Owner-builder

An owner-builder is a property owner acting as their own contractor. Most states provide an exemption from contractor licensing for owners doing work on property they own and occupy, and the owner-builder permit is how that exemption is exercised.

What the owner takes on

Everything the contractor would have carried. Code compliance, supervision of the work, scheduling inspections, and liability if something goes wrong. The exemption removes the licensing requirement, not the responsibility.

The limits

They vary by state, but the recurring ones are:

• The property must be owned and, usually, occupied by the applicant
• It generally applies to one or two family residences, not to commercial or rental property
• There is often a limit on how frequently an owner may use the exemption
• A restriction on selling the property within a period after completion, commonly one year, is common and is meant to stop the exemption being used to build for resale
• Licensed trades must still be performed by licensed contractors

The part people miss

Hiring unlicensed labor directly can make the owner the employer for liability and workers compensation purposes. An injury on a job run this way lands on the homeowner rather than on a contractor's policy. The affidavit an owner signs spells this out, and it is worth reading rather than skimming.