Permitting Services Podcast

The Pros and Cons of Being Your Own General Contractor

• Gail Lucas • Season 3 • Episode 14

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This Montgomery County Department of Permitting Services (DPS) Podcast episode focuses on the pros and cons of serving as your own general contractor when embarking on home renovations or other residential projects. David Burch, DPS residential inspections manager, and DPS Division Chief Gail Lucas, who hosts the podcast, discuss the risks and rewards of doing it yourself. Their conversation covers what homeowners should know before taking on the responsibility of managing a project, and why it is an important decision.

Tune in to learn about: 

  • What you should know before you begin a project.
  • The importance of hiring licensed contractors.  
  • The difference between contractors and subcontractors.
  • Who should apply for the permits? 
  • How DPS can help, including resources to know about.  

Previous DPS Podcast episodes have covered a variety of topics, including accessory dwelling units, building safety, eSolar, new codes, residential fast-track permits, special event permits, use and occupancy certificates, vendor licenses, and more.

Do you have a question or idea for a future DPS Podcast episode? Email us at dps.podcast@montgomerycountymd.gov

Gail Lucas:

Welcome to the Montgomery County Department of Permitting Services podcast. I'm Gail Lucas, your host. I'm also the division chief for the Customer Support and Outreach Division here at DPS. Joining us on the podcast today is a returning guest, Dave Birch. Dave is the Residential Inspections Manager. Dave, please remind our listeners what your job is, what your role here is at DPS.

David Burch:

Well, thank you for having me. I am the manager for all of the residential inspectors here in Montgomery County. And as such, we get to see a lot of what's going on out there in the county as far as what people are building. And we get a lot of feedback, both bad and good, on what our inspectors are seeing and what they're encountering as they're talking to customers and clients. And so that's one of the reasons that we want to talk about homeowners acting as contractors.

Gail Lucas:

This topic is hot, hot, hot. This is a topic that the Office of Consumer Protection in Montgomery County weighs in on quite a bit. This is something that we talk about in-house quite a bit. Homeowners acting as their own contractors. Talk about what are the pros and cons of doing that, Dave. When does it work well for a coup for a homeowner to act as their own contractor? When does it work not so well?

David Burch:

So presently we see about 40% of the alteration, addition, decks, those types of permits are applied for by homeowners acting as their own contractors. And the intent of that is that the homeowner is going to perform the work themselves. They're going to dig the holes, they're going to set the foundations, and so on. As part of that, what we're seeing, though, is that the homeowner is pulling the permit and then finding out that they are then hiring subs.

Gail Lucas:

Okay.

David Burch:

And they're their subcontractors. If they're hiring licensed, bonded, insured contractors, then we're okay with that. Where we run into a problem, though, is when they're hiring people that may or may not be have the skills required. It's um, you know, you don't want to take on a project that that you just don't have the skills to complete. Um, I know in my instance, I'm a pretty good framer, but I know I can't do drywall. And anytime there's drywall involved, I have to hire a contractor. I know my limitations. That's what we're hoping these homeowners are doing as well.

Gail Lucas:

Let's talk about some of the reasons why homeowners act as their own contractor. I would think that cost is the top of that list, that folks may believe that they are saving money by acting as their own contractor or having themselves as the primary applicant on permits. Is that what you find in the field that folks believe they're saving money?

David Burch:

Yeah, primarily the the most common answer we hear is well, I can save money if I do the work myself.

Gail Lucas:

Okay.

David Burch:

And for the most part, that's true. Uh we also hear that um, you know, I have control of the project if I'm the contractor. Um and then probably uh a large proportion also, you know, you have that satisfaction of doing the job and seeing it completed and being able to say, you know, I did that. Um unfortunately, we also run into the other side of it where uh you know you end up spending more money than you thought you would because you don't have those, you know, those tools or those materials that a contractor may have on their on their vehicle, you know, readily handy. Sure. Um I hear a lot of times, you know, people say, well, I made multiple trips to the hardware store to get this deck put up because I didn't have the right brace or I didn't have the right screws. So it can take longer. Uh if you take on more than your skills allow, it can also cost considerably more money.

