In today’s market there are lots of bank owned homes on the market. Several people have decided to purchase some of these homes and fix them then flip them. Most of these people are not licensed contractors and are just people with little to no experience or they hire people with little to no experience to do whatever work need to be performed to make the home look good, not necessarily function well.
Many Arizona Home Inspectors are performing home inspections for people purchasing these homes and finding significant issues with these homes. The Arizona state law says people do not have to be licensed to work on their own homes however there are exceptions.
§32-1121 Persons not required to be licensed;
A. This chapter shall not be construed to apply to:
5. Owners of property who improve such property or who build or improve structures or appurtenances on such property and who do the work themselves, with their own employees or with duly licensed contractors, if the structure, group of structures or appurtenances, including the improvements thereto, are intended for occupancy solely by the owner and are not intended for occupancy by members of the public as the owner’s employees or business visitors and the structures or appurtenances are not intended for sale or for rent. In all actions brought under this chapter, except an action against an owner-occupant as defined in section 33-1002, proof of the sale or rent or the offering for sale or rent of any such structure by the owner-builder within one year after completion or issuance of a certificate of occupancy is prima facie evidence that such project was undertaken for the purpose of sale or rent. For the purposes of this paragraph, “sale” or “rent” includes any arrangement by which the owner receives compensation in money, provisions, chattels or labor from the occupancy or the transfer of the property or the structures on the property.
This means that if the person is planning on living in the home for 12 months or more, then they can do the work themselves or hire handymen to do the work (as long as the total construction cost labor and material is under $1000)
Otherwise all work would need to be performed by a licensed contractor.
Since many of these homes have been stripped by the previous owners, it is very doubtful that cabinets, counter tops, flooring and painting can be performed for under $1000. It is even more unlikely that these people are going to be occupying the home for 12 months.
If you are purchasing a home that has been recently flipped, I recommend asking the seller for copies of all receipts from licensed contractors and receipts for all materials.
I am currently working on several cases where a home was flipped and they concealed damage, some of these items were missed by home inspectors and some were not able to be identified until the home was occupied again.
This is definitely a buyer beware issue.
Home Buying tips:
Hire a licensed Realtor, not just a real estate agent
Hire an ASHI Certified home inspector. This person will have passed a written exam, performed over 250 home inspections, has a code of ethics they must adhere too and they are required to get a minimum of 20 hours of continuing education every year.
If there are items that need to be repaired after the inspection make sure the work is performed by licensed contractors.
Scott Warga, is the Qualifying party for ACSI American Construction Specialists and Investigations LLC,(ROC216772) a dual licensed residential and small commercial contractor. He is also a qualified Phoenix home inspector certified by the Arizona Board of Technical Registration (#38062) and was appointed to the Arizona Board of Technical Registration’s Enforcement Advisory Committee. He has 9 years construction experience and has performed residential and commercial property inspections for over 8 years. He has specialized in forensic inspections, investigating failed, damaged and defective construction for over 4 years. He is a member of the American Society of Home Inspectors, (#205826) and currently sits on their board of directors. He has been an instructor of home inspection at Mesa Community College, for Inspection Training Associates, a Kaplan Professional School and Arizona Sun-Tech Home Inspection School. He has served as District Chairman & Vice President for the Arizona chapter of the American Society of Home Inspectors and an approved instructor for both them and the Arizona Department of Real Estate. If you need an Arizona Home Inspector, he is your guy.