Penalties for violating State law. The fines for violating State owner-builder laws are steep – homeowners
who fail to comply with owner-builder requirements can be fined up to $5,000 or 50% of the permit value of the
work to be performed, whichever is greater. Subsequent violations can result in a fine of $10,000 or 60% of the
permit value of the work to be performed, whichever is greater. Homeowners who violate the owner-builder
requirements are also prohibited from applying for new owner-builder permits for three years.
Can I hire anybody to work on my project? It’s an owner-builder’s responsibility to make sure anyone
working on the project is properly licensed. This includes architects, engineers, subcontractors, electricians, and
plumbers. As the owner-builder, you are also responsible for supervising, scheduling, and paying them. Any
person working on the project who is not working as a subcontractor must be an employee. As the employer,
the owner-builder is required to comply with employment and tax laws, which includes deducting Federal
Insurance Contributions Act (F.I.C.A.), withholding taxes, and providing workers’ compensation. Again,
electrical or plumbing work requiring a license must be performed by licensed contractors, electricians,
and plumbers.
Can I hire someone to manage my project? Be wary of "consultants,” “construction managers,” and other
unlicensed individuals who may try to talk you into becoming an owner-builder as a way to save money. As the
permit holder, you are responsible for the project and must supervise the construction. The bottom line: as an
owner-builder, responsibility for the project shifts to you.
YOUR POSSIBLE RISKS…
Mistakes can be costly. Like anything in life, there’s a lot to be said for experience. Unless you’re
knowledgeable about construction, mistakes can be costly and can result in delays and additional expense.
Avoid liens. A subcontractor or supplier who doesn’t get paid on time may file a mechanic’s lien against your
property. Educate yourself about mechanic’s liens and learn how to prevent them.
Ouch that hurts. If an employee is injured, you may be required to pay for medical care and rehabilitation costs.
You may also be responsible for any injuries sustained by an employee of an unlicensed subcontractor.
Insurance. As an owner-builder, you should be aware of the requirements and legalities involved in properly
insuring your project, including injuries to employees and subcontractors working on your job.
You are restricted from selling or leasing the structure for one year. If you build under an owner-builder
permit, you cannot sell or lease (or even offer to sell or lease) the structure for one year after it’s completed.
What should you do? Start by reading the owner-builder permit application carefully and reviewing Chapter
444 of the Hawaii Revised Statutes. Talk to your insurance company or agent about coverage for both worker’s
compensation and general liability issues Monitor the job and keep required records…remember, you’re
responsible for every phase of your project and its integrity. And, remember, the buck stops with you. If you
aren’t satisfied with the final product, there’s no one to complain to but yourself.
Resources
The Department of Commerce and Consumer Affairs (DCCA), and its Regulated Industries Complaints Office (RICO), offer
tools, tips, and services you can use to check out an individual or business. Information is available by calling (808) 587-
4272 or online at cca.hawaii.gov/businesscheck. For information about filing a complaint or to report unlicensed activity,
call RICO’s Consumer Resource Center at (808) 587-4272 or visit us online at cca.hawaii.gov/rico. To call Oahu-RICO,
dial the following toll free numbers: Kauai 274-3141, extension 74272; Maui 984-2400, extension 74272; Big Island 974-
4000, extension 74272; Molokai and Lanai 1-800-468-4644, extension 74272, followed by the # sign.
This brochure is for informational purposes only and not intended for the purposes of providing legal advice. Information provided is
subject to change.
(rev. 190718-CLB-Owner Builder)