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Owner / Builder Vs Licensed Contractor

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Owner / Builder Vs Licensed Contractor B = General Construction C=61 are Limited Speciality These types of contractors can these include Fire Alarm, perform all aspects of construction. Security Systems, While they can do all trades most Communications Systems, etc just do the construction and leave the sub-trade work to those This is only a partial list of specialty speciality contractors, ie plumbing, contractors. For a full list contact the mechanical, electrical, etc. Contractors State License Board (CSLB). C = Speciality Contractors In order for a general contractor (B) to Owner / Builder These types of contractors specialize in pull the building and sub-trade(C) vs one aspect of construction. These permits he or she MUST be doing 3 or contractors may only pull permits for more sub- trades in order to pull those Licensed Contractor their specific trade. speciality permits. C=10 are Electrical Contractors General contractor’s may not pull a The Laws and Other All aspects of electrical work building and 1 or 2 sub-trade permit or 1 sub trade permits only. Information C=16 are Fire Protection Systems Fire sprinkler systems Example would be a general contractor who is doing carpentry (B), electrical C=17 are Glazing Contractors (C), roofing (C-39), mechanical(C-20) - City of Millbrae Windows, Glass Doors this is Building and 3 Sub Trades. Community Development C=20 are Mechanical Contractors Refer to Contractors State License law Department HVAC and AC systems for further clarification. Building Division CSLB Phone # 800-321-CSLB C=36 are Plumbing Contractors All Plumbing work If you have any additional questions 621 Magnolia Ave. please feel free to contact the Building Millbrae, Ca. 94030 C=39 are Roofing Contractors Division at 650-259-2330. Roofing except Metal Tile Building Division 650-259-2330 C=43 are Sheet Metal Contractors Fax 650-697-2657 Sheet metal work but not Website - www.ci.millbrae.ca.us HVAC OR AC 12/30/05, 12/29/08 My permits are ready to be picked application as an Owner/Builder, you 2) California Licensed Contractor. up, Who can pick up my permits? assume full responsibility for all phases of your project and its integrity. By hiring a licensed contractor you There are two types of people who can should be getting a qualified person pull permits. UNLESS you are very experienced in who is suppose to know what they are construction, it is best to leave these doing. 1) Owner / Builders. matters to your licensed contractor. Licensed contractors are bonded and This person MUST be the current Don’t be talked into pulling permits insured. This protects the property owner of the property. just so the contractor can avoid paying owner and provides ways for the city business license fees. ALL property owner to get their projected An Owner / Builder describes a contractors are required to have a completed. situation in which the Property Owner business license for every city and becomes the general contractor. As an county they do work in. IF you hire unlicenced, undocumented Owner/Builder, YOU (not the person workers or handymen you are assuming you hire) assume responsibility for the Also pulling an Owner /Builder permit any costs associated with these types of overall job. to save permit costs is not a good workers. You have very limited reason to go this route. Permit fees are resources to go after these types of Your responsibilities may include such based on the costs of the project. The workers should they walk off the job, things as state and federal taxes, cost of a project is the actual contract or get injured, do not pay their sub- worker’s compensation insurance, and a valuation established by the Building contractors or material suppliers. other legal liabilities. You may be Division. The Building Division will required to hire various subcontractors estimate the job costs as contract labor Contractors State License Code for your project, scheduling their work plus material costs. While the Building requires work over $1000 to be and supervising the job. If a worker is Division understands that Owner performed by a licensed contractor. injured while working on your /Builder labor costs may be low or non property, you could be asked to pay for existent, the Building Division needs a Contractors are licensed in many injuries and rehabilitation through your level playing field for determining categories these include: homeowner’s insurance policy. project valuation and valuing the Owner / Builder as a contractor is that A = General Engineering Check with your insurance carrier for level playing field. Performs work that includes your liability limits and what your roadways, underground piping, coverage may include. Note some Owner/Builder permitees MUST major