Gail Lucas:

One of the things that we get questioned about often, um, and maybe you can tell us how often you see this happening in the field, is that folks get talked into being the primary on their application, and they end up hiring a contractor and they may not do all of their due diligence to check out license or whether or not this contractor is legitimate. So they are the primary applicant, the homeowner is the primary applicant. They um tell us that they're acting as their contractor, but they in fact hire someone else to do the work. Tell us what happens then.

David Burch:

Well, um, first and foremost, the homeowner is ultimately responsible for their project. Whether they hire a contractor or whether they do the work themselves. Um, it gets a little more confusing if they put themselves down as homeowner acting as contractor, and then they hire a subcontractor to do the work. Uh at that point, that homeowner and that subcontractor have a contractual agreement of some sort. And um here we and and we do not have that agreement with the with the subcontractor. So any issues with inspections or substandard work or um disappearance of a contractor, that unfortunately all falls back on the homeowner at that point. And unfortunately, they don't have the protections that they would uh if they hired a licensed bonded contractor that's licensed with the state of Maryland and uh they're protected under the state of Maryland bond program.

Gail Lucas:

I was just about to say that that when you use a licensed Maryland Home Improvement Commission licensed contractor, you have some protections that are offered by the state of Maryland. If the work is not up to par, if you have a contractor that disappears, you can appeal to the MHIC commission in order to perhaps get some money back or get some help with your project. That's not the case with an unlicensed contractor, is it?

David Burch:

No, if they're unlicensed, they can they can disappear and there's nothing that can be done.

Gail Lucas:

What happens when, and this is another question that we get a lot of times, the homeowner has listed themselves as the primary applicant, the homeowner acting as contractor, and they hire someone and they assume that DPS's relationship is now going to be with that contractor, not with them. Do you see that in the field where they don't really understand what it means to act as their own contractor?

David Burch:

Yes, very often. Uh unfortunately. Um a lot of times the contractor, I should say the subcontractor will encourage the homeowner to pull the permit themselves.

Gail Lucas:

Right.

David Burch:

And frankly, that should be a red flag to a homeowner. Okay. If the contractor is insisting that they pull the permit, that quite often means that they are not licensed, that they may or may not have the credentials needed to complete the job, and um they don't want to be responsible.

Gail Lucas:

What folks should know is that under state law, anyone who offers to do contracting work for you, to do home improvement, to do additions or alterations to residential properties must have a Maryland Home Improvement Commission license, right? They must be MHIC licensed contractors. So whether you act as the contractor, yourself, the homeowner acting as contractor, and you subcontract to someone, or whether they pull the permit in their name, they're still supposed to have an MHIC license. Is that correct?

David Burch:

That is correct.

Gail Lucas:

Dave, can you give us some examples of what you've seen in the field, what you've seen locally, and what is the takeaway from those things?

David Burch:

Well, probably the most drastic example I could see where it didn't go right was uh we had a uh situation where the homeowner was the permittee as the contractor. They hired uh subcontractors, and the subcontractors demolished a larger portion of the house than they were supposed to, okay, and it pushed the alteration from being an alteration addition into a new construction.

Gail Lucas:

Okay.

David Burch:

And when that occurs, that triggers all kinds of additional requirements as a new home that we kind of mentioned. Um probably one of the uh from a uh cost standpoint, we had a situation where the homeowner was the contractor for an accessory dwelling unit, and they hired subcontractors to perform the work. And it took about three months longer than the uh than the plan.

Gail Lucas:

One of the things that I think we can make clear for our listeners, um, because we're using terms like subs or subcontractor, when you indicate that you are acting as the general contractor, the homeowner acting as contractor, anyone else that you hire is considered a subcontractor to you, correct?

David Burch:

Correct.

Gail Lucas:

And your relationship or your contractual agreement between you and that subcontractor is not something that DPS is involved in, is it?

David Burch:

That is correct. The other thing I'd like to mention from a um uh kind of a legality standpoint is um the intent is that you know the homeowner is acting and doing his own work. Sure. This was only for their primary residence. Sure. Uh this should not be for rental units. This should that they're not going to be residing in. This should not be for houses that they are planning on, you know, that they have purchased and they're planning on selling immediately. That is not their primary resident.

