SECTION 902 REGULATION OF CONTRACTORS

• Jurisdiction: Arizona

Section 902. Regulation of Contractors

(a) Registrar of Contractors

As to the immunity of the Registrar's office for negligent regulation, see Section 901(a) of the supplement above.

The court of appeals in Bentivegna v. Powers Steel & Wire Prods., Inc., 206 Ariz. 581, 585, 81 P.3d 1040, 1044 (App. 2004), clarified that the filing of a Registrar of Contractors' complaint by property owners is permissive only, and does not subject subsequently filed superior court action to the exhaustion of remedies doctrine.

(b) Requirement for License

In State of Ariz. v. Wilkinson,202 Ariz. 27, 39 P.3d 1131 (2002), the contractor was convicted of a misdemeanor for contracting without a license. The supreme court held that the homeowner was entitled to restitution from the unlicensed contractor in the criminal proceeding for damages directly caused by the criminal conduct.

In Bentivegna v. Powers Steel & Wire Prods., 206 Ariz. at 586, 81 P.3d at 1045, the court held that A.R.S. § 32-1153 only precluded the contractor from suing in order to collect monies owed arising under contract without first establishing that he was licensed when the cause of action arose and when the contract was entered into between the parties. A.R.S. § 32-1153 does not provide that monies already received by the unlicensed contractor may never be retained by him, nor does the statute provide that the customer of such unlicensed contractor may sue for restitution for sums already paid under a contractual agreement.

(c) Classification of Contractors

In Sanders v. Foley, 190 Ariz. 182, 945 P.2d 1313 (App. 1997), the court held that the B-1 General Commercial Contractor license held by the contractor did not permit the contractor to sue for compensation for remodeling work done on a residence. The court noted the differences between the requirements for commercial and residential contractors, discussed the "mutually exclusive nature of general commercial and residential licenses," and concluded that "a general commercial contracting license does not authorize residential contracting." As a result, the contractor was not a "duly licensed contractor" within the meaning of A.R.S. § 32-1153 and could neither recover on the contract with the owner nor record a mechanics' lien against the property.

(e) Suspension or Revocation

Paragraph 7, quoted in this section of the text, provides that a contractor may be disciplined for doing a "wrongful or fraudulent act . . . as a contractor resulting in another person being substantially injured." In Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 993 P.2d 1062 (App. 1999), the court held that the Registrar properly relied on this paragraph to conditionally suspend a contractor for falsely telling a home buyer that the contractor would build a retaining wall.

The court held in Bolser Enter., Inc. v....