sewer and water capacity?

It’s true, not every neighborhood has the infrastructure available to support doubling up on sewer and water needs. For this reason, you’ll need to get approval from all the usual sources including the Department of Planning and Permitting, Wastewater Branch, Traffic Review Branch, State Department of Health, Board of Water Supply, and the Honolulu Fire Department. If they all agree that a new residential structure is OK, you can proceed with building plans.

Q: How much parking is required for an ADU?

Hawaii ADU’s only require one off-street parking spot. This sets them aside from ohana units which require two and therefore permits home owners with smaller yards to contribute to the housing effort.

Q: How big can Hawaii ADU’s be?

It may be tempting to build yourself a near-duplex residential buddy, especially if you have the yard space to spare, but ADUs are, in fact, limited in size based on the size of your lot.

  • Lots 3500 – 4999 square feet can have an ADU of up to 400 square feet
  • Lots 5000 square feet and up are limited to an ADU of 800 square feet.

Q: How many ADUs can I build?

The answer here is only one, but it’s slightly more complex in practice. ADUs fill a secondary residential slot, but can only do so if you don’t already have a secondary residence on your lot. Therefore ohana dwellings, guest houses, and multifamily dwellings like duplexes disqualify a lot from having even a single ADU.

If you’re considering building an ADU on your lot, you’ll need an expert designer who can get your plans through approval the first time around. I have decades of experience and specialize in permit-ready drawings and would be delighted to ensure your ADU project hits the ground running. Please contact me today for more information or plans to build!


How Hard Is It To Be An Owner Builder And To Act As Your Own General Contractor?


A typical property owner who wants to embark on an ADU project as an owner-builder finds the advantages very compelling – reduced project costs followed by a new revenue stream from rental income, potential tax benefits, and increased property value. However, there are pitfalls that can quickly erase or seriously postpone the hoped-for gains.

In many ways, an owner-builder is essentially his or her own general contractor, so one has to comply with the same laws that a licensed general contractor does. In Hawaii, owner-builder permits are exclusive to [amazon_textlink asin=’0470540834′ text=’residential construction’ template=’ProductLink’ store=’ownbuilddesig-20′ marketplace=’US’ link_id=’20fe40ea-a226-11e7-a8fa-65b7c06059ee’] – they are not available for commercial or industrial projects.

Once you are granted owner-builder status, you can proceed with your project without a licensed general contractor. However, you are responsible for ensuring that all work is “up to code,” and that all building inspections occur as required.

1 Year Wait for Sale or Lease

There is one key difference between the owner-builder and a licensed general contractor. Unless the value of permitted work is less than $10,000, an owner-builder cannot sell or lease, or attempt to sell or lease, the structure for one year. There are two exceptions when 1) a sale or lease during the first year is to the owner builder’s employee, or 2) a hardship exemption is granted by the Contractors License Board.

Risks and Responsibilities

Success as an owner-builder hinges on maintaining a laser-sharp focus on pertinent detail, along with full adherence to regulations. To that end, the Regulated Industries Complaints Office (RICO) has published a guide for owner-builders entitled “Risks and Responsibilities of Being an Owner-Builder.” RICO is a part of Hawaii’s Department of Commerce and Consumer Affairs.

Here are some key risks and responsibilities for owner-builders:

Licensing – The subcontractors you hire must be properly licensed. For example, electrical and plumbing contractors must be licensed under Chapter 444 of the state statutes. Whether you intentionally or unwittingly hire an unlicensed subcontractor, you could find yourself paying the medical expenses of an injured worker affiliated with that unlicensed entity.

Finally, it is important to beware of unlicensed project managers. Sometimes, an unlicensed individual “assists” an owner-builder to the point that he/she is, in effect, managing the project. In such a scenario, the owner-builder assumes responsibility for the activities of this individual.

Worker status – Any person who is not either a subcontractor or working for one is your employee. Therefore, some owner-builders have to withhold federal (FICA) and state income taxes. They also have to maintain workers compensation insurance policies.

Timely payments – An owner-builder is responsible for making timely payments to all suppliers and contractors involved in a project. An owner-builder who fails to do this may find that a lien will be placed on the property by any unpaid vendors or contractors. A lien effectively prohibits the completion of a sale of the property until the supplier or contractor is paid. Interest and other costs may add significant sums to the amounts owed.

Recordkeeping – State law requires an owner-builder to maintain records related to the project for up to three years, including:

  • Copies of building permits
  • Copies of contracts with all persons involved in the project
  • Proof of payments to employees, subcontractors, and suppliers

Dire Consequences for Violations

RICO advises prospective owner-builders to carefully read the owner-builder permit application. They are also advised to read Chapter 444 of Hawaii’s revised statutes.

Non-compliant owner-builders may face severe sanctions:

  • A fine of either, 1) $5,000, or 2) 50 percent of the permit value of the work to be performed, whichever is greater
  • A prohibition against filing for new owner-builder permits for a period of three years

Repeat violators face even harsher penalties. They are subject to the greater of 1) a $10,000 fine or 2) 60 percent of the permit value of the work to be performed.

At Owner Built Design LLC, I help owner-builders avoid the expensive consequences of non-compliance with laws and regulations. For prompt, friendly and professional assistance, please contact me today!