My primary residence, which I own, was destroyed by the wildfires. Who can help me have it rebuilt? If my residence was not insured, or the insurance turns out to be insufficient, are there any programs that might help me rebuild?

As with other types of assistance, you should first look to charitable donations and insurance proceeds to cover the costs of rebuilding and repair. To the extent that you were uninsured or underinsured, FEMA or the SBA may be able to help.

The SBA provides low-interest, long-term loans to repair or replace a primary residence owned by a victim-applicant in a federally declared disaster area such as the five counties affected by the 2003 wildfires. The SBA loan, which may be as much as $200,000, can be used to repair or replace eligible real property, to pay third parties (not family members) to remove debris from the property (or rent equipment necessary for such clean-up). The loan cannot be used to upgrade or enlarge a residence, unless such improvements are necessary to comply with revised city or county building codes, while the amount available to replace landscaping, swimming pools, and similar items is limited. Secondary or vacation homes are not eligible for SBA loans.

Finally, assistance may be provided through the IHP or SSGP programs. For more information, see “State Programs."

If I clean up debris from my property that resulted from the fire, do I need to get some sort of permit?

The California Department of Toxic Substances Control (DTSC) has stated that immediate efforts to clean up “ash, charred debris and other contaminated materials from burned [residential] structures” are exempt from hazardous waste permit requirements. Note, however, that this exemption “applies only to emergency actions taken to clean up, contain and dispose of the ash and debris from burned structures” and “does not apply to long-term restoration activities.” You may want to check with the DTSC at (916) 255-6504 or online at www.dtsc.ca.gov/sitecleanup/erp/Fire-Relief.html for more particular information and advice.

Must I send any debris I clean up to a special collection facility?

Although much of the debris likely includes materials that need to be properly disposed of to avoid soil or water contamination, to the extent that hazardous materials cannot be separated from other burned materials (as is likely to be the case in a burned residential structure), the DTSC has indicated that such debris may be sent to municipal solid waste landfills.

My primary residence, which I own, was destroyed by the wildfires. Will I need a permit to rebuild it?

As a general rule, a building permit is required whenever structural work is involved or when the basic living area of a home is to be changed. This could include separate permits for roofing, electrical, heating, and plumbing. Typically the contractor overseeing the rebuilding/repair will obtain the necessary building permits from the city or county building/planning department.
Several cities and counties are contemplating special treatment for building permit applications submitted by wildfire victims. For instance, the County of San Diego will provide plan review and issue building permits at no cost for anyone whose home has been destroyed by fire. In addition, the County will expedite processing of building permit applications. Make sure that you or your contractor ask about any special programs available for wildfire victims regarding building permits.

What happens if I do not get a building permit?

If the authorities find out that you have undertaken repairs or rebuilding without obtaining a necessary permit, you will generally pay a fine, and may be ordered to tear down any construction that was done without authorization. The amount of the fine varies by jurisdiction, but is typically at least $1,000 per incident. Further, if you sell your property, you are required by law to disclose work that has been done without the required permits, which could lower the sale price or jeopardize the sale of your property altogether.

My former house was built before the current building codes were put in place. When rebuilding, do I have to conform to the new building codes?

Yes, houses must be constructed according to the current codes in effect at the time the permit is issued for reconstruction. If your house is only being repaired, some cities and counties may not require you to conform to new building repairs if such repairs are considered “minor.” You should check your insurance policy or call your insurance carrier to determine whether your homeowners’ policy provides for upgrades to the current building code. Some policies do not pay for building code upgrades, and you may then have to pay out-of-pocket for such upgrades. During the Oakland Hills fire of 1991, many insurance carriers voluntarily upgraded policies that did not pay for building code upgrades, but as of the time this HandBook was written, there has not yet been a decision by insurance carriers whether they will do so again.

Is it a good idea to be my own general contractor?

Unless you are very experienced in the construction business, no. As an owner/builder, you assume responsibility for the overall job, which may include state and federal taxes, workers’ compensation insurance, and other legal liabilities.

If I’m not my own contractor, how will I know which contractor to hire?

A standard rule is only to use contractors who have been referred to you by someone you know and trust. However, in times like these, that is not always possible. Unscrupulous contractors may attempt to solicit work from you, offering to repair or rebuild your home for what appears to be a low price. Although you may be anxious to get things back to normal, avoid acting too quickly. Take the time the figure out exactly what you want done, and make sure the contractor addresses all your concerns. Make sure to get at least three competitive bids that are based on the same set of specifications before making your decision. Remember, if something seems “too good to be true” it probably is.

Must a contractor be licensed?

State law requires that contractors (other than owner/builders) working on any job that requires $500 or more of work be licensed by the California Contractors State License Board (CSLB). Ask to see the contractor’s license (called a “pocket license”) that has the license number on it (state contractor’s licenses are solely numeric; no alphabetic characters are included in them), as well as an additional form of identification for verification (the contractor’s license should be in the contractor’s own name). You can verify a contractor’s license status by using the CSLB’s web site at www.cslb.ca.gov or CSLB’s toll-free automated telephone system at (800) 321-CSLB. The CSLB has also established a hotline for disaster victims only at (800) 962-1125; it operates from 8 a.m. to 3 p.m. Monday through Friday.

Do I need a written contract?

State law requires that home improvement contracts for $500 or more to be in writing. Note that anything you sign could be used by a contractor as authorization to go forward with a project, so do not sign anything until you completely understand what it is.

