A.R.S. 32-1152: The License Bond Every Arizona Contractor Must Carry

Every licensed contractor in Arizona has to post a license bond before the Registrar of Contractors (ROC) will issue or renew the license. A.R.S. 32-1152 sets this rule. A license bond is a financial guarantee a surety company sells to the contractor; if the contractor breaks the rules or leaves a job unfinished, an owner can make a claim against it. This page explains who must bond, how big the bond is, and what it actually protects.

What this statute says

A.R.S. 32-1152 says the ROC cannot grant an original license, and cannot renew one, unless the contractor has a bond (or an approved cash deposit) in full force. The bond runs to the State of Arizona for the benefit of anyone the contractor harms. Here is the core rule:

Before granting an original contractor's license, the registrar shall require... a surety bond... or a cash deposit.

The dollar amount is not one flat number. It scales with the license class (residential vs. commercial, general vs. specialty) and with the contractor's annual work volume. The figures the ROC uses by rule run roughly like this:

• Residential general (B class): $5,000 to $15,000.
• Residential specialty: $1,000 to $7,500.
• Commercial general: $5,000 up to $100,000 for the largest firms.
• Commercial specialty: $2,500 up to $50,000.

The bigger the company's yearly volume, the bigger the bond. A contractor who also wants to qualify for the Residential Contractors' Recovery Fund posts an additional bond tied to that fund.

What the bond pays for

The bond is not insurance for the contractor. It protects you and the people the contractor hires. If a residential contractor takes your deposit and walks, does defective work, or fails to pay a supplier, a homeowner, subcontractor, or material supplier can file a claim against the bond. For example, on a $40,000 kitchen remodel in Mesa, if your contractor abandons the job after collecting $18,000, you can claim against the bond up to its face amount. A $7,500 residential specialty bond will not cover a $40,000 loss in full, which is exactly why the bond is a floor, not a ceiling, and why the separate Recovery Fund exists.

The statute also controls how a bond can shrink or end. A surety that wants to cancel must give the ROC written notice not less than thirty days before the cancellation takes effect, and if a cash deposit is drawn down the contractor has thirty days to top it back up. If the bond lapses, the license cannot renew.

How this connects to other rules

The bond is one of three layers of financial protection in Title 32, Chapter 10. The bond here is the first claim source. A.R.S. 32-1132 opens the Residential Contractors' Recovery Fund for losses a residential contractor's bond cannot cover, and A.R.S. 32-1132.01 caps a Recovery Fund claim at $30,000. The license the bond protects is issued under A.R.S. 32-1124 and kept current under the renewal rules in A.R.S. 32-1125. Before you sign, confirm your builder is bonded and licensed by checking the Registrar of Contractors license lookup, walked through in how to verify an Arizona contractor license with the ROC . If a job goes wrong, the bond and the fund are both in play, as covered in how to file an ROC complaint and recovery fund claim .

Full text and source

Read the current section, including the exact bond schedule and amendments, on the legislature's site: View A.R.S. 32-1152 on azleg.gov .

The right bond amount and how a claim is decided depend on the facts, so confirm details with the ROC or a qualified professional before relying on it.