Owner-builder or hire a contractor: what actually changes

An owner-builder is the owner who acts as the contractor: you pull the permit in your name, and you either do the work or you hire the people who do. Hiring a general contractor means that firm holds the contract for the job and, where the state requires it, the license. The permit question is related and separate. Rules differ by state. California publishes the warning in the plainest language, so that is the example below. It is not your state's statute until you check.

What California tells you to watch

The Contractors State License Board says to be wary of consultants or unlicensed people who talk you into becoming an owner-builder to save money. In the board's words, they are usually the ones who illegally profit from that arrangement (CSLB, owner-builder risks).

• You take the project. The board's downside page says an owner-builder assumes responsibility for all phases of the project and its integrity (CSLB).
• Unpaid people can lien the house. The same page says subcontractors and suppliers who are not paid on schedule may file mechanics liens. The homeowner steps are in lien waivers.
• Injuries can land on you. The board says that if workers are hurt, or if subcontractors are not licensed or do not carry liability or workers' compensation insurance and they are hurt, you could be asked to pay through a homeowners policy or face lawsuits. That is a reason to read insurance for a home remodel before you sign an owner-builder form.
• The license exemption has conditions. California puts them in Business and Professions Code § 7044 (statute). Read that section before you sign the form at the permit counter. Do not rely on a salesperson's summary of it.

What changes when you hire a contractor

You still own the house. You still care whether the permit was pulled and whether the inspections passed. See what to confirm about a permit. What changes is who is scheduling the trades, whose license is on the job, and whose insurance certificate you can ask for. Look the license up. The steps are in check a contractor's license and insurance.

Hiring does not remove the red flags. Someone who offers to "just be your consultant" while you pull an owner-builder permit is the pattern the California board describes. Ask them to bid the job on their own license instead, in a written contract.

Questions to settle before you choose

• ☐ Whose name is on the building permit, and who calls for inspections?
• ☐ If anyone on the job is not a licensed contractor, who is their employer, and who carries workers' compensation?
• ☐ Who pays the subcontractors and suppliers, and which lien waiver you get with each payment?
• ☐ What your own insurer says about you acting as the contractor, or about moving out during the work?
• ☐ Whether you will send the same written scope to more than one licensed bidder if you decide not to run the job yourself?

The meeting questions, if you hire, are in questions to ask a remodel contractor.

Keep the choice in writing

Whichever way you go, write who pulls the permit and who holds the contract. RenoBinder keeps that scope next to the budget. One room is free.

This is general information, not legal advice. Rules vary by state; for a dispute, talk to a licensed attorney or your state contractor board.

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