A.R.S. 32-1131: Who and What the Recovery Fund Covers (Definitions)

The Arizona residential contractors' recovery fund can pay you back when a licensed contractor does bad work and cannot or will not make it right. A.R.S. 32-1131 is the section that sets the words the whole fund runs on. It looks small, but it draws the line around who is covered. If a key word does not fit your situation, the fund does not pay, no matter how bad the work was. This page explains the three defined terms and why they matter before you ever file a claim.

What this section defines

A.R.S. 32-1131 gives plain meanings to three terms used all through Article 1.1 of the contractors law. Here is the operative language:

"Assessment" means the contribution by a contractor to the residential contractors' recovery fund. "Fund" means the residential contractors' recovery fund. "Residential contractor" means a contractor as defined in section 32-1101 who is licensed to perform work on residential property pursuant to this chapter and who engages in residential contracting.

The one that controls your claim is residential contractor. Three things must all be true. The person must be a contractor under A.R.S. 32-1101 . They must hold a license to work on residential property. And they must actually be doing residential contracting. Miss any one of those and the recovery fund is closed to you.

The fund itself is the pool of money the Arizona Registrar of Contractors (the ROC ) keeps to pay valid claims. The assessment is the money licensed contractors pay in to build that pool. Contractors fund it, homeowners draw from it.

What this means for you

Say you hire a builder in Cave Creek for a custom home and the work fails. Before you count on the recovery fund, confirm the builder held a residential license at the time. A handyman with no license is not a "residential contractor" under this section, so the fund cannot pay you. That is the single most common reason a fund claim dies, and it traces straight back to the definition here.

This is why checking a license number on roc.az.gov before you sign matters so much. The recovery fund is one of the strongest reasons to hire only licensed help in Arizona. An unlicensed person may be cheaper up front, but you give up this safety net. Jematell Homes carries an Arizona residential license on every build, which is what keeps the fund available to the homeowner if anything ever goes wrong.

How this connects to the rest of the fund rules

This section is the front door. Once you fit the definition of a person harmed by a residential contractor, the next sections decide the rest: who counts as an eligible claimant in A.R.S. 32-1132 , how much you can recover under A.R.S. 32-1132.01 , and the deadline to file in A.R.S. 32-1133 . For the step-by-step process, see our guide on how to file an ROC complaint and recovery fund claim .

Full text and source

Read the current version on the legislature's site: View A.R.S. 32-1131 on azleg.gov .

How these definitions apply to a specific dispute depends on the facts, so confirm your situation with the ROC or a qualified attorney before relying on it.