California building laws allow property owners to serve as their own general contractor on construction jobs undertaken at their residence. In this role, property owners either do the work themselves or hire employees (subcontractors) to do the work. This is known as being the "owner-builder."
To be considered an owner-builder, you must meet the following state requirements:
- You must own the property;
- The property must be your principal place of residence for 12 months prior to completion of the work;
- You cannot construct and then sell more than two structures during any three-year period.
There are a number of important issues to consider before choosing the owner-builder route. In addition to meeting the eligibility requirements, you must assume full responsibility for all phases of your project and its integrity. That means you must:
- Do paperwork and pay fees to receive permits
- Order materials and making sure all suppliers are paid
- Supervise, schedule, and pay subcontractors
- Register with the state and federal governments and follow labor laws if hiring anyone other than a licensed subcontractor
- Accept all liability and provide proof of liability insurance
- Make sure all work meets local, state, and federal requirements
Given all the skills, time commitment, and liability involved, why would someone choose to be an owner-builder?
Some individuals believe they will save money if they do the work themselves. However, financial benefits are debatable once you factor in what your time is worth and any time/money lost because of lack of experience or knowledge.
Others are talked into filing as "owner-builder" by unscrupulous "consultants" or unlicensed individuals who will try to talk you into becoming an owner-builder as a way to save money. They are usually the ones who illegally profit from this arrangement.
Some owner-builders are do-it-yourself'ers who embrace challenges, enjoy the construction process, and/or want to make their home truly personalized. While these qualities are admirable, they do not guarantee a successful project.
"Owner-builder" projects work best when the owners know what they are doing, in every sense of that phrase. Owner-builders need to know how to navigate the permitting process and how to manage multiple contractors. If they are doing some of the work themselves, they need to have the right technical skills and know how to apply those skills while meeting all local, State, and Federal code requirements.
Finally, successful owner-builders need to have the time and money to see the project through despite the inevitable bumps in the road.
All home construction projects are stressful. Those that drag on for months or years are not just annoying and expensive but also potentially dangerous.
We live in a world where reality shows and lifestyle magazines make DIY projects look easy and inexpensive. The true reality is that doing a construction project yourself is a serious job that could take 40+ hours per week depending on the project complexity. It's a job that draws from your bank account rather than adds to it. And it's a job that requires you to follow the rules, even if you don't agree with them. After all, the end-result of your job is the safety of anyone and everyone who steps onto your property.
City staff will help you through the permitting process as appropriate. But our role is not to help you design your project or find the right subcontractor or relax building standards because you're out of time and over-budget.
So before you dive into as an owner-builder, really think about where your talents and interests lie. How do you want to spend your time? Are you willing to accept responsibility for the safety of anyone who visits or lives in your house?
We'll see you at the Counter!
Owner-Builder projects work best when the owners have construction skills, experience managing complex projects, and ample time to devote to the project.
by Doug Hughes, Chief Building Official