Suing Unlicensed Contractors and Solar Installers for Fraud in Hawaii

Renovating a home or installing a new solar energy system in Hawaii should be an exciting upgrade. Unfortunately, the islands have a persistent problem with fraudulent home improvement companies and unlicensed contractors. Whether you are living in Ewa Beach, Kailua, or Hilo, bad actors often take large upfront deposits and simply abandon the job, or perform work that is so defective it violates local building codes.

Hawaii law heavily penalizes unlicensed contracting and provides robust protections for consumers facing construction fraud. Understanding how to leverage state regulatory bodies, how to access the state's recovery fund, and when to file a civil lawsuit is vital to getting your money back. This guide breaks down the legal process for suing dishonest contractors, highlights common scams in the solar and roofing industries, and shows how finding a construction defect attorney in our directory can help you secure justice.

Step-by-Step Process to Sue a Fraudulent Contractor in Hawaii

Holding a bad contractor accountable involves interacting with multiple state agencies before heading to court. Here is the recommended path.

Step 1: Check the Contractor's License Status

Before doing anything else, you must determine if the person you hired is actually licensed. You can verify this through the Department of Commerce and Consumer Affairs (DCCA) Professional and Vocational Licensing search. If they are unlicensed, their legal standing is severely crippled. They cannot legally sue you for unpaid work, and they can face criminal misdemeanor charges for operating without a license.

Step 2: File a Complaint with the RICO Division

If the contractor committed fraud, abandoned the job, or performed terrible work, you should file a formal complaint. You can submit Form Contractor, Hawaii, Regulated Industries Complaints Office, Complaint Form - Contractor or submit your report through the official RICO Online Complaint Filing Portal to the Regulated Industries Complaints Office, Honolulu. The RICO division will investigate the contractor. If they find severe violations, they can fine the contractor or move to revoke their state license.

Step 3: Applying to the Contractor Recovery Fund

If the contractor was properly licensed when you hired them, but they stole your money or breached the contract, you have a unique safety net. Under Haw. Rev. Stat. § 444-26, injured homeowners can apply to the Contractors Recovery Fund. If you win a judgment in court against the licensed contractor and they declare bankruptcy or refuse to pay, the fund will pay you up to $12,500 per contract to cover your losses.

Step 4: Filing a Civil Lawsuit

To access the recovery fund or to get your money back from an unlicensed scammer, you must file a lawsuit. Under Haw. Rev. Stat. § 657-1, the statute of limitations for filing a breach of contract lawsuit is six years. Depending on your location and the amount of damages, your lawyer will file the case in a court like the First Circuit Court, Honolulu or the Third Circuit Court, Hilo. A crucial supreme court precedent in Butler v. Obayashi, 71 Haw. 175 (HI Supreme Court 1990) affirms that unlicensed contractors are barred from enforcing contracts in court under Haw. Rev. Stat. § 444-22, leaving them entirely legally exposed when you sue them for fraud.

High-Value Construction Micro-Niches

Deceptive Solar Power Purchase Agreements (PPAs)

Hawaii leads the nation in solar energy adoption. Unfortunately, aggressive door-to-door salespeople often trick homeowners into signing Power Purchase Agreements (PPAs). They promise "free solar panels" but lock the homeowner into a 20-year lease with escalating monthly payments and put a lien on the house. If a solar installer lied about tax credits or forged your signature on financing documents, they have violated Hawaii's Unfair and Deceptive Acts and Practices (UDAP) laws under Haw. Rev. Stat. § 480-2.

Roofing Scams After a Hurricane

Whenever a tropical storm or hurricane grazes the islands, out-of-state "storm chasers" flood the state. These unlicensed roofers demand large cash deposits for emergency roof tarping and repairs, only to disappear overnight. Because they have no local ties and no Hawaii contractor's license, tracking them down is difficult. Always demand to see their local DCCA license card before signing any repair contract.

Pool Construction Abandonment

Building a custom pool in Hawaii is a massive investment, often exceeding $100,000. Unethical pool contractors frequently employ a "front-loading" scam, where they demand 80% of the contract price just to dig a hole and pour the concrete shell, and then abandon the project to start another one. This leaves your backyard as a dangerous mud pit for months. This constitutes a severe breach of contract and fraud.

How Much Does it Cost in Hawaii?

Taking legal action against a bad contractor involves several costs:

• Attorney Fees: For large construction defect cases, attorneys often charge an hourly rate of $250 to $450. However, if your lawyer is suing the contractor for a UDAP violation, the judge can order the contractor to pay your attorney's fees if you win.
• Expert Witnesses: You will likely need to hire an independent licensed contractor to inspect the defective work and testify in court. This usually costs between $1,000 and $3,000.

How Long Does the Process Take?

If you are simply filing a complaint with RICO, the administrative investigation can take 6 to 12 months. If you are pursuing a civil lawsuit in Circuit Court to secure a judgment and access the Contractor Recovery Fund, the process can take 1.5 to 3 years due to court backlogs and the complex discovery process required for construction defects.

Frequently Asked Questions (FAQ)