Have to be a licensed contractor to Flip?

13 Replies

I am confused now. I have been a buy and hold investor for a while but I am at the tail end of my first flip.

All plumbing, electrical and mechanical (HAVC) I have had licensed contractors doing the work. I have been by the book and getting the right permits.  The rest (painting, trim, tile, cabinets) I have been doing the work myself, or with my own team.

I am doing final plumbing inspection and the Plumbing inspector is telling me that I am not allowed to do ANY work my self since I don't live here. He is trying to tell me I'm not allowed to put the tile in the bathroom. Or even do the trim unless I am a licensed contractor.

He even called the township code office to tell them I am doing this.... He is giving me a "PASS" this one time but next time all work on a house I don't live in has to be done by a Contractor.  I own the house, I just don't live there and I am not paying myself to do the work.

I have looked in to becoming a contractor in NJ in the past.  The only official rule was if I was getting paid more than $600 per job then I needed to be a contractor.

Now I have been told this inspector is just out for blood on every job he goes too.  He states this is a NJ law not a town law. 

Looking for guidance and what others have experienced.

PS. What set this off is he said I need a building inspection for them to look at the tile in the bathroom. But there is no need to pull a permit for the tile job why would an inspector come out.   This was just a surface remodel.

They want their pound of flesh or as they say permit money. Had these few weeks back. Tile man was ready to come in. Forgot to get ask my plumber to get the permits for all his work and ended up pushing back tile man 1 week until inspection. Good luck JP

Can someone please chime in on this.  How can this be possible?  How would anyone in NJ be able to do a flip and only hire contractors?  That would kill investor's budgets. I'm hoping to do flips in the future without living in the property!  

I was told something similar once.  That as the homeowner, I was allowed to do the work if I intended to live there (incidentally, this included electrical, plumbing, and other stuff... so long as I was the owner occupier and it passed inspection, I could do myself).

But, if I was not, then I they said I had hire licensed contractors. But it wasn't clear to me if that was true for demo and tile (which I had to pull permits for).

I got the impression they just wanted my money.

This is a slippery slope. This is for California.

If you are a homeowners you can pull permits to do the work yourself. However you must sign a affidavit stating you are not contracting any work out and doing all the work yourself. There are exceptions.

The intent is to occupied the property.

However you run into homeowners that contract work out and not do all the work or hire unlicensed contractors. To save on money.

Then sale or rent out. If you sale or rent out your consider a contractor and should be licensed.

The rules are different and some local jurisdictions enforce it more than others. Your permit can be revoked and legal action can be brought against you.

The next time you pull a permit as a home owner builder read the permit affidavit regarding what your are signing.

Here is a sample one. Google homeowner permit affidavit.

Homeowner’s Affidavit for Building Permit
Please Note: Homeowners who obtain their own building permits (sometimes referred to as “homeowner’s permits”) thereby assume various significant obligations and responsibilities. If you have any questions regarding your obligations and responsibilities under a Building Permit issued to you as a homeowner, please contact the Building Department at This Affidavit is required pursuant to Chapter 547 of the Codified Ordinances of the City of Shaker Heights.
In applying for a Building Permit, the property owner signing below hereby acknowledges (1) that they assume the responsibility as their own general contractor and (2) that they agree to the following:
• Each contractor or subcontractor working on the project under the Building Permit shall be registered with the Shaker Hts. Building Dept. in accordance with Chapter 547 of the Codified Ordinances of The City of Shaker Heights. This requirement applies whether the Building Permit is issued to a contractor or to a homeowner.
• The owner shall submit an affidavit to the Director of Building outlining which contractor(s) or subcontractor(s) shall be performing each phase of the construction.
• All work shall comply with all the applicable Building Codes, ordinances, rules, and regulations, and shall be inspected prior to being concealed or completed.
• Arrangements shall be made for all work to be inspected by the Shaker Hts. Building Dept., both at roughing-in and when completed, as required under Chapter 1307 of Codified Ordinances of The City of Shaker Heights.
• The homeowner must reside at the location of work being preformed. A Valid Ohio Drivers License/State I.D. will be required for verification.
• The homeowner swears that as the homeowner they are performing all work themselves. No sub-contractors will be used.
• Filing a false statement with the Director of Building may cause your permit to be revoked and the matter referred to the Law Department for legal action.
Property Address: ________________________________________________________________ (HOMEOWNER MUST RESIDE AT LOCATION)
Owner’s Signature: ________________________________________________________________ Owner’s Name (please print): _______________________________________________________ Owner’s Phone No.: ______________________________ Building Permit #: _______________

So to answer your question. Each local jurisdictions is different in enforcement. If your inspectors is commenting on the issue I recommend you listen to him.

But in almost everything local jurisdictions the intent is for you to occupy the property.

Answer to your tile question. If you are removing drywall in the shower/bath tub area a permit is required.

Most will update the plumbing since it is open.

Second backer board inspection and screw.

Most of the time you can get away with it. But a permit is required.

I am a registered home improvement contractor in NJ. I became one earlier this year for exactly this issue. you aa an individual are not allowed to perform repairs on a house that is owned by am llc. you also can not approve plans for repairs yourself an Architect needs to approve them. The llc being it's own entity opens up some new problems but provides a ton of benefits also.

@Dan Pereda

I agree with @Taye N. . Every municipality has different rules. I would take a trip down to your county/city office and speak with the permitting department and expeditors to see exactly what needs to be done.

Feel free to get in touch with additional questions!

@Chris Anderson how difficult was it to get registered as a home improvement contractor?? Where can I start if I'm interested in doing the same ?? Costs ?? How long did it take ??seems like a great idea is all.

So it's not that difficult. you have to buy liability insurance and submit an application. it took me about 6 weeks to be approved. I can now submit my own building permits. I am still not allowed to do my pen electrical or plumbing repairs though. that is a separate license . 

@Chris Anderson , thank you for the info, but couple more questions:

- can you submit permits anywhere in NJ or only in specific City/County?

- how much did it cost to get the Home Improvement Contract license? A few hundreds or a few thousands dollars?

Thanks

anywhere in nj yes.

The license application was 175 I think from the department of consumer affairs. the insurance is like 2200 per year.

@ Chris Anderson thank you for the info . Now I noticed you said u can't do the electrical or plumbing . Does that mean u pull the full permits for plumbing, electrical building and fire . But u can't do them your self and u sub contract it out or do u have to have the licensed plumber and electrician take out those permits . Just curious

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