HomeMy WebLinkAbout2025-10-22 Appellants Exhibit 4_Owner-Builder Exemption §444-2.5 Owner-builder exemption. (a) This chapter shall not
apply to owners or lessees of property who build or improve residential
or farm buildings or structures on property for their own use, or for use
by their grandparents, parents, siblings, or children, and who do not
offer the buildings or structures for sale or lease; provided that:
(1) To qualify for an exemption under this section, the owner or
lessee shall register for the exemption as provided in
section 444-9.1 ;
(2) The exemption under this section shall not apply to electrical or
plumbing work that must be performed only by persons or
entities licensed in accordance with this chapter, unless the
owner or lessee of the property is licensed for such work
under chapter 448E;
(3) An owner or lessee exempted under this section shall:
(A) Supervise the construction activity on the exempt buildings or
structures;
(B) Hire subcontractors appropriately licensed under this chapter
to perform any part of the construction activity for
which a license is required;
(C) Ensure that any electrical or plumbing work is performed by
persons and entities appropriately licensed under this
chapter or chapter 448E;
(D) Deduct Federal Insurance Contributions Act and withholding
taxes and provide workers' compensation insurance
for persons working on the construction activity who
are not licensed under this chapter or chapter 448E
and who shall be considered employees of the owner
or lessee; and
(E) Ensure that the construction activity complies with all
applicable laws, ordinances, building codes, and
zoning regulations;
(4) Until completion of the construction activity, an owner or lessee
exempted under this section shall make available the
following records for immediate inspection upon request by
the department:
(A) A copy of the building permit application;
(B) A copy of the issued building permit;
(C) Copies of all contracts with the names of all persons who
performed or are performing work on the exempt
buildings and structures; and
(D) Proof of payment to all persons contracted to work on the
exempt buildings and structures; and
(5) Upon completion of the construction activity, an owner or lessee
exempted under this section shall keep and maintain the
records identified in paragraph (4) for a period of three
years from completion of the construction activity and shall
make the records available for inspection within seven
business days upon request by the department.
(b) Proof of the sale or lease, or offering for sale or lease, of the
structure within one year after completion shall be prima facie evidence
that the construction or improvement of the structure was undertaken for
the purpose of sale or lease; provided that this subsection shall not
apply to:
(1) Residential properties sold or leased to employees of the owner
or lessee;
(2) Construction or improvements performed pursuant to an
approved building permit where the estimated valuation of
work to be performed, as reflected in the building permit, is
less than $10,000; or
(3) Any sale or lease caused by an eligible unforeseen hardship as
determined by the board pursuant to subsection (c).
(c) The board shall determine the eligibility of an unforeseen
hardship claimed by an owner under subsection (b); provided that an
alleged unforeseen hardship shall not be deemed eligible if the board
determines that the construction or improvement of the structure was
undertaken for the purpose of sale or lease. An exemption for an
unforeseen hardship shall not be denied solely because of lack of
completion, as the term is defined in subsection (e). An owner seeking
a determination of eligibility of an unforeseen hardship shall:
(1) Be in compliance with the requirements set forth in the disclosure
statement required to be provided under section 444-9.1;
and
(2) Submit a written application to the board at any time prior to
selling, leasing, or offering to sell or lease the property
describing the nature of the applicant's unforeseen
hardship. The application shall include supporting
documentation detailing the hardship, such as:
(A) Evidence of receipt of unemployment compensation;
(B) Tax returns;
(C) Medical records;
(D) Bank statements;
(E) Divorce decrees ordering sale of property;
(F) Mortgage default letters; or
(G) Bankruptcy filings.
The board shall communicate its determination to the owner in writing
within ninety days of receiving a completed application under this
subsection.
(d) Any owner or lessee of property found to have violated this
section shall not be permitted to engage in any activities pursuant to this
section or to register under section 444-9.1 for a period of three years.
There is a rebuttable presumption that an owner or lessee has violated
this section when the owner or lessee obtains an exemption from the
licensing requirements of section 444-9 more than once in two years.
(e) For the purposes of this section, "completion" means the date of
final inspection approval by the county.
(f) An owner or lessee exempted under this section shall not be
eligible to recover from the contractors recovery fund.
(g) This section shall not apply to agricultural buildings, structures, or
appurtenances thereto that do not require a building permit or are
exempt from the building code. [L 2010, c 44, §2; am L 2011 , c 115, §1 ;
am L 2013, c 176, §2]
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