Arizona Financial Responsibility & the License Bond
Arizona backs its licenses with a contractor's license bond and expects applicants to show financial strength. This chapter covers the bond requirement, its purpose, and how net worth is measured.
The contractor's license bond
Before a license issues, the applicant must post a contractor's license bond (or an approved cash deposit) under A.R.S. §32-1152, in an amount the Registrar sets based on the license class and the contractor's volume of work. The bond is a condition of licensure, not an optional add-on.
Purpose of the bond
The license bond gives injured parties - owners, workers, or suppliers - a source of recovery when a contractor violates the licensing statutes or breaches a construction contract. It is a consumer-protection device; it does not guarantee the contractor a profit or pay the contractor's own taxes.
Measuring net worth
Financial strength is shown on the applicant's financial statement, where net worth (owner's equity) equals total assets minus total liabilities. For example, $250,000 in assets against $160,000 in liabilities yields a net worth of $90,000. An accurate statement is the foundation of the ROC's confidence in the applicant.
State-specific details
State exam facts
- State regulator
- Arizona Registrar of Contractors (ROC)
Does Arizona require a state contractor license?
Yes. The Arizona Registrar of Contractors (ROC) licenses contractors under A.R.S. Title 32, Chapter 10 in Commercial, Residential, and Dual scopes. Handyman/casual work under $1,000 is exempt (A.R.S. §32-1121); unlicensed contracting is a class 1 misdemeanor (A.R.S. §32-1164).
What exam does Arizona require for a contractor license?
Applicants must pass the Statutes and Rules Exam (SRE). It is waived only for someone who was a qualifying party on an Arizona license within the previous five years. The ROC does not publish the SRE question count, time limit, or passing score in the candidate bulletin.
Who is protected by the Arizona Residential Contractors' Recovery Fund?
The Recovery Fund (A.R.S. §32-1131 et seq.) is available only to owners who used a licensed residential contractor; there is a two-year complaint period (A.R.S. §32-1155).
Sources: https://roc.az.gov