Can I change my mind after I sign the contract?

California law allows you to cancel a contract within three business days of signing it, provided that the contract was solicited someplace other than the contractor’s place of business (such as in your own home). The law requires the contractor to give you written notice of this right to cancel.

How much can a contractor require as a down payment?

California law limits the amount of the down payment for any home improvement contract (except for swimming pools) to the lesser of $1,000 or 10 percent of the contract price (excluding finance charges). The down payment for a swimming pool may not exceed $200 or two percent of the contract price (excluding finance charges), whichever is less. As a general rule, never make cash payments to contractors.

How can I make sure the work progresses as scheduled in the contract?

In general, a contract must provide a description of the work to be done, the time period in which it is to be done (including the date on which “substantial commencement of work” should occur), the materials to be used, and the equipment to be used or installed. Contractors often ask that you make progress payments to them as the work progresses. California law requires that the contract specify all the work that is to be completed before a progress payment is made. California law also requires that the progress payment cannot exceed more than 100% of the value of the work performed up to that point. Finally, it is customary to make the last payment a “retention” payment, ordinarily 10 percent, which you retain until the job is completed and the governing jurisdiction(s) has approved all work.

What happens when the contractor uses subcontractors or suppliers?

You will need to protect yourself from liens against your property in the event the contractor does not pay the subcontractors or suppliers. California’s Mechanics’ Lien Law allows those who furnish labor or materials to your home to record a lien against your home if they are not paid, even if you have paid your general contractor in accordance with the contract. At its most extreme, a lien may cause your property to be foreclosed if you are unable to pay it. At the very least, a lien will make your property more difficult to finance or sell.
California law requires that the contractor provide you with a Notice of the Mechanics’ Lien Law. That notice suggests steps you can take to protect from liens against your home, such as requiring:

• your contractor to set aside for you a payment and performance bond to pay for any liens that may be placed;
• that payments to subcontractors or suppliers be made by you directly or by a funding or escrow service; and
• your contractor to provide you with unconditional “Waiver and Release” forms signed by each subcontractor or supplier involved.

Note that the general contractor also can place a lien on your house if you fail to pay for his or her services.

What effect does an arbitration clause have in my contract?

By agreeing to arbitrate your dispute, you are agreeing to have a dispute with your contractor decided by a neutral third party (known as the arbitrator) rather than by a judge or jury (unless the arbitration is nonbinding). Many consumers prefer arbitration to court proceedings because, generally, arbitration is less expensive. However, if you proceed with binding arbitration, you waive almost all grounds for seeking review of the arbitrator’s decision; in almost all circumstances, the arbitrator’s decision will be the final decision, even if you think the arbitrator made a mistake of fact or law.

What is the effect of a clause allowing the contractor to recover attorneys’ fees and costs from me if there is a dispute?

Generally, in a legal dispute, each side pays its own attorneys’ fees and costs. However, an attorneys’ fees clause means that, should the contractor prevail in a dispute in arbitration or in court, you will have to pay the contractors’ attorneys’ fees and costs. California law provides a reciprocal benefit with respect to attorneys’ fee clauses; that is, should you be the prevailing party rather than the contractor, you may recover your attorneys’ fees and costs despite the fact that the clause may not specifically provide that you are entitled to do so.

A man, who said he was a contractor, offered to clean up my property, assess the damage to it for the purpose of obtaining grants and loans, and rebuild my house for $50,000, with just $5,000 down. Fortunately, I have the money available; should I hire him?

Before hiring anyone as a contractor or other service provider in connection with damage to, or destruction of, your property, you should take care to be an “aware consumer.” As discussed above, if a person represents himself as a contractor, you should obtain his contractor’s license number and check that it is valid. Additionally, most, if not all, entities and programs that will provide property owners with funds to rebuild or replace damaged property have their own inspection/assessment programs. As a result, unless the funding entity instructs you otherwise, you need not hire a private person or firm to perform an inspection of your property as part of the application process.

Although my primary residence, which I own, was not destroyed during the fires, it was damaged and is no longer habitable. Can I get any assistance to repair my house?

Yes, in addition to charitable grants or loans or insurance proceeds, FEMA and the SBA may be able to help with repairs.

FEMA, through its Home Repair Assistance program, provides grants to homeowners whose primary residences require relatively little repair to essential living areas in order to become livable or accessible. (Repairs to nonessential living areas, such as guest rooms or an additional bathroom, as well as cosmetic repairs, are not eligible for funding under the program.) The repairs must be able to be completed within 30 days of the start of work, cannot exceed a maximum repair amount set by FEMA, and must be necessary as a result of damage from the wildfires; deferred maintenance is not covered by the program.

If you apply for Home Repair Assistance, FEMA will inspect your home and base the amount of its grant on the reasonable cost of repair to the damaged property.

Repairs covered by Home Repair Assistance include:

• repairs to plumbing, electrical systems, heating systems, fuel systems for cooking, septic systems, and water wells;
• repairs to windows, doors, roof, and floor;
• repairs to stoves and refrigerators;
• repairs necessary to provide access to a residence;
• repairs necessary to eliminate health and safety hazards.

If you own a mobile home and it is your primary residence, Home Repair Assistance will cover repair costs related to blocking, leveling and anchoring the mobile home.
If your home needs more extensive repairs than allowed under the FEMA program, then the SBA may be of help, as described in response to the question about rebuilding after complete destruction of a residence, above.