A.R.S. 32-1132: Who Can Claim From Arizona's Recovery Fund

Arizona's residential contractors' recovery fund only pays certain people. A.R.S. 32-1132 is the section that draws that circle. The short version: you usually need to own the damaged home and live in it (or plan to), and the contractor must have been properly licensed when the work began. This page walks through the eligible groups and the conditions, so you can tell early whether the fund is even an option for you.

Who the fund is for

The fund exists to repay people harmed by a licensed residential contractor's bad acts. The statute lists the groups who can claim:

A natural person who is damaged by an act, representation, transaction or conduct of a residential contractor that is a violation of this chapter or the rules adopted pursuant to this chapter may recover from the fund.

In practice the eligible claimants fall into five buckets:

• Individual owners who occupy, or intend to occupy, the damaged home as their primary residence.
• Limited liability companies (LLCs) that own the home, where at least one member lives in it as a primary residence.
• Revocable living trusts that own the home, where the trustors live in it (or intend to) as a primary residence.
• Planned communities or unit owners' associations ( HOAs ), once the builder has handed over control, for damage to common areas.
• Lessees who contracted with the builder and occupy the home as a primary residence.

The thread tying these together is the primary residence. The fund protects homeowners, not investors. A rental you never live in, or a flip you sell, generally does not qualify.

The license condition that makes or breaks a claim

Eligibility is not just about you. The contractor had to be appropriately licensed at the right moment. The statute requires the license to have been valid (not canceled, expired, suspended, or revoked) when the contract was signed, when the first payment was made, or when work started. If the contractor was unlicensed at those points, the fund is closed, which is why this rule ties back to the definitions in A.R.S. 32-1131 .

What this means for you

Imagine you buy a newly built home in Fountain Hills, move in, and a year later the foundation cracks because of poor work. You own it, you live in it, and the builder was licensed when the job started. You fit A.R.S. 32-1132, so the recovery fund is on the table once you win an order against the builder. Now imagine the same house, but you bought it to rent out and never lived there. The fund likely will not pay, because you are not an owner-occupant.

Two practical takeaways. First, confirm the builder's license was active at signing, not just today. Second, keep proof that the home is your primary residence, like your driver's license address and utility bills, because the ROC will ask.

How this connects to the rest of the fund rules

Eligibility here is step one. After you qualify, the dollar limit on what you can collect comes from A.R.S. 32-1132.01 , the per-license cap from A.R.S. 32-1139 , and the filing deadline from A.R.S. 32-1133 . For the full process, see how to file an ROC complaint and recovery fund claim and our page on the new home builder warranty in Arizona .

Full text and source

Read the current version, including every eligible-claimant subsection, on the legislature's site: View A.R.S. 32-1132 on azleg.gov .

Whether you qualify depends on your facts, so confirm with the ROC or a qualified attorney before relying on it.