grading, etc. policies do not cover construction Complete the Owner Builder disclosure liabilities or workman’s compensation. and acceptance form PRIOR to applying for a permit may be issued.t By signing a building permit CITY OF MILLBRAE BUILDING DIVISION Considering Becoming an Owner-Builder? Important information you need to know BEFORE pulling your permit! The term “Owner-Builder” can mean three different things: “Owner as Worker”, “Owner as Contractor” or “Owner as Employer” Understand each has Benefits or Risk, and it is possible to combine them! Hiring a California Licensed Contractor means you do not personally perform any of the construction work, the permit is not taken out in your name, you are not personally responsible for the construction and you are not an Owner-Builder. Instead, you become a “Customer” and California law provides you the benefit of protection from poor workmanship, failure to finish the job and financial risk due to worker injury. Benefit/Risk: Highest Benefits and the Least amount of Risk Owner-as-Worker is a type of Owner-Builder where you personally perform the construction work, the permit is taken out in your name and you are personally responsible for the construction management, knowledge, workmanship, and completion of the job. You benefit by not paying others to perform this work for you and your risk depends on your own ability to complete the job successfully. Benefit/Risk: Possible Benefit with Low Financial Risk Owner-as-Contractor is a type of Owner-Builder where you personally act as your own General Contractor, the permit is taken out in your name and you hire California licensed sub-contractors to perform portions of the construction work. WARNING: The benefit of protection provided by law when you hire only California licensed sub-contractors can turn to serious financial risk if you hire unlicensed contractors to perform any of the work. Benefit/Risk: Possible Benefit and Significant Financial Risk Owner-as-Employer is a type of Owner-Builder where you pay any unlicensed individual to perform any construction work valued at more than $500.00, the permit is taken out in your name and you are personally responsible for their employment requirements, supervision, performance, safety and welfare while on your property. WARNING: Cost savings benefit can turn to serious financial risk if you fail to deduct payroll taxes or provide workers compensation insurance for each worker. Benefit/Risk: Possible Benefit with Significant Financial Risk (Health and Safety Code Section 19827) The California Legislature declares an “urgent and statewide public interest in assuring” that contractors comply with Contractors’ License Law, Business and Professions Code and Workers’ Compensation Insurance requirements to ensure property owners are informed about, and protected from the following when improving their property as Owner-Builders: Fraudulent representations P Liability for worker’s injuries P Liability for material and labor costs unpaid by contractors P Licensing requirements P Employers tax liabilities Over 20,000 consumer complaints are filed each year. Many complaints relate to owner/builder projects and include workmanship and workers’ compensation issues Homeowners suffer financial harm due to defective workmanship and injured employees. Following are alarming examples of what has occurred with Owner-Builder permits: Example 1: Homeowner received insurance money to rebuild burned-down home. § Owner/Builder permit pulled to rebuild structure. § Unlicensed contractor built substandard structure – must be torn down and replaced. § Estimated financial injury is $225,000. § Additional financial injury - IRS threatened to tax insurance payout if house not completed by the end of the year. Example 2: Brother-in-law had active license but filed an exemption from Workers Comp. § Owner-Builder hires brother-in-law to install a new roof. § Employee falls and sustains multiple spinal and extremity fractures as well as a head injury and remains in a coma to this day. § The Owner-Builder, who has sold the home, is now a defendant in a lawsuit for reimbursement for benefits paid to the injured worker. Example 3: Employee of contractor without Workers Comp is hired by Owner-Builder to install septic system and suffers injury that results in permanent disability. § The Owner-Builder did not have a homeowner’s insurance policy on the house against which to submit a claim. § The Owner-Builder is now a defendant in a lawsuit for reimbursement for benefits paid to the injured worker. Did you know – unlicensed persons frequently have the property owner obtain an “Owner-Builder” building permit which erroneously implies that the property owner is providing his or her own labor and material personally? Did you know – your homeowner’s insurance may not provide
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