Gail Lucas:

So it must be the property owner's primary resident that they intend to live in, not renovate and sell, resell, not flip as the term goes.

David Burch:

Correct.

Gail Lucas:

Okay. On the DPS website, we have a page for homeowners, just for homeowners, that talk about all of these issues and that provide resources to the homeowners with links to the Maryland Home Improvement Commission, to the Office of Consumer Protection that gives homeowners information about typical projects that homeowners undertake, typical additions or alteration projects that homeowners may do. Please make sure that you're going to the DPS website to look at that information. It's www.montgomerycountymd.gov slash forward slash DPS, and you're looking for the homeowners page on our website. How else can they get help?

David Burch:

So our recommendation is that they call 311 and submit a request to have one of our staff members contact them directly. And um, part of that kind of informal consultation is we can bring up portions of the project that they may not think of.

Gail Lucas:

Okay.

David Burch:

Things like do they know where their gas line is? Do they know where their electric line is when they're digging footings?

Gail Lucas:

Okay.

David Burch:

Or, you know, things that they may not have thought of. And, you know, quite often when we've done this, we've run into situations where people go, you know what, this is way bigger than I thought it was. I'm gonna hire somebody.

Gail Lucas:

The bottom line for property owners is that if you're considering working your home, consider a licensed contractor, not only for alterations or addition kinds of projects, but certainly if you're considering building a new home, right? Because we have had homeowners act as their own contractor for the building of new homes.

David Burch:

Yeah, building of new homes is a whole different level. Um and what uh if you are planning on building a new home as the homeowner, acting as contractor, then there's an application process through the Office of Consumer Protection.

Gail Lucas:

Right.

David Burch:

They have to be approved as a new home builder, they have to post bonds, have to insure the house, uh, and provide a warranty. Even if you're a homeowner, you know, there there's some requirements there that go beyond just the simple building of a deck or putting a shed in the rear yard.

Gail Lucas:

Right. Yeah. So for all of our listeners out there who are considering DIYing your project or making an application where you will list yourself as the primary applicant or as the homeowner acting as contractor, make sure that you've done your homework, right? Make sure that you've investigated any contractors that you may subcontract with or that you may bring in to help you do this work. What else, Dave? Is there anything else that folks ought to know?

David Burch:

Well, as you're planning and you're trying to decide whether or not you want to be, you know, a the the contractor on this job, you should ask yourself a few things is, you know, do I have the time? Uh I can tell you from experience, you know, every project I've ever taken uh taken on has taken more time than I thought it would.

Gail Lucas:

Okay.

David Burch:

Uh do I have the skills? You know, there's just certain things that I know not to even attempt, um, because it will end up costing me more money.

Gail Lucas:

Okay.

David Burch:

And uh and along with that, too, is sometimes we see people that get so involved in the project and it's going so poorly that it actually ends up costing them way more money to fix the problem than if they just hired the right person to begin with. And then if you are hiring subs, make sure that they are licensed in the state of Maryland.

Gail Lucas:

So the message to our listeners is think and plan and do your research, do your homework before you build or before you complete that application. Thank you, Dave. Great advice. Thank you, listeners, for tuning in today. Remember that DPS is here to help you, our customer, succeed. It's important to know when you need a building permit and why you need a permit. If you have questions about the permitting process, you can reach out to our customer support team by calling 311 if you're in Montgomery County or 240-777-0311. Or stop by DPS's offices. We're at 2425 Reedy Drive on the seventh floor. We're open Monday through Friday, 7:30 a.m. to 4 o'clock p.m. We are here to help you. We have folks in the office every day. You don't need an appointment. You can just stop in. Thank you, Dave Birch, for joining us on the podcast today. And thank you, listeners, for tuning in. Please check out the Montgomery County Department of Permitting Services website to find important information and resources to help you with your next project. Do you have an idea or a question for an upcoming podcast? We want to hear from you. Email your ideas and questions to dps.podcast at MontgomeryCountymd.gov. And if you found this podcast helpful, please share it with others and subscribe so that you always get our latest episode. Until next time, I'm Gail Lucas. Remember, DPS is your project partner.

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