A homeowner contracts for $42,000 of home improvements. After paying a $14,000 down payment, they discover the contractor is unlicensed. What recourse is available through the Arizona ROC?
Correct Answer
B) No recourse available since the contractor was unlicensed
The Residential Contractors' Recovery Fund only covers damages caused by licensed contractors. Unlicensed contractors are not covered by the fund.
Why This Is the Correct Answer
The Arizona Residential Contractors' Recovery Fund (administered by the ROC) is exclusively available to homeowners who hired licensed contractors. Because the contractor in this scenario is unlicensed, the fund provides no recourse. The homeowner's only options are civil litigation against the contractor directly — the ROC's consumer protection mechanisms do not extend to unlicensed activity.
Why the Other Options Are Wrong
Option A: Mediation services only
Mediation services through the ROC are available for disputes with licensed contractors. Since this contractor is unlicensed, the ROC has no jurisdiction over the dispute and cannot compel the contractor to participate in mediation.
Option C: Full reimbursement from the Residential Contractors' Recovery Fund
Full reimbursement from the Recovery Fund is incorrect for two reasons: (1) the fund only covers licensed contractors, and (2) even for licensed contractors, the fund has per-claim and per-license limits — full reimbursement is not guaranteed.
Option D: Partial reimbursement up to the fund's maximum limit
Partial reimbursement up to the fund's maximum limit is incorrect because the fund does not apply to unlicensed contractors at all. There is no partial coverage — the exclusion is absolute for unlicensed work.
Memory Technique
No license = No fund. The Recovery Fund only recovers what a licensed contractor took. An unlicensed contractor isn't in the ROC's world — the homeowner must fight alone in civil court.
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Previous Question
A residential contractor in Arizona completes $45,000 worth of work on a custom home. The homeowner fails to pay the final invoice of $8,500. Under A.R.S. 33-981, what is the deadline to record a mechanic's lien?
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Which entity in Arizona has the authority to investigate unlicensed contracting activity?