Don't Let Hawaii Vendor Liabilities Become Your Liability

Clients recently closed on a town home at Waikoloa Colony Villas and just came back to enjoy their property for the first time as theirs…now it is time to add new colors, to remove old carpet and replace it with wood flooring, to purchase new furniture, and make it their own sweet vacation home. They didn’t want to take on this project, so they called me, real estate licensee, and asked, “Who would you recommend?”

As much as I want to be of service to my clients, I don’t want to place myself, or them, at risk with recommending or hiring contractors, painters, or plumbers that are not properly licensed in the State of Hawaii.

Why? Persons engaging in contracting without the proper contractor licenses are in violation of Hawaii Revised Statutes, (HRS) 444-9. Persons operating without the proper contractor’s license are not playing by the same rules as licensees. 

My clients understood all of the above, however, they could not stop thinking that if I could refer them an unlicensed contractor they could probably perform the work cheaper and faster. So, I had to bring up another issue: what if this contract worker suffered an injury working on their wood floor project?—And they may not have realized that I could be involved too.

If that injured contractor was not insured, then it could involve an expensive lawsuit. There are a variety of ways a construction contract can go wrong, resulting in a complaint about the unlicensed contractor, and me, as the person providing the referral. 

So, finally, my clients asked the 2 following questions: 

1. How do we know if my contractor is licensed? Finding out if a contractor is licensed isn’t very difficult, check out the Hire a Licensed Contractor webpage at www.licensed.contractorhawaii.gov.

2. How do we know if my contractor is insured? This is definitely a vetting step that no one wants to skip. Make sure the vendor has commercial general liability insurance and worker’s compensation. At a minimum, the general liability insurance policy will cover advertising injuries, personal injuries, bodily injuries, and property damages. 

If, after closing a transaction, my clients need to undergo some remodeling, repairs, or possibly even an expansion, I made a list of approved vendors that are both licensed and have shown proof of insurance. This is the only way to fulfill my duties to clients and to protect myself.