BLD-2023-0122_Owner BuilderOwnerBuilder_2010.doc revised 06/08/10
Effective January, 1, 2009, Assembly Bill 2335 amends California Health and Safety Code,
Section 19825, regarding disclosures and verifications required for all applicants seeking Owner-
Builder construction permits. These new application requirements provide an enhanced level of
consumer awareness and protection for property owners accepting the risks associated with
Owner-Builder construction permits.
“The Legislature hereby finds and declares that there is an urgent and statewide public interest in
assuring that building contractors comply with the Contractors License Law…and provisions of
law relating to Workers' Compensation Insurance for building construction, that property owners
are informed about, and protected from, fraudulent representations, liability for worker's injuries,
liability for material and labor costs unpaid by contractors, licensing requirements, and
employer's tax liabilities when improving their property as owner-builders”
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 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
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.
OWNER-BUILDER NOTICE
COMMUNITY DEVELOPMENT DEPARTMENT • BUILDING DIVISION
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3228 • FAX (408) 777-3333 • building@cupertino.org
OwnerBuilder_2010.doc revised 04/12/10
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 coverage for injuries
sustained on your property by an unlicensed contractor and his/her employees?
Did you know – if you are considered an “employer” under state and federal law, you must
register with the state and federal government, withhold payroll taxes, provide workers
compensation and disability insurance and contribute to unemployment compensation for
each “employee”?
Did you know – that if you fail to abide by these laws you may be subjected to serious
financial risk?
OWNERS BEWARE AND CONSIDER THE RISK BEFORE ACCEPTING FULL
RESPONSIBILITY FOR YOUR CONSTRUCTION PERMIT
OwnerBuilderForm_2010.doc revised 04/14/10
Dear Property Owner(s):
An application for a building permit has been submitted in your name listing yourself as the builder of the property
improvements specified at:
SITE ADDRESS APN BP#
OWNER NAME OWNER ADDRESS
DESCRIPTION OF WORK:
We are providing you with an Owner-Builder Acknowledgment and Information Verification Form to make you aware of
your responsibilities and possible risk you may incur by having this permit issued in your name as the Owner-Builder. We
will not issue a building permit until you have read, initialed your understanding of each provision, signed, and
returned this form to us at our official address indicated. An agent of the owner cannot execute this notice unless
you, the property owner, obtain the prior approval of the permitting authority.
OWNER’S ACKNOWLEDGMENT AND VERIFICATION OF INFORMATION
(DIRECTIONS: Please read and initial each statement below to signify you understand or verify this information.)
____1. I understand a frequent practice of unlicensed persons is to have the property owner obtain an “Owner-
Builder” building permit that erroneously implies that the property owner is providing his or her own labor and material
personally. I, as an Owner-Builder, may be held liable and subject to serious financial risk for any injuries sustained by
an unlicensed person and his or her employees while working on my property. My homeowner’s insurance may not
provide coverage for those injuries. I am willfully acting as an Owner-Builder and am aware of the limits of my
insurance coverage for injuries to workers on my property.
____2. I understand building permits are not required to be signed by property owners unless they are responsible for
the construction and are not hiring a licensed Contractor to assume this responsibility.
____3. I understand as an “Owner-Builder” I am the responsible party of record on the permit. I understand that I may
protect myself from potential financial risk by hiring a licensed Contractor and having the permit filed in his or her
name instead of my own.
____4. I understand Contractors are required by law to be licensed and bonded in California and to list their license
numbers on permits and contracts.
____5. I understand if I employ or otherwise engage any persons, other than California licensed Contractors, and the
total value of my construction is at least five hundred dollars ($500), including labor and materials, I may be
considered an “employer” under state and federal law.
____6. I understand if I am considered an “employer” under state and federal law, I must register with the state and
federal government, withhold payroll taxes, provide workers’ compensation disability insurance, and contribute to
unemployment compensation for each “employee.” I also understand my failure to abide by these laws may subject
me to serious financial risk.
____7. I understand under California Contractors’ State License Law, an Owner-Builder who builds single-family
residential structures cannot legally build them with the intent to offer them for sale, unless all work is performed by
licensed subcontractors and the number of structures does not exceed four within any calendar year, or all of the work
is performed under contract with a licensed general building Contractor.
____8. I understand as an Owner-Builder if I sell the property for which this permit is issued, I may be held liable for
any financial or personal injuries sustained by any subsequent owner(s) that result from any latent construction
defects in the workmanship or materials.
OWNER-BUILDER DISCLOSURE FORM
COMMUNITY DEVELOPMENT DEPARTMENT • BUILDING DIVISION
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3228 • FAX (408) 777-3333 • building@cupertino.org