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.