Overview of the ROC Complaint Process

The Arizona State Registrar of Contractors (the “ROC”) regulates Arizona’s construction trade through the licensing of contractors, the enforcement of Arizona’s contracting laws, and by investigating and resolving complaints relating to Arizona’s contractors. Complaints filed with the ROC are often preferable to litigation in Arizona’s court system because ROC complaints are usually resolved in less time than a lawsuit, potentially saving each party a significant amount of time and money. In typical ROC complaints, the prevailing party cannot be awarded monetary judgment against the opposing party, or its attorneys’ fees, but ROC complaints are still a meaningful method for resolving disputes in a fairly efficient manner. Even though the ROC will not award monetary judgments, the defending contractor has a strong incentive to comply with ROC orders because the contractor risks having its contracting license suspended or revoked if the ROC finds against the contractor. ROC complaints can be useful to contractors as well, because it allows the contractor to defend itself without going through an entire lawsuit. Below is a brief overview of the ROC complaint process.

Filing a Complaint

Any person or contractor with a grievance against a contractor may file a complaint with the ROC. Most complaints allege that the offending contractor harmed the complainant in some manner, usually through an allegation of poor workmanship. Arizona Revised Statute § 32-1154(A) lists the twenty-four grounds for which a contractor’s license may be revoked or suspended.

The complaint can be filed by filling out the ROC’s complaint form, found on its website, www.azroc.gov, or by sending a written notice to the ROC outlining the party’s grievance with the contractor.

The deadline for filing ROC complaints is generally two years after the commission of an act by the contractor causing the alleged violation of A.R.S. § 32-1154(A). In the case of new building construction, this two-year statute of limitations commences at the earlier of the close of escrow or actual occupancy of the new building.

In the complaint, a party must separately identify each and every allegation against the contractor. Only alleged violations that are separately numerically identified by the complainant will be investigated by the ROC. For example, if a homeowner alleges that a contractor improperly constructed 32 items in that person’s home, the ROC complaint must separately identify all 32 items. Any item left off the list will not be investigated by the ROC.

ROC Investigation

Upon receiving a complaint, the ROC will first determine if the contractor is licensed. If the contractor is not licensed, the ROC will gather evidence and refer the matter to the appropriate prosecutor’s office, if enough evidence is found. Unlicensed contracting is a class-1 misdemeanor in Arizona. Multiple unlicensed contracting convictions can rise to the level of a felony. If the complaint is against an unlicensed contractor, the ROC will not provide any further assistance, besides referring the unlicensed contractor for criminal prosecution.

If the contractor is licensed, the ROC will notify the contractor of the complaint and instruct the parties to resolve the complaint between themselves. If a resolution is not found, the ROC will send an inspector to the jobsite to review the contractor’s work and evaluate the merit of the complaint.

Corrective Work Order

If the ROC inspector finds contracting violations during the site inspection, the inspector will issue a corrective work order instructing the contractor to perform certain actions and providing a deadline for such compliance. The corrective work order will detail the items in the complaint that the inspector believes are the contractor’s responsibility to remedy.

Citation and Complaint

If the dispute is not resolved after the expiration of the deadline included in the corrective work order, either party may request that the matter be heard at an administrative hearing before an administrative law judge. After receiving such a request, the ROC inspector will evaluate the evidence and make a determination whether a hearing is warranted.

If a hearing is recommended, the contractor will be sent a citation and complaint outlining the alleged contracting violations. The contractor must provide the ROC with a written answer to the citation and complaint within 10 days. This deadline is extended by 5 additional days if the citation and complaint are sent via mail to the contractor. The ROC is required to either personally serve the contactor with the citation and complaint or to serve the contractor via registered mail.

If the contractor fails to timely provide a written response to the citation and complaint, a default decision and order will be entered against the contractor. This deadline is strictly enforced, so any contractor who wishes to defend against the alleged violations in the citation and complaint needs to promptly respond in writing or risk having their contracting license suspended or revoked.

Upon receipt of a written answer to the citation and complaint, the matter will be referred to the Office of Administrative Hearings (“OAH”). The OAH will schedule a hearing a few months after the case is referred to the OAH. The parties have the option of representing themselves at an OAH hearing or hiring an attorney to represent them. The rules of evidence and rules of procedure are slightly relaxed before an Administrative Law Judge (“ALJ”) at an OAH hearing, but the Administrative Procedure Act is still applicable. Hiring an attorney may aid the parties to present their evidence and make their arguments at the hearing.

Before the hearing, both parties may file certain pre-hearing motions and have subpoenas issued for witnesses or the production of documents. At the hearing, both parties can subpoena witnesses and present evidence in support of their case. The ALJ will listen to the evidence and write a decision within 20 days following the hearing. This ALJ decision is merely a recommendation for the ROC. Within 30 days of receiving an ALJ decision, the ROC may accept, reject, or modify the ALJ decision.

If the ROC rules against the contractor, the contractor’s license may be revoked or suspended. The ROC can also order the contractor to take certain actions, such as repairing the complainant’s home, in order to have its license reinstated or the suspension lifted.

Rehearing and Appeals

Following an ROC decision, either party may request a rehearing within 30 days or appeal the decision to Superior Court. A contractor who wishes to appeal an unfavorable decision should be sure to obtain a stay of the ROC’s order until the resolution of the appeal. It is recommended that anyone appealing an ROC decision meet with a licensed Arizona attorney familiar with such matters before filing such appeal.

Residential Recovery Fund

If the ROC suspends or revokes a contractor’s license following an ROC complaint by an owner who occupies or intends to occupy the home, the homeowner can make a claim against the ROC’s Residential Recovery Fund. The Recovery Fund allows homeowners who were injured by a contractor’s actions to receive up to a maximum of $30,000.00 for each contractor who damaged the homeowner, up to a maximum $200,000.00 payout per contractor. Certain procedures must be precisely followed to make a Recovery Fund claim. Some homeowners find it helpful to meet with an Arizona attorney familiar with such procedures before making such a claim.

Recommendations to Avoid ROC Complaints

The ROC complaint process is designed to encourage the parties to come to their own resolution. At multiple stages in the process, the ROC provides an opportunity for the parties to settle the dispute.

Once an ROC complaint is filed, however, it may already be too late for the parties to settle the dispute. The best method for resolving ROC complaints may be to resolve the dispute before it rises to the level of an ROC complaint. To do this, both homeowners and contractors should be sure to get everything in writing. Parties commonly dispute whether a certain item or work was even a part of the contract between the parties. Regular, open communication between a project owner and the contractor often resolves disputes before they escalate to the ROC complaint and administrative hearing stage.

Owners should ensure that any contractor who is hired is properly licensed. All contracting bids must include the contractor’s license number on the bid itself. Any homeowner interested in hiring a contractor should contact the ROC to determine if the contractor is properly licensed before hiring the contractor. As discussed above, if the contractor is unlicensed, the ROC will be of little assistance to an injured party.

Conclusion

As the ROC does not award financial compensation, complainants sometimes file complaints with the Superior Court while their ROC complaint is under investigation. The ROC and the Superior Courts share jurisdiction for resolving ROC complaints, and the final decision in either the Superior Courts or at the ROC are normally binding upon the parties in the other venue.

This article is not intended to be specific legal advice. It only provides general legal information. You should consult an Arizona licensed attorney if you have a legal issue. The Bainbridge Law Firm, L.L.C., is experienced in this area of law and are available for consultation. You may contact our Phoenix office at 602-902-1930.