The Registrar of Contractors (“ROC”) is likely the most important Arizona agency for businesses in the construction industry. While the ROC may be a familiar entity for Arizona businesses, construction companies outside the state (e.g. California, Utah, Colorado, Texas, New Mexico, Nevada) planning to work in Arizona should familiarize themselves with the agency and all of its requirements before bidding on any work in Arizona.
The ROC has a broad mission to “Protect the health, safety and welfare of the public through a regulatory system designed to promote quality construction by Arizona contractors.” Much of the ROC’s work is focused on protecting owners and consumers, and the ROC’s website has resources owners and consumers can turn to and investigate. For example, owners can use the ROC’s website to determine if a contractor is licensed before hiring them for work. Further, the ROC’s website can direct homeowners to other programs, like the Recovery Fund.
For businesses, the ROC’s relevant scope includes licensing contractors and investigating contractors’ work. The first one, licensing, can be a costly trap for the unwary business. Pursuant to statute, a contractor, which has its own definition and includes (but is not limited to) someone who supervises constructing or altering a structure, must be licensed before performing contracting work or even submitting a bid or responding to a request for qualifications. There are numerous consequences if you improperly proceed without a license. For example, if an unlicensed contractor bids on a contract worth more than $1,000, they cannot get a license for a year after the bid (though there are exceptions). Another, perhaps overlooked but potentially severe consequence, is that contractors must be licensed at the time of contracting and at the time the cause of action accrues in order to be successful in a civil lawsuit to collect compensation for that project. If not properly licensed, you could be giving away your work.
Given the importance of licensing, businesses need to plan ahead because the licensing process is not instantaneous and there are a number of procedural requirements, including examinations. However, as previously noted in this July’s Under Construction, Arizona has recently made changes designed to facilitate recognition of out-of-state licenses. But even with a streamlined process, it is important to start the process early to allow for time to address unexpected developments.
Turning to the second goal, the ROC, by statute, has the power to investigate an issue once there is a complaint, or on the registrar’s own motion. The investigation process is generally governed by statutes and regulations and includes complaints, inspections, and citations. Ultimately, if not resolved earlier, there are administrative hearings before the Office of Administrative Hearings. The administrative hearings are distinct from a traditional trial and governed by different regulations.
In summary, before bidding work in Arizona, businesses related to the construction industry would benefit from a familiarity with the ROC and its requirements. A basic understanding can undercut any licensing or investigation issues and may even prove helpful if there is a problem with work someone does for you (e.g. a project at your house).
