July 20, 2010||Legislative Updates: State of Hawaii

Owner-Builder Law Amended to Allow Hardship Exemption

As of July 1, 2010, there is now a process by which homeowners who have built a home or improved a property with an owner-builder permit can list the home for sale or lease within the first year after completion.

To qualify for the hardship exemption, the owner-builder must file an application with the Contractors License Board certifying that the structure was not intended for sale or lease at the time the permit was obtained. The Board must notify the owner-builder in writing of its determination within 90 days of receipt of the complete application.

Application for Hardship Exemption from Chapter 444 HRS (PDF)

Previously, the law prohibited the sale or lease of a home built with an owner-builder permit within the first year after completion. The revision to the law also clarifies the definition of completion as the date of final inspection approval by the county.

Why HIBR and HAR Fought for the Hardship Amendment

2010’s Act 44, the legislation creating these amendments, was passed in large part due to the efforts of the Government Affairs Committees of the Hawaii Island Board of Realtors and the Hawaii Association of Realtors. Until this law took effect, licensed agents faced discipline by the DCCA if they listed a property improved under an owner-builder permit within the first year. In many cases, agents were unable to assist sellers who faced a legitimate hardship that forced them into a position where they needed to sell such a property. The amendments to HRS 444 (PDF) make it possible for Hawaii agents to meet the needs of clients who obtain an exemption without fear of penalties or license revocation.

Additional Resources

Got Owner Builder Permit? (PDF):  This brochure is from the Hawaii Department of Commerce and Consumer Affairs. In addition to providing information about the hardship exemption, it also outlines two other cases in which owner-builders can be exempt from the one-year rule: 1)  if they are selling a residence to an employee or 2) if the work done under the permit is estimated at less than $10,000.

DCCA Press Release (PDF):  2010 Legislate Update: Changes to HRS 444, including a recap of Act 44.

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