Tag Archives: responsibilities for owner-builders

Questions to Ask Before Starting a Major DIY Home Renovation or Addition in Hawaii

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This entry is part 3 of 4 in the series Pinterest

If you watch very many home renovation shows, you have seen the good, the bad, and the ugly when it comes to adding to or renovating a house. Some of those shows may have fueled your interest in tackling a major home renovation or addition on your own home in Hawaii. Before you follow through with any grand plans you might have, here are some questions to ask yourself about how ready you are.

Questions to ask about your knowledge and skills

Do you understand everything that needs to be done to complete the renovation/addition?

Renovations and additions are more than just tearing things out and putting other things up. Depending on your project’s scope of work, there may be some work that requires the skills and knowledge of a contractor who has been trained to do the work – like electricians and plumbers. Brainstorming all the possible work will help you get a better understanding of what needs to happen to make your project successful.

Does the project require extensive knowledge and skills?

Some parts of a DIY project are simpler than others, like painting a room or installing new doors. Others, like structural changes, new wiring or plumbing, can get complicated and require more knowledge and skills than you currently have. Be honest with yourself about what you are capable of taking on versus what needs to be done.

What zoning restrictions or local building codes do you need to be aware of? What work can you do without a permit?

No one city or state in the United States has exactly the same zoning restrictions, building codes, or permitting process. Hawaii, in particular, has specific codes, restrictions, and processes for obtaining permits that are designed to preserve as much of each island’s natural beauty as possible for those who live on and visit them. Some places may differ on what work needs a permit, but in Hawaii, most major home renovation or addition projects will require them because of regulations that require any project with more than $1,000 worth of work to be permitted.

Do you have enough time to complete this project?

One of the biggest reasons why some major DIY projects fail to be completed is because the homeowner underestimates the amount of time and effort it will take on their part to finish. Having the skills to take on a project accomplishes nothing if you do not have the time to devote to making sure the project is done right.

What is your budget and do you have room for it to absorb the cost of something happening on the project that you were not expecting?

Before you attempt any kind of DIY project, you should know how much money you have to devote to completing it, as well as how much room there is in your budget in case it takes more time or issues come up.

Will the savings be worth not having it done professionally?

Sure, you can do the work on your own and probably save money doing it, but what will the work be worth in the end? If the project is not done well, it may have to be redone in a few months or a few years and could cost you more, in the long run, to get it done correctly.

Questions to ask about your personal situation

Do you enjoy performing physical labor?

Construction work requires a lot of physical labor. Think about how you feel about doing it before you commit to a major renovation or addition to your home.

Are you a patient person?

A lot of situations come up over the course of a major project like a renovation or addition, with some creating more stress than others. When you are considering an extensive DIY project on your home, look carefully at how patient you are in stressful situations.

Do you finish what you start?

Are you the kind of person who starts things and never finishes them? Major home renovation and addition projects require a high level of commitment in order to complete, so take that into consideration.

How does your family feel about the project?

Before you get started on a DIY project, check in with your family to see what they want and how they feel about it. They are going to be your biggest support system, and you need them on board with you.

What is your conclusion?

Maybe your answers to these questions were an encouraging sign. Maybe they made the prospect of adding to or renovating seem too daunting. Either way, we are here to help you make your home the perfect fit for you and your lifestyle. Our expertise is in designing the spaces you need and creating easy-to-follow, permit ready plans so you can take on a project like this by yourself.

Contact us today for more information.

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What are the Risks & Responsibilities of Being an Owner-Builder in Hawaii?

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Construction costs are soaring across the country, but Hawaii remains one of the most expensive places to build or add to an existing home. Becoming an owner-builder is a cost-saving solution some homeowners are actively considering in order to make their dream home a reality.

If you are thinking about going that route, you may want to know what an owner-builder is and what will be required of you if you become one.

What is an Owner-Builder?

According to the State of Hawaii, an owner-builder “is a property owner [or lessee] who has an owner-builder permit from the county to build or improve residential or farm structures for use either by the owner or his/her grandparents, parents, siblings or children.” This just means you can (with the right permits) build or make improvements on a residential property you own or rent for yourself and your family to use.

Why You Would Consider Becoming an Owner-Builder

The biggest reason people consider taking on the role of an owner-builder is financial. Getting a general contractor (or GC) to do the work can be an expensive proposition when construction costs are only climbing higher. If doing the work can save money, they want to do that instead.

Another thing you will need to consider is how much control you want over the construction process. If you think you can handle all the work that being an owner-builder entails, it might be worthwhile for you.

What You Are Responsible for as an Owner-Builder

When you become an owner-builder, you are taking on the role a GC would normally play in building or adding to your home. This means you are responsible for everything a GC would be responsible for if they did the work. That includes:

  • making sure you comply with all of the laws and rules licensed contractors are required to comply with;
  • supervising the construction work yourself;
  • hiring all of the subcontractors who will be completing the work and making sure the subs are licensed (especially important for electrical and plumbing contractors because they cannot perform a job without being licensed in Hawaii);
  • purchasing materials for the project and coordinating deliveries so they arrive in time for your contractors to do their work;
  • ensuring all of the work done on your home is up to code and passes inspection; and
  • keeping accurate records of everything that happens on the construction site

There is (Much) Risk Involved with Becoming an Owner-Builder

An Owner-Builder who is knowledgeable about construction in Hawaii is the exception, not the rule. When you decide to take on this responsibility on, you are accepting certain risks (some much greater than others), like:

  • Additional expenses that can blow your budget and significant delays because of things you do not know;
  • Not being able to hire the best subcontractors because some will only work with general contractors;
  • Subcontractors and suppliers putting a lien on your property if you do not pay them in a timely fashion;
  • Paying out of your pocket to replace materials that have been damaged because of fires/accidents/vandalism/etc. or for medical care for workers who have been injured in these types incidents because you have not taken out the right insurance policies;
  • (in Hawaii) Not being able to sell or lease what you have added or built for at least a year after you’ve finished the work;
  • (also in Hawaii) Not having access to the Contractors Recovery Fund if something goes wrong while the structure is under construction because the Contractors Recovery Fund is not available to owner-builders; and
  • having to pay penalties and fines for not complying with the requirements for an owner-builder.

How Owner Built Makes Being an Owner-Builder Easier for You

We’ve been doing residential design and engineering work on the island of Oahu for nearly thirty years. Our focus is on creating permit-application ready drawings that are easy for you to understand. You want to build spaces for your home that your family will use for years to come, and we want to help you do it well.

If you have any questions or are ready to start building, contact us today.

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

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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 residential construction – 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!

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