Contracting A New Home For Realitor

AHS

I am looking for some advice regaurding the following situation.

I mostly do exterior home improvement work & one of my current customers who happens to be a realitor, is looking to break ground on building his first house (to sell when complete) in a month or two. He basically wants to do the genral contracting of the project himself. Handle all the subs, inspectors ect. All of the finacing for the project is ready to go, he will be buying the lot in a week or two. So here is the thing. He don't have a general contracting license & therefore needs to bring one into the mix. He wants to basically pay me a lump sum to do the project under my license. A sum that is way below the standard contractor fee but I won't have to deal with anything, just allow him to use my license for the project. He will be buying a warranty for the home which he says will minimize my liability.

The thought of letting someone other than me use my license sends up red flags but the amount of money I'm being offered makes it temptnig to at least look into.


Your thoughts!!

bmartin

Where are you located?

AHS

Minnesota

Brickie

Let me see if I got this right:

One of your customers, a realtor, wants to pay you to use your license(s) to play GC????

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bmartin

In California an owner of a property can act as their own general on up to 4 properties per year. Licensed contractors must perform all the work.

415moto

"In California an owner of a property can act as their own general on up to 4 properties per year. Licensed contractors must perform all the work."

In Cali, Im fairly certain the HO can do the work his self and just pull a permit. As long as its up to code, it doesnt matter who does it. Past the numerical property ownership limit, law calls for a GC lic. Or if its planned to be for sale within 1 year of being finished.

Minn. requires a Propety Owner to HAVE a GC lic to build his OWN home on his OWN land??

Hammatime

I did this before, run away. It was for a friend of mine. Sounded good he would use my license and I would get paid for doing nothing. But, I was smart ( I thought ) and drew up a contract explaining that if a problem arised and I had to supervise the project that I would be paid for all hours spent at $100/hr. I don't know where he found the people to do the work, but I swear they had never seen a house built. I got a call from the Building Inspector when the forms were set, telling me that we have a problem. It just went downhill from there. He paid me my time spent through out the project, but it was a nightmare for me as it took me away from my other jobs. This just brought back some bad memories, I need a drink.

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Zatol

I believe that your state's licensing board will take disciplinary action against you if they were to find out that you had allowed someone else to use your license to pull permits. That action could be, among other things; a fine, probation or revocation. All of this in addition to the liability that you would be assuming.

I also believe that this would be the wrong thing to do ethically.

I hope that you do not allow him to use your license, for your sake. Too many things could go wrong for you that could jeopardize your livelihood. Good luck.

bmartin

There is an exemption in Ca license law that allows an owner to improve 4 properties a year as long as they use licensed contractors. They can sell at anytime. The one year rule only applies if they do the work their self and then they can only do 2 in a 3 year period without breaking the exemption rule.

Double-A

If you're seriously thinking of doing this, form an LLC that dissolves once this project is done. Define roles and responsibilities and do it like a legitimate business.

If he wants to use your licence, may him pay a percentage of profits or take a hike. This is what risk is all about.

If you just swap 'products' around a bit, you'll quickly see that he's really asking for more closely fits the profession of prostitution than it does the profession of general contracting.

He's going to be gaining tangle benefits beyond just the profits from the sales, he's also going to be gaining new construction "experience", that can be applied toward getting his own GC licence.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

RobertCDF

Run away quickly. I would never EVER let someone work under my permits that I did not hire (as a sub) myself. Tell him that he can shawdow you so he can learn how to get his own GC license. But he will have to pay to even follow you (School costs money, why cant you charge to teach him?)

Here is a couple good reasons why not to do this.

1. In my area.... you will loose your license FOREVER if you do this. So is that few thousand for doing nothing worth loosing your business for?

2. I can pull up permits on the internet on ANY house built in the last 25 years here. I can see who the GC was, I can see who most of the subs are. I can also see ALL the inspectors comments. So I can see if the subs/GC did a good job or not. That could hurt you bad if he and his subs suck.

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Colorado Springs Custom Decks
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Mr. D

tell him to take that money he wants to pay you and get his own license. or, let him hire you and watch.

Teetorbilt

In most states a HO can be his own GC. Here, they call it a HO Contractor. I'd run with the rest but if you think that you can make a decent buck come in as a sub, project by project. At least you can't get burned too badly.

I know a few contractors that will sign off but they have all known their partners since kindergarden. My experience with realtors sucks, bites, blows and really isn't very good.

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AHS

Thanks for the input guys.

The deal sounded to good to be true & smelt bad at the same time. So I decided to not make the deal. The money being offered to me & the expierence I would have gained made it tempting but the project was way out of my comfort range. Plus buisness is as good as it has ever been so I don't feel I lost out on anything.

troubleseeker

This is a very simple answer. NO.NO.NO. Any part of that not clear? Your license and the reputation that folows it at the code enforcement office is your livel hood.To have your license connected to some half ass side project is not worth a few dollars.Don't believe the warranty/no liability story, your licence, your responsibility.

fox builders

tell your realtor to piss off,You dont ever let anyone use ,rent, buy etc your lic.It is one thing if he wants to pay you to oversee his project and pay you well,your comment of not having to do anything to make your lump sum payment scares me. who would do that and not check on project on regular basics.this guy wants his cake and eat it too.
I had realtor ask me about building a spec home for them and they were going to act as thier own gc, They wanted my framing and interior pricing and also what I thought other trades would cost from me
and they wanted a material list from me so they can purchase materials them selfs, My responce to them was your the gc make your own materials list and get sub pricing your self, I decline to bid on project. As it turn out they did act as thier own gc and completely screwed up project they nickled and dimed every sub materials never on site and subs not getting paid on time, Theres already 2 liens that I know of on property.

dayexco

ask him if you can use his realtor's lic. to buy/sell some houses.

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someday, i'll be as patient as Nick.

Double-A

Now THAT really puts his request into perspective..

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006