2023 Arizona Revised Statutes › Title 32 - Professions and Occupations › § 32-1158.02 - Residential construction contracts

32-1158.02.
Residential construction contracts
A. For residential repair or replacement of damage resulting directly from a catastrophic storm in a specific area that is designated by an insurer,  in addition to the requirements of section 32-1158,  a licensed contractor who enters into a contract for the repair or replacement of a residential roof or other repair or replacement within the scope of the regulation of this chapter with a purchaser who resides in the residence or who intends to reside in the residence after the completion of the contract shall include at least the following provisions:
1. A statement in at least ten-point bold type in substantially the following form: " You may cancel this contract at any time within seventy-two hours after you have been notified that your insurer has denied your claim to pay for the goods and services to be provided under this contract."
2. A statement in at least ten-point bold type in substantially the following form: " You may cancel this contract at any time,  for any reason,  within four business days after signing this contract."
3. A copy of a repair estimate that contains the following disclosures:
(a) A precise description and location of all damage claimed on the repair estimate.
(b) For roofing repair or replacement,  a detailed description of the work to be done including the square footage of the repair area or the replacement area.
(c) If the damaged areas are not included in the repair estimate,  a specification of those areas and any reason for their exclusion from the repair estimate.
(d) Whether or not the property was inspected before the preparation of the estimate and the nature of that inspection,  specifically whether the roof was physically accessed.
(e) That a contractor has made no assurances that the claimed loss will be covered by an insurance policy.
(f) That the policyholder is responsible for payment for any work performed if the insurer should deny payment or coverage for any part of the loss.
B. A residential owner of a property or casualty insurance policy has the right to cancel the contract described in subsection A of this section within seventy-two hours after the insured owner has been notified by the insurer that the claim has been denied.
C. In addition to the right prescribed in subsection B of this section,  the insured owner of a residence has the right to cancel the contract described in subsection A of this section for any reason within four business days after signing the contract. A cancellation shall be evidenced by the insured owner giving written notice of cancellation to the contractor's address stated in the contract. Notice of cancellation does not need to be in a particular form except that the notice must indicate in writing the intent of the insured owner not to be bound by the contract.
D. Within ten days after a contract has been canceled pursuant to this section,  the contractor must tender to the insured owner any payments made by the insured owner and any note or other evidence of indebtedness except that if the contractor has performed any emergency services,  the contractor is entitled to receive reasonable compensation for the services if the insured owner has received a detailed description and itemization of the charges for those services.
E. The down payment section on the execution of a contract entered into pursuant to this section shall not require more than fifty per cent of the total contract.
F. Any changes,  additions or deletions to the work order specified in the original contract shall be included in a written change order that is signed by the homeowner.
G. A contractor shall immediately notify and disclose in writing to the residential owner of a property or casualty insurance policy any cancellation of the contractor's workers' compensation coverage.
H. A contractor's failure to comply with this section is grounds for license suspension or revocation pursuant to section 32-1154.
I. An individual or contractor who prepares a repair estimate for post-storm repair or replacement services as described in subsection A of this section in anticipation of making an insurance claim must disclose the following information to the insured owner:
1. A precise description and location of all damage claimed or included on the repair estimate.
2. Documentation to support the damage claimed on the estimate,  including photographs,  digital images or another medium.
3. A detailed description and itemization of any emergency repairs already completed by the contractor.
4. If damaged areas are not included in the repair estimate,  a specification of those areas and any reason for their exclusion from the repair estimate.
5. A provision stating whether or not the property was inspected before the preparation of the estimate,  if the contract is a contract for repair or replacement of a roof,  and whether the roof was physically accessed.
6. A provision stating that the contractor has made no assurances that the claimed loss will be covered by an insurance policy.
J. If an insured owner submits a claim with the insurer for residential repair or replacement pursuant to this section,  the contractor may not begin work on the repair or replacement until the insurer approves or denies the claim except if the work is necessary to prevent further loss.
K. A person who is not licensed pursuant to this chapter and who is not exempt from licensure pursuant to this chapter may not bring a private cause of action to recover monies from a homeowner for any residential repair or replacement that the person does pursuant to this section.
L. Except as otherwise provided in this subsection,  a contractor providing post-storm repair or replacement contracting services shall not act on behalf of an insured owner in negotiating for the settlement of a claim for loss or damage under any policy of insurance covering the insured owner's residence and shall not make any assurance that the proposed repair or replacement contracting services will be covered by an insurance policy. The contractor may communicate with an insurer to assist in any claim disputes,  including actual damages incurred,  if both of the following apply:
1. The insured owner gives the contractor permission.
2. The contractor is not compensated for the communication.
M. With a policyholder's written consent,  an insurer providing coverage for a post-storm residential repair or replacement may issue its check in the name of both the policyholder and the contractor with the contractor's license number issued pursuant to this chapter noted on the check.
N. This section shall not limit the following individuals from contacting and negotiating with the insured owner:
1. A government official engaged in the performance of official duties.
2. An attorney engaged in the performance of professional duties.
3. Licensed insurers and licensed insurance producers while engaged in the performance of their duties in connection with insurance transactions.
4. Any salaried office employee performing exclusively clerical or administrative duties and who is not compensated in any manner for securing contracts related to post-storm residential repair or replacement contracting.
5. Photographers,  estimators,  appraisers or engineers employed exclusively for the purpose of furnishing technical assistance.
6. A private investigator who is licensed pursuant to chapter 24 of this title.
7. A full-time salaried employee of a property owner or property management company who is retained by a property owner,  who has not been hired for the purpose of handling a specific claim resulting from a fire or casualty loss and who acts at the sole discretion of the property owner or management company regarding a claim related to the owner's property.