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Owner-builders assume liabilities for home-improvement projects

Updated April 6, 2020

If you are a homeowner, you may obtain owner-builder permits if you plan to do your own property improvements. For your protection, you should be aware that as an owner-builder, you are the responsible party of record on the permit.

As a homeowner doing your own work, the structure must not be intended or offered for sale within a 12-month period following the construction, according to state contractors law. Licensed contractors frequently attempt to have the owner of the property obtain an owner-builder permit, erroneously implying that the owners are performing their own work. Property owners should be aware that if a contractor offers them this scenario, it may not be in their best interest. California State Law requires that when an active licensed contractor obtains a permit, the contractor must provide the City with a copy of his current workers compensation insurance, if the contractor has employees.

The City requires the contractor to maintain a current City business license and his license status is checked before issuance of a permit.

When a permit is issued, the person who signs as the contractor or owner-builder is on permanent record certifying that the structure is in compliance with all City ordinances and state laws relating to building construction.

Warning to homeowners

If you obtain a permit for a contractor who is doing the work and the contractor does not have current workers compensation insurance for his employees, you could be liable should one of the employees get hurt on your property. If the contractor cannot or will not play for the medical expenses, you may be responsible and may have to pay as the owner of the property.

At the conclusion of the job, before the contractor receives final inspection from the City, he must provide to the City a list of all subcontractors who worked on the job along with their current City business license numbers. If you pay the contractor before final inspection from the City, you may not be able to get the contractor to take care of the subcontractors' licenses. And if City licenses are due, you may have to pay them yourself.

Also, if you are documented as an owner-builder on permits to save the contractor time to save yourself money, you should be aware that should any litigation arise relating to the work, the contractor may be free of responsibility, especially if he cannot be located or has gone out of business. Since you signed the permit, it is up to you to defend the work. You should protect yourself from possible liability and have the contractor obtain the permits. Otherwise, what you thought would save you money could cost a lot more.

These are a few items for homeowners to note. It is always a good idea to check with the State Contractors License Board for a contractor's history and license status, and to check out references on the contractor.

Please contact the City's Building and Safety Department at (562) 916-1209.

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