Building and Repairing Without a License
An unlicensed landlord wins the right to perform repairs on his own buildings.
In 2001, a residential
landlord sued the Arizona Registrar of Contractors to establish that he was not
a contractor and, thus, did not need a contractor’s license to repair his own
buildings using his own employees.
The landlord, Barry
Levitan, owned two apartment complexes in Flagstaff that needed repairs. His
five-unit property needed a new roof, and one of the apartments in his 79-unit
complex had a stained toilet that had to be replaced.
The Registrar of
Contractors informed Levitan that he could not perform the repairs himself
unless he held a contractor’s license. Levitan had been a defendant in 13
different legal actions brought by the Registrar. He prevailed in all 13, but
the Registrar continued to insist that Levitan hold a contractor’s license
before repairing his property. So Levitan sued the Registrar.
What Is a Contractor?
The case rested solely on the definition of “contractor” contained in
A.R.S. § 32-1101(A)(3):
“Contractor” is synonymous with the
term “builder,” i.e., any person, association, or combination of them that,
for compensation, … does himself or by or through others, or directly or
indirectly supervises others to: (a) construct, alter, repair, improve, or
demolish any building, road, excavation or other structure, project,
development or improvement, or to do any part thereof, or (b) connect such
structure or improvements to utility service lines, metering devices, and
Arizona courts have held
that persons who conduct such activities are subject to the Registrar’s
jurisdiction and discipline, whether or not they hold a license.
In Levitan’s case, the
Arizona Court of Appeals ultimately held that he was not required to hold a
contractor’s license because he was not paid for performing repairs and
therefore was not doing the work “for compensation.” The court rejected the
Registrar’s argument that the rent Levitan received from tenants constituted
(During the course of the
litigation, Levitan agreed that he did not qualify for the owner-builder
exemptions contained in
A.R.S. § 32-1121. That statute provides that, as long as an apartment or
condominium complex has four units or less, the owner, his management agent, and
their employees may do the work necessary to repair and maintain the structures
without holding a contractor’s license.)
Similarly, a property owner may build on his own property
using his own employees if the structures are intended for occupancy solely by
the owner — not for use by employees or business visitors, and not for sale or
rent to the public.
An owner developing its
own property for sale or rent, or for occupancy by employees or business
visitors, must hold a valid contractor’s license or must contract the work to a
licensed general contractor or licensed specialty contractors. The licensed
contractors’ names and license numbers must appear in all sales documents so
that anyone injured by poor construction can identify the party responsible.