According to A.R.S. Title 32, what happens to a contractor's license if the qualifying party leaves the company?
Correct Answer
D) License remains valid for 90 days to find replacement
Arizona law allows 90 days to replace a qualifying party before the license becomes invalid, during which time the contractor may continue operations.
Why This Is the Correct Answer
A.R.S. Title 32 provides a 90-day grace period when a qualifying party (the individual whose license, exam, and experience qualifies the contracting entity) leaves the company. During this 90-day window, the company may continue operating while it recruits, hires, and obtains ROC approval for a new qualifying party. If no replacement is approved within 90 days, the license becomes invalid and the company must cease contracting.
Why the Other Options Are Wrong
Option A: License is automatically transferred to senior employee
The license is not automatically transferred to a senior employee. Arizona law requires the qualifying party to hold the appropriate license and meet experience requirements — these cannot be automatically assigned to another person regardless of their seniority.
Option B: License remains valid for 180 days with restricted activities
180 days with restricted activities is incorrect on both counts. The grace period is 90 days, not 180, and the contractor is not restricted to limited activities during this period — they may continue normal operations for the 90-day window.
Option C: License is immediately suspended until new qualifying party is approved
Immediate suspension would be overly punitive and would not allow the company any reasonable time to find a replacement. Arizona law recognizes that qualified personnel changes are a business reality and provides the 90-day grace period to prevent unnecessary business disruption.
Memory Technique
Remember '90 days to find your QP' — Qualifying Party. It rhymes and locks in the correct timeframe. Think of it as a 3-month job search window: the company has a quarter of a year to replace its key licensed individual before the license lapses.
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A contractor files a preliminary 20-day notice on January 15th for work that began on January 10th. The work was completed on February 20th. What is the last day to file a mechanics' lien under Arizona law?
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