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Title 32 of the Arizona Revised Statutes contains requirements for certain professional groups the legislature wishes to regulate. Construction contractors are one of these professions, and a key regulatory component is the requirement of holding a valid license. This article will discuss the reasons for regulation, licensing requirements, exceptions to the licensing requirement, restitution, and criminal penalties for contractors who perform work without a license. A Phoenix contractor license violation attorney from Stone Rose Law is prepared to help you with your unique case, so call today for assistance.
The damages resulting from faulty electrical wiring in a home, or an improperly laid foundation, can be catastrophic. The same is true for public works projects such as poor construction when building a bridge or maintaining roads. Regulations were enacted to protect the public from contractors who engage in questionable business practices. One of these regulations is a license requirement.
A.R.S. § 32-1101(A)(3) defines the term “Contractor”:
(a) Is synonymous with the term “builder” and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:
This definition is broad. You will need a license to perform any action in the statute unless a valid exception exists.
Several groups of construction contractors are not required to hold a valid license. A few relevant exceptions are gardeners, maintenance staff working for the management agent of an apartment complex, and contractors selling and installing items worth less than $1000 that do not become a permanent fixture of the structure. Several jurisdictions refer to the last exception as a “handyman exception.”
Important to note are the complexities of the “handyman exception.” Arizona courts developed a special test to determine if an item is a fixture. Another aspect is the $1,000 ceiling for this exception. That cap is analyzed as a total including labor. The exception is also immune to gamesmanship. Large projects cannot be broken down into tens or hundreds of smaller tasks to avoid the licensing requirement. If you have questions about relevant exceptions and what they mean, please contact the Stone Rose Law Firm.
An area where construction contractors get into trouble is when they are unlicensed, are hired to supervise a job, and hire all licensed contractors to perform the work. This is not allowed unless the owner performs improvement work on their own property, using their employees or licensed contractors.
Restitution requires a party to compensate someone who was injured by their acts. Contracting without a license is a crime in Arizona. Criminal restitution is calculated as the amount of economic losses that flowed from the criminal activity in question. Construction contractors who operate without a license are typically responsible for the contract price minus any economic benefit enjoyed by the injured party. An unlicensed contractor is not responsible for damages due to unworkmanlike performance. However, restitution can be far greater when the economic losses are greater than the contract price. Paying restitution can be difficult for a contractor who will not hold a license for at least one year. Anyone who continues to work without a license faces increased fines, and the one-year suspension resets upon each subsequent conviction.
Contracting without a license is a class 1 misdemeanor. In addition to loss of license for a year, contractors who are convicted face a maximum of six months in jail and a fine not less than $1,000 if it is their first offense under A.R.S. § 32-1151. Two or more convictions require a fine not less than $2,000.
A contractor who misrepresented themselves as licensed can be found guilty of Fraudulent Schemes and Artifices which is a class 2 felony. First time, non-violent class 2 felons can face a sentence ranging from 3-12.5 years. Construction contractors can be found guilty of other severe offenses. An electrical engineer operating without a license can be convicted of negligent homicide or manslaughter. Those crimes are class 4 and 2 felonies, respectively. Both can require extensive jail time.
Stone Rose Law is a firm with extensive experience in criminal defense. Our managing attorney Colby Kanouse has years of experience defending construction contractors. Remember one thing from this article if nothing else. The Arizona Registrar of Contractors does not exist to protect your license and ensure your interests are addressed adequately during a proceeding. The Registrar’s job is to protect the public from contractors who engage in questionable business practices.
Please feel free to contact our contractor license violation lawyers in Phoenix as soon as the Registrar of Contractors begins their investigation. There is no guarantee that we can protect construction contractors from criminal prosecution. But we can guide you through the process and make sure your rights are respected at all times. If you have any questions related to construction contracting, or other criminal defense, give us a call at 480-498-8998 or fill out our online contact form and experience the difference Stone Rose Law can make.