Most Arizona contractors know what the Arizona Registrar Of Contractors Recovery Fund is. Most residential homeowners do not. The Registrar set up the recovery fund to provide financial protection for residential homeowners to compensate them financially for defective workmanship. All licensed residential contractors contribute to the fund. The fund does not accept claims from anyone but residential homeowners who are homeowners as defined in the applicable statute. There are two methods for an aggrieved homeowner seeking a payout from the Arizona Registrar Of Contractors Recovery Fund. The first is by accessing the fund via the administrative process, via A.R.S. 32-1154 (G), the second method is to file a civil action (A.R.S. 32-1136) against the licensed contractor and the Arizona Registrar Of Contractors.
When a homeowner chooses to pursue the later route and obtains a default judgment against the licensed contractor this does not automatically entitled the homeowner to a payout from the Arizona Registrar Of Contractors Recovery Fund. In Magnus v. Arizona Registrar of Contractors, the Court held despite the fact the homeowner obtained a default judgment against the contractor, the Registrar of Contractors was still entitled to object to the payout at which point the trial Court was obligated to conduct a hearing to determine if the homeowner was in fact entitled to a payout from the Arizona Registrar Of Contractors Recovery Fund.
Both methods are along process and in the end even if the homeowner is entitled to a recovery fund claim, there have to be funds in the Arizona Registrar Of Contractors Recovery Fund. Sometimes it can take up to two years after judgment for a homeowner to receive payment out of the Arizona Registrar Of Contractors Recovery Fund.
