A.R.S. 32-1185: Stopping Work for Nonpayment in Arizona

Arizona's prompt-pay rules set a deadline for the owner's payment, and A.R.S. 32-1185 is the enforcement half: it lets a contractor legally stop work when that deadline is missed. After at least 7 days written notice of nonpayment, the contractor can suspend or even terminate the contract, and is not treated as having breached it. This page explains the trigger, the notice, and what it means for your build.

What this statute says

When an owner fails to make a payment that has been certified and approved, A.R.S. 32-1185 gives the contractor a remedy other than just suing. The contractor can suspend performance or terminate the contract, but only after giving written notice and waiting out a notice period. The default for the owner's nonpayment is at least 7 days:

If an owner... fails to timely pay a contractor... the contractor may, on giving the owner... at least seven days' written notice, suspend performance or terminate the contract.

A contractor who follows this process is protected. Stopping work for nonpayment is not a breach:

A contractor or subcontractor that suspends performance or terminates a contract as provided in this section is not deemed in breach of contract.

The contractor may also recover the cost of getting back to work after a suspension:

The contractor or subcontractor is entitled to recover... reasonable costs of demobilization, delay and remobilization.

The section sets shorter notice periods for subcontractors in some situations (for example, a 3-day notice when both the owner and the contractor have failed to pay), and the party who prevails in a payment dispute can recover costs and attorney fees.

What it means for your home build

The practical takeaway for a homeowner is direct: pay your approved draws on time, or the build can lawfully grind to a halt. For example, on a custom home in Fountain Hills, suppose a $90,000 framing draw was deemed approved but you do not pay it. Your contractor can send written notice and, after at least 7 days, walk off the job without breaching the contract. When you do pay, you may also owe the reasonable costs to remobilize the crew, plus the 1.5 percent monthly interest from the prompt-pay rule.

This is why payment timing is not a soft deadline. If you genuinely dispute a billing, object in writing during the review window rather than just withholding payment, since silence followed by nonpayment hands the contractor this remedy. Tie your payments to a draw schedule keyed to finished work, and make sure any disputed amount traces back to a written change order so both sides know exactly what is owed.

How this connects to other rules

This section is the enforcement partner of A.R.S. 32-1182, the prompt-pay rule that sets when an owner's payment is due. Where 32-1182 starts the clock and adds interest, 32-1185 gives the contractor the power to stop work if the clock runs out. Both connect to the payment stages your contract must spell out under A.R.S. 32-1158. To set up payments that avoid this entirely, see construction loan draw schedules explained , what to include in a custom home contract , and cost-plus vs fixed-price home contracts .

Full text and source

Read the current section, including the full subcontractor notice rules, on the legislature's site: View A.R.S. 32-1185 on azleg.gov .

How the rule applies to a specific dispute depends on the facts, so confirm details with a qualified professional before relying on it.