Construction & Contractor Disputes in Arizona
Patrick Nackley represents Arizona homeowners, investors, and business owners in disputes with contractors or handymen they hired to build, remodel, or repair their property. A deposit is paid and often the work stops, or the work is so poor that it requires fixing before any other work can proceed. A remodel may be finished entirely without meeting the requirements under the agreement, and the contractor will not come back. A water or fire remediation is invoiced in full and left incomplete. A retaining wall, roof, or pool fails within a year of a new build and the builder points at the soil, the subcontractor, or the owner. These are contract disputes with a construction problem attached, and they are won on the contract, the change orders, the photographs, and an expert who can say what the work should have cost and what it will cost to fix.
The contractor who abandoned the job is usually the contractor with no assets, and an owner who sues only the contractor often wins a judgment worth nothing. Arizona built other sources of recovery into the licensing statutes. Every licensed contractor posts a license bond under A.R.S. § 32-1152, and the statute allows a court to award attorney fees in a judgment. Residential contractors also participate in the Residential Contractors' Recovery Fund under A.R.S. §§ 32-1132 and 32-1132.01, which can pay an eligible owner up to $30,000.00. Each has its own eligibility rules, its own deadlines, and its own order of operations, and a step taken in the wrong sequence can foreclose one of them to you.
The bond has a deadline. Under A.R.S. § 12-1641, a surety may serve a written notice that starts a sixty day clock, and an owner who does not respond correctly can lose the bond entirely. If a letter from a surety is in your mailbox, the clock may already be running.
Mechanics liens run on their own clocks, and every one of them is short. A contractor or supplier must serve a preliminary notice within twenty days of first furnishing labor or materials under A.R.S. § 33-992.01 or the lien is invalid, must record the lien within the period set by A.R.S. § 33-993, and must sue and record a lis pendens within six months under A.R.S. § 33-998 or the lien expires. An owner has tools of the same kind. A recorded notice of completion can shorten the contractor's window, a surety bond under A.R.S. § 33-1004 removes the lien from the title and starts a ninety day clock on the party that recorded the lien, and A.R.S. § 33-1002 bars subcontractors and suppliers from liening an owner-occupied home at all unless they contracted directly with the owner. Patrick handles liens from both sides, foreclosing them for contractors who were not paid and defending owners against liens that were never valid.
What we handle
Representative matters.
Abandoned or stalled remodels and additions, including recovery of deposits and progress payments
Defective workmanship, work that must be removed and redone, and disputes over the cost of repair
Unfinished or overbilled water, mold, and fire remediation
Retaining wall, grading, drainage, roof, stucco, and pool failures in new construction
Contractor license bond claims under A.R.S. § 32-1152, including surety notices under A.R.S. § 12-1641
Registrar of Contractors complaints and hearings, and Residential Contractors' Recovery Fund claims under A.R.S. § 32-1132
Mechanics lien claims under A.R.S. §§ 33-981 to 33-1008, foreclosing them for contractors and defending owners against them, including discharge bonds and owner-occupant defenses
Purchaser Dwelling Act notice, inspection, and repair procedure under A.R.S. §§ 12-1361 to 12-1364, against builders and remodel contractors
Disputes with general contractors over change orders, allowances, and scope
How we approach it
A disciplined, strategy-first method.
Read the contract and the change orders first
Most contractor disputes turn on scope. What was promised, what was changed in writing, and what was changed by text message, or in some cases, by oral agreement.
Preserve the site before anyone touches it
Once the defective work is torn out, the evidence is gone. What gets documented, by whom, and in what form, determines whether the support for a claim is preserved or an expert's opinion survives cross examination.
Sequence the three sources of recovery
The contractor, the bond, and the Recovery Fund each have a different clock and a different procedure, and a filing that helps with one can hurt with another. The order is chosen at the start of the case.
Quantify before you demand
A demand that states the cost to complete, the cost to repair, and the amount overpaid, supported by a third party bid, settles more often than one that only states a grievance.
Frequently asked
Questions clients often ask.
- My contractor took a deposit and stopped showing up. What can I do?
- More than most owners realize, but less than most owners will be able to do next month if they wait. A lost deposit is one of the clearest claims in the licensing statutes, and it is recoverable from sources other than the contractor if the owner is eligible and deadlines are met. The deadlines are measured from the contractor's conduct, not from your discovery of it. Do not hire the replacement contractor until the site has been thoroughly documented in a way that will hold up (ex.: photos, videos).
- Can I collect from the contractor's license bond?
- Often, yes. Under A.R.S. § 32-1152 a residential owner damaged by a licensed contractor may sue on the bond, the bond stays open until it is exhausted, and the court may award attorney fees against it. The suit has a two year deadline. Note, a grievance alone is not sufficient to collect on a bond if a lawsuit has not been filed. A bond surety will demand a judgment or adjudication of the dispute with a definite sum of damages awarded. The surety also has a statutory tool under A.R.S. § 12-1641 that can end your claim if it is mishandled, and it arrives as an ordinary looking letter. If you have received anything from a bond surety with respect to a grievance or claim for damages, bring it with you to the first meeting.
- What is the Residential Contractors' Recovery Fund?
- A fund administered by the Registrar of Contractors under A.R.S. § 32-1132 that can pay an eligible claimant up to $30,000.00 for a licensed residential contractor's failure to adequately build or improve a home. Eligibility is specific, it excludes many owners, the contractor's license status on particular dates matters, and the fund does not pay attorney fees. Whether you qualify, and how the fund fits with a bond claim and a lawsuit, is a question worth exploring with counsel before any complaint is filed.
- Do I have to let the contractor try to fix the defect before I sue?
- Usually, yes, and not only for a new home. Arizona's Purchaser Dwelling Act, A.R.S. § 12-1361 et seq., requires written notice and an opportunity to repair before a dwelling action is filed, and its definition of a construction defect expressly includes repair, alteration, remodeling, and landscaping. A.R.S. § 12-1363 says an action filed without compliance shall be dismissed, and a dismissal after the limitations period bars the claim permanently. The notice has required contents, the seller has a fixed window to respond, and the statute tolls the limitations period while the process runs. Whether your claim is exclusively a dwelling action (most actions are not), and what the notice must say to qualify, are questions to address at a meeting with Patrick.
- A subcontractor recorded a lien on my house. Can they do that?
- Often not. A.R.S. § 33-1002 provides that no mechanics lien may be recorded against the home of an owner-occupant except by a person who contracted directly with that owner in writing. A subcontractor or supplier who was not paid by your general contractor generally cannot lien your residence, and the statute voids any waiver of that protection. Whether you qualify as an owner-occupant, and whether the lien is otherwise valid, depends on facts the statute defines precisely. A lien that should never have been recorded can be removed, and the court may award attorney fees to the successful party under A.R.S. § 33-998.
- My contractor says he will lien the property. How much time do I have?
- Less than you think, and so does he. The lien statutes impose a preliminary notice deadline, a recording deadline measured from completion, and a six month deadline to sue, and a lien that misses any of them is invalid. An owner can also record a bond under A.R.S. § 33-1004 that removes the lien from the title entirely and puts the lien claimant on a ninety day clock. Which of those applies to your project, and whether the contractor has already missed one, is something that Patrick will review.
- Is a small remodel dispute worth an attorney?
- Contractor disputes are taken on their merits regardless of amount. Where the contract has a fee clause, or the claim is against a license bond, the prevailing party may recover attorney fees, which changes the economics of a dispute that seems too small to litigate. Many of these resolve with a demand letter and a negotiated settlement.