A.R.S. 32-1139: The $200,000 Recovery Fund Cap Per License

There is a second ceiling on Arizona's recovery fund that homeowners often miss. A.R.S. 32-1139 caps the fund's total liability at $200,000 for any one contractor's license. The per-claim limit of $30,000 protects you individually. This per-license limit protects the fund when one bad contractor harms many homeowners at once. Once the combined payouts hit $200,000, the fund stops, and claimants share what is left. This page explains the cap and how the math hits real claimants.

The $200,000 per-license ceiling

This number is fixed in the statute and sits on top of the individual cap. The operative language:

The liability of the fund shall not exceed two hundred thousand dollars for any one residential contractor's license.

That is the total the fund will ever pay for a single license, no matter how many homeowners were harmed. When the claims add up to more than $200,000, the law does not pay them in full. It splits the pool:

...the claims shall be paid based on a pro rata share of the common liability.

Pro rata means proportional. If valid claims total $400,000 against one license, every claimant collects about half of their otherwise eligible amount, because the $200,000 has to stretch across all of them. After the cap is reached, no further fund recovery is allowed against that license.

What this means for you

Picture a developer-builder in Casa Grande who takes deposits on ten homes, does failing work on all of them, then folds. Each family has a $30,000 fund-eligible claim, so the claims total $300,000. The fund caps out at $200,000 for that one license. The ten families do not each get $30,000. They split $200,000 pro rata, which works out to about $20,000 each instead. The math is real, and it punishes the families who file last as much as the rest.

Two takeaways. First, the recovery fund is strongest when only one or two homeowners are harmed by a contractor, and weakest in a mass failure, which is exactly when people lean on it most. Second, do not assume a contractor with the right license is safe just because the fund exists. The cap means a large or repeat failure can blow past the fund entirely. Vetting the builder's track record and finances up front, which is how Jematell Homes operates, beats relying on a shared pool of money.

How this connects to the rest of the fund rules

This per-license cap works together with the per-claim cap in A.R.S. 32-1132.01 : your claim is limited to $30,000, and the license total is limited to $200,000, whichever bites first. To recover at all you must be eligible under A.R.S. 32-1132 , define your claim under A.R.S. 32-1131 , and file in time under A.R.S. 32-1133 . For the process, see how to file an ROC complaint and recovery fund claim and the ROC glossary entry .

Full text and source

Read the current version on the legislature's site: View A.R.S. 32-1139 on azleg.gov .

How the cap applies when multiple claims compete depends on the facts, so confirm with the ROC or a qualified attorney before relying on it.