Recent Changes in Laws Governing Licensing and Complaints
2011 amendments to Arizona licensing laws include some important provisions – a few of which are discussed below – that many contractors will appreciate.
This article appeared in the July 2011 issue of "The Construction Advisor"
published by Lang & Klain, P.C.
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An amendment to
A.R.S. § 12-1365 changes the timeframe within which a buyer of a new home
may file an ROC complaint. It also reduces confusion as to when the clock starts
to run. Now, complaints against a licensed contractor must be
filed within two years after (a) close of escrow or (b) actual occupancy, which occurred
first. (Before this change went into effect, the complaint had to be filed
within two years of the date of occupancy or discovery of the defect.)
Notification of the right to file a complaint must be
included in the construction contract, in 10-point type.
Display of License Number
32-1124 now requires a contractor to include its license number in all broadcast,
published, internet or billboard advertising, including letterhead and other
documents that the contractor uses to correspond with customers or potential
customers. (Previously, the requirement was less broad, applying only to advertising
or printed materials.) While the new statutory language does not mention email,
contractors would be wise to include their license number in their email
signature as well.
Deletion of "Wrongful" Act
In a welcome change to
A.R.S. § 32-1154, which lists the grounds for license suspension or
revocation, the word “wrongful” has been removed from subsection (A)(7). The
statute now provides that “[t]he doing of a fraudulent act by the licensee as a
contractor resulting in another person being substantially injured” is grounds
for disciplinary action. The good news for contractors: It is harder to prove that a contractor committed a
“fraudulent” act than merely a “wrongful” one.
Exemption from Discipline
Another favorable change, to
A.R.S. § 32-1155, provides that a contractor will
not be disciplined for workmanship or for deviation from code, plans or standards if:
the contractor is not given an opportunity to inspect the work within 15 days of
the Registrar’s notice (even if a corrective work order has not yet been issued),
the contractor’s work has been subject to neglect, modification or
to the slow economy and pressures on the State budget, the Residential Contractors’ Recovery
Fund balance is at an all-time low. As a result, the Fund is stingier, and
taking longer, in
making payouts to homeowners. However, when a payout is made, the Fund and the
Attorney General are more likely than before to try to recover the payout from the