How to File a Bond Claim in Arizona
The State of Arizona requires contractors to provide financial protection to their customers and the public via construction bonds. When a contractor first becomes licensed the licensee must post a “License Bond”. These bonds range anywhere from $4,250 to $100,000.
License BondsSurety Bonds Can be Paid in a Few Different Ways: Cash, Certified Funds, or Surety Company
If the contractor posts the License Bond from a surety company then that insurance company will pay on behalf of the contractor if an error is proven to have occurred.
The first step to collecting on a contractor's surety bond is to file a written claim with the surety company itself. If the surety company will not voluntarily pay the claim then you must bring a lawsuit against both the Arizona contractor and the surety company. If you are successful in your lawsuit then you can use that judgment to obtain compensation from the surety company.
Contractor is Bonded through Cash or Certificate of Deposit
If the contractor posted its License Bond via a cash bond or certificate of deposit then only the contractor needs to be sued. A civil lawsuit must be brought against the contractor and after successfully obtaining a judgment you may file to collect from a contractor's cash bond or certificate of deposit. It is important to note that the judgment must specify that the claim can be paid from the cash bond or certificate of deposit assigned to the Registrar of Contractors. In cases where multiple judgments are received, cash bonds are disbursed in the order the judgments are received. So it is possible that a contractor's bond could be depleted before all parties make a recovery.
Statute of LimitationsIn Arizona, lawsuits against license bonds must be filed within 2 years of the act on which the dispute is based. So it is important to act promptly if any problems occur!