Question: When we purchased our new home in Chandler last fall we knew that the builder of our new home was not a licensed contractor. The builder said that he had built the home as a retirement home for his parents, but his parents changed their minds and retired in South Carolina. We have had nothing but problems with our Chandler home, especially with the roof and plumbing. The builder has refused to talk to us. We filed a complaint with the Registrar of Contractors but they said that they could not help us because the builder was not a licensed contractor. Did the builder violate the law by building our Chandler home without a contractor’s license?
Answer: Probably. Under Arizona law an owner of any land can build a home on that land without obtaining a contractor’s license but only if the owner of the land intends to occupy the home, and does not intend to sell or rent the home. If the owner sells or rents the home within one year after completion of the home, the law presumes that, unless there is a “change in circumstances,” the owner never intended to occupy the home. Examples of “change in circumstances” are the owner losing his job and no longer being able to make the mortgage payments; or the owner building a home in the mountains like Flagstaff which aggravated a heart condition because of living in the high altitude. In your situation the owner never even intended to occupy the home, but intended for his parents to occupy the home. Therefore, your builder was required to have a contractor’s license.
Contracting without a license is a crime, namely, a Class One misdemeanor. Inasmuch as your builder was not a licensed contractor, the Registrar of Contractors did not have jurisdiction to require your builder to remedy any construction defects such as the roof and plumbing problems. Finally, even though your builder was not licensed, you can still recover damages in civil court for poor construction by your builder.
Note: If you are buying a new home you should always confirm with the Registrar of Contractors that the builder is a licensed contractor. If the builder is not a licensed contractor, and you still want to buy the new home, you need to have a home inspection by an engineer or a licensed contractor. A regular home inspector generally does not have the sophisticated training to discover major construction defects.