Maui fire survivors warned of scams, poor work by unlicensed construction contractors

State officials are urging Maui wildfire survivors to be vigilant when choosing a contractor for rebuilding and repair projects.

The Hawai‘i Department of Commerce and Consumer Affairs said it’s important to pick licensed professionals to ensure safety, adherence to building codes and proper permit acquisition.

Six months after the wildfires, the US Army Corps of Engineers has completed ash and debris cleanup in Kula, and work in Lahaina is ongoing. It’s estimated there’s 400,000 cubic yards of material to clear in Lahaina, enough to fill five football fields five-stories high.

According to the DCCA, an estimated 3,971 properties were destroyed and approximately $1.23 billion in combined residential property and personal motor vehicle losses have been paid out by insurers. Unlicensed contractors have reportedly cold-called vulnerable landowners to get construction jobs with work poorly done; or with no work being done at all even after money has been taken.

Each year, DCCA receives hundreds of tips and complaints regarding unlicensed contractors. Unlicensed contractors may also go door-to-door with deceptive or fraudulent claims to pressure consumers into hiring them.

Penalties for unlicensed activity include fines, imprisonment and injunctive relief. State officials said that, given that a home is a substantial investment, it’s crucial to invest time in research to hire a licensed contractor. The conduct of licensees, as outlined in the Hawai‘i Administrative Rules, mandates reporting any unlawful activities to the Regulated Industries Complaints Office. In addition to legal responsibilities, engaging unlicensed individuals may jeopardize homeowners’ insurance policies, if claims arise from faulty work. 

Introduced this session, Senate Bill 2977, would enhance penalties and require violations to be punished by a fine of not more than $10,000, imprisonment up to one year, or both, for unlicensed contracting stemming from a natural disaster for which a state of emergency is proclaimed.

A comprehensive list of licensed contractors in the state and additional consumer tips and resources are available on the Licensed Contractor website at http://licensedcontractor.hawaii.gov.

The public can verify a contractor’s license by visiting www.businesscheck.hawaii.gov. This online tool provides information about licensed contractors, electricians, and plumbers, including license status, classifications, proof of insurance, and records of complaints.

Reasons to Hire a Licensed Contractor:

• A contractor’s license is mandatory for projects exceeding $1,500 in labor and material or requiring a building, electrical or plumbing permit. Electrical and plumbing contractors must employ licensed electricians and plumbers to perform the actual electrical and plumbing work, respectively.
• Hiring a licensed contractor ensures proper training, experience, background checks, and compliance with safety regulations.
• Licensed contractors carry worker’s compensation and liability insurance, providing protection for homeowners against injuries or damage during the project.
• Licensed contractors can obtain and sign building permits, and in case of issues, homeowners may access the Contractor’s Recovery Fund if a licensed contractor was hired.

Choosing the Right Contractor:

• General Engineering (type “A”) for specialized engineering projects.
• General Building (type “B”) for structures.
• Specialty (type “C”) for specific skills like electrical work or roofing.

Key Considerations for Homeowners:

• On-Site Verification: Licensed electricians and plumbers are mandated by law to visibly display their licenses while on the job, providing a tangible means of verification for homeowners.
• Handyman: For smaller projects with a total cost, including labor and materials, not exceeding $1,500, homeowners have the option to hire a handyman. Typically, handymen undertake minor repairs and projects described as “odd jobs” or “fix-up tasks.” However, it’s important to note that handymen without a contractor’s license should refrain from working on projects that:
  • Exceed $1,500 in total cost,
  • Require a building, electrical, or plumbing permit,
  • Involve electrical work,
  • Involve plumbing work.
• Penalties for Unlicensed Activity: Engaging in unlicensed contracting, especially for projects exceeding the defined limits, carries serious consequences for contractors. Homeowners are strongly advised to be cautious and to consider hiring a licensed professional regardless of the project’s cost.
• Reporting of Unlicensed Activity: If you come across a person or business that is engaged in or offering to do contracting work but you discover that the person or business does not hold a contractor’s license, notify the Regulated Industries Complaints Office at 808-587-4272 or submit a complaint online at https://cca.hawaii.gov/rico/file/.