Arizona Registrar of Contractors Has Made Sweeping Changes to Contractor Regulation

The Arizona Registrar of Contractors has been substantially revising the Arizona Administrative Code Rules applicable to it.  These changes are not just small alterations; the Registrar has made sweeping and fundamental changes to how it will go about the business of contractor regulation. These new changes are going into full effect beginning July 1, 2014. What is groundbreaking about these changes?  Primarily, it is the fact that the Registrar has completely changed the process of bringing and prosecuting complaints.  Complainants will no longer be responsible for or capable of bringing an administrative action against the license.  Instead, the complainant will make a complaint to the Registrar.  The complaint will be assigned to an inspector, who will make the initial determination of whether there is a violation of the licensing statutes and rules.  The inspector will advise the legal division, who in turn will be solely responsible to decide whether to proceed with a complaint and how to handle that complaint. Previously, every complaint was referred for hearing if the complainant requested it.  This resulted in a lot of complaints going to hearing that did not need to – e.g., where a complainant’s claim did not actually or even apparently allege a violation of the licensing statutes.  The Registrar expects that the new changes will substantially reduce the number of complaints that proceed to a hearing.  Also, the new changes permit the Registrar with new options for resolving complaints, including issuing a letter of concern, issuing a written directive, issuing a citation, or diversion to arbitration. Contractors need to be aware that because the Registrar now decides which cases get prosecuted, settling with the complainant, while probably a mitigating factor, will no longer be a guarantee of no action by the Registrar. As the complainant is no longer the prosecuting party for the complaint, a complainant has been relegated to the role of witness in his or her case.  This makes it even more important than before for the complainant to provide a thorough and well-documented complaint, as the information in the complaint may determine at the outset whether the complaint makes it past the initial review process.  It may also limit the extent of the violations and evidence to be presented against the contractor. Also, though it is impossible to divine the full effect of these changes due to their newness, complainants can expect that these changes will also change how and whether complainants continue to use the Registrar’s administrative processes to bring a recovery fund action. Aside from the complaint process, the Registrar has also made changes in licensing.  Among other changes, it has revamped the license classifications, and reduced their number.  This may mean that contractors who previously qualified and had licenses, or who are seeking to engage in a limited subtrade, may find that they have to get additional training to get or maintain their license. These are but a few examples of the changes and their affect on contracting in Arizona.  Future articles will address specific issues.  In the interim, if you are presently interacting with the Registrar on a complaint or licensing issue and would like help, please feel free to contact our construction lawyers at 480-222-2225 or to contact us by email to set up an appointment. This article is for general information only and not to be construed as legal advice or the basis for formation of an attorney-client relationship between the reader and the author.