Every year thousands of people apply for Contractor Licenses in the state of California.
Many are qualified tradesmen, but some are homeowners with questionable construction backgrounds.
In this article, we will discuss applying for a contractor license as an owner-builder and what this means for you.
What does “Owner-Builder” mean?
The term owner-builder refers to a property owner that acts as their own general contractor.
This may be a property manager or a homeowner that may or may not have a construction background but does work themselves or hires subcontractors to complete tasks.
Depending on the nature of the work the validity of the documentation, it is possible for owner builders to use their experience to get a General Contractor License
Can I build my house? – Responsibilities of an Owner-Builder
Anyone can build or remodel their home.
In California, there are guidelines for non-licensed owner-builders making alterations to their property.
These laws are put in place to protect the public. If a home is not built correctly, it becomes a safety hazard to its surrounding area.
- The project site must be their principal place of residence for at least 12 months before construction
- Owner-builder cannot construct and then sell two or more structures during a 3-year period
An Owner Builder is responsible for
- Pulling Permits
- Scheduling Building Code Inspections
- Ordering Materials
- Paying Suppliers and sub-contractors
- Ensuring Job Site Safety
- Supervising, scheduling, record keeping, and accounting
Using anyone other than a licensed subcontractor means that you are considered an employer.
By law, employers must register with the state and the federal government.
In addition, you must file the necessary
- Taxes and Workers Compensation
- Unemployment Compensation
Construction permits differ from state to state and county to county.
Your particular area may be stricter when it comes to who can pull building permits and who cant.
One of the main benefits of hiring a licensed general contractor is that they are knowledgeable in this process and can make sure it gets done the right way.
Learn more about Building Permits!
Risks as an Owner-Builder
You have to understand the risks of proceeding as an owner-builder.
Unless you are knowledgeable and experienced in construction, it is probably not a good idea to oversee your own project.
You will be 100% responsible for the entire construction process, any mistakes can be costly and dangerous to your home.
- Subcontractors and suppliers can file mechanics liens against your property for late payment.
- Not fully understanding this process can quickly become a lot more than you bargained for if you do not fully understand this process.
Injuries on your property
As an owner-builder, you will be held 100% liable for any injuries that occur on your property if your subcontractors aren’t licensed or do not have liability insurance.
Part of a General Contractor's job is to ensure job site safety.
If you are a homeowner that is not experienced or has never been on a job site, it is best just to hire a professional.
You can quickly be on the hook for medical bills and rehabilitation if someone gets hurt on your property.
Learn more about workplace safety and OSHA Certification!
Home Owners Insurance for Owner-Builders
- Injuries to workers and subcontractors will be paid for through your homeowner’s insurance.
- Owner builders can also be sued for failing to maintain a safe job site or adhering to EPA and OSHA Safety standards.
- In some cases insurance companies will not cover injuries on job-sites where there was no licensed contractor.
- There are many shady individuals who pose as construction consultants, offering to guide homeowners on the owner-builder process.
- When it comes building or remodeling your home, saving money shouldn't be your number one concern
Owner Builder vs. General Contractor
If you are a homeowner looking to save money on a big renovation by doing the work yourself, remember that this is where you live.
There are a lot of things that can go wrong.
Hiring a professional to do remodels is not only crucial for your safety but also adds to the value of your home.
Do your research and find a reputable General Contractor if you are not 100% confident in your abilities to execute the project correctly.
General Contractors are:
- Have passed FBI background checks
- Have passed California LAW and TRADE examinations
- Typically hold workers compensation and liability insurance
General Contractor License Requirements
Many applicants each year apply for licenses using experience working on their own homes.
The General Contractor license has some basic requirements:
- At least 18 years of age
- Social Security or ITIN #
- Driver’s License or USA Issued ID
- Four Years Journey Level Experience
- Not currently on Probation or Parole
For an in-depth look at the General Contractor License, check out this article.
Typically, owner-builders applying for the General Contractor license meet all the requirements except for the 4 years of journey-level experience.
Many people think they have journey-level experience.
However, doing minor fixes and handyman work is very different than overseeing a complete construction build or remodel.
Remember, applications are processed on a case-by-case basis and what works for one person may not work for another person.
When proving your experience, the CSLB may ask for documentation including:
- Material Order Invoices
- Pay stubs for subcontractors
- Building Permits
- Any other documentation supporting your experience
Experience review process
Contractors State License Board
What will happen is, someone at the CSLB reviewing your application will determine if the documentation you provided equals 4 years of journey-level experience.
It is entirely up to the state board and more specifically the person reviewing your application.
Certification of work experience
- The Certification of work experience is the portion of the application that breaks down your qualifications.
- In addition to the 4 years, you will need a signer or “qualifying individual” to sign for you.
- This person is verifying that you know all of the core trades associated with the General Contractor License which are:
If you are an owner builder, maybe this person is one of your subcontractors, or perhaps another general contractor.
You have to be prepared for the CSLB to question this person’s ability to identify construction knowledge.
Again, all of this is on a case-by-case basis and largely depends on the individual.
To get a copy of the Contractor License application click here.
Getting a Contractor License as an owner-builder is not impossible, but you will have to keep proper documentation of work done on your house.
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