Owner-Builder Overview

    Who is considered an owner-builder?

    Any individual or group of individuals who own the property on which they plan to construct, alter, repair, improve, or remodel a building or structure is considered an owner-builder.

    Is an owner-builder required to have a license?

    An owner-builder is exempt from licensure, but there are limitations.

    A license is not required if:

    • The owner-builder does the work themselves or through their own employees with wages as their sole compensation and the structure(s) is/are not intended for sale.
    • The owner-builder contracts with properly licensed subcontractor(s).
      (This exemption applies to the construction of a single-family residential structure and limits the number of structures intended or offered for sale to four or fewer in a calendar year.)
    • The owner-builder contracts with a General Building ("B") contractor. (The number of structures is then unlimited.)

    Is a homeowner required to obtain a license if they wants to improve their home?

    A homeowner improving their principal place of residence is exempt from licensure if all of the following exist:

    • The work is performed prior to sale;
    • The homeowner resides in the residence for the 12 months prior to completion of the work; and,
    • The homeowner has not taken advantage of this exemption on more than two structures during any three-year period.

    Are there any trades that property owners are prohibited from performing themselves?

    Property owners are prohibited from performing well-drilling work covered under the Well Drilling (C-57) classification.

    Does the owner-builder exemption apply to an individual who builds homes for resale (spec homes) and are there any limitations?

    Yes.

    The owner-builder exemption would apply to an individual who builds homes for resale under any of the following conditions:

    • Licensed tradesmen are hired to perform all work on the project (provided no more than four structures per calendar year are intended for resale).
    • A licensed general contractor is hired to perform and/or subcontract the completion of all work on the project. (No restriction on the number of structures completed per calendar year.)
    • The owner-builder performs the work, all or in part, and resides in the completed structure for one year prior to resale. (Applies to not more than two structures in a three-year period.)

    (For more information regarding owner-builder, see Section 7044 of the Business and Professions Code or The Risks of Being an Owner-Builder under the "Consumers" section of this website.)