Contractor License (Residential and Commercial COMBINED LICENSE) Bond - Statewide in Arizona

Brief Summary

A dual license bond is one bond with two separate amounts. The Arizona Registrar of Contractors wants the residential part and the commercial part each sized to the volume you expect in that kind of work, and each written out on the bond. Getting both figures right the first time keeps a combined license application from coming back.

Arizona dual licensed contractors, such as the KA, KB-1, KB-2 and CR classifications, post a single license bond whose penal sum is split into a residential amount and a commercial amount under A.R.S. 32-1152. Each part is set by the anticipated annual gross volume for that side of the business, using the residential and commercial tables published by the Registrar of Contractors. Liability is limited to the amount stated for each part. Dual licensees also pay the Residential Recovery Fund assessment or post a separate $200,000 bond.

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How to Apply for a Contractor License (Residential and Commercial COMBINED LICENSE) Bond:

• Estimate anticipated annual gross volume separately for residential work and for commercial work.
• Match each figure to the correct table: general tables for KA, KB-1 and KB-2, specialty tables for CR.
• Use the business name exactly as on the license application and Arizona Corporation Commission records, with any DBA.
• Have the surety issue one bond on the Registrar's form with the penal sum split into a residential amount and a commercial amount.
• Confirm the notarized attorney in fact signature, surety seal and an effective date within six months that is not future dated.
• File the bond with the ROC application and pay the dual license fees, including the Residential Recovery Fund assessment.

Detailed Information About the Arizona Contractor License (Residential and Commercial COMBINED LICENSE) Bond:

One bond, two amounts

Arizona does not accept a single undivided figure on a dual license bond. The Registrar's bond instructions require that the penal sum be separated into the residential amount and the commercial amount, and the dual bond total is the two combined. The Registrar's own example reads CR-11 ELECTRICAL: $4250 RESIDENTIAL, $2500 COMMERCIAL. Under A.R.S. 32-1152, liability under the bond is limited to the amount set for each part.

How each part is sized

A general dual license (KA, KB-1, KB-2) combines the general residential and general commercial tables. A specialty dual license (CR) combines the specialty residential and specialty commercial tables.

Residential portion

• General: $9,000 if anticipated annual gross volume is less than $750,000, $15,000 at $750,000 or more
• Specialty: $4,250 if less than $375,000, $7,500 at $375,000 or more

Commercial portion, general

• $150,000 or less: $5,000
• Over $150,000 to $500,000: $15,000
• Over $500,000 to $1 million: $25,000
• Over $1 million to $5 million: $50,000
• Over $5 million to $10 million: $75,000
• Over $10 million: $100,000

Commercial portion, specialty

• $150,000 or less: $2,500
• Over $150,000 to $500,000: $7,000
• Over $500,000 to $1 million: $17,500
• Over $1 million to $5 million: $25,000
• Over $5 million to $10 million: $37,500
• Over $10 million: $50,000

Who each part protects

The residential part answers to people who furnish labor, materials or construction equipment for residential work and to claimants described in A.R.S. 32-1132. The commercial part answers to licensees and to owners, co-owners and lessees of nonresidential property who are damaged by the contractor's failure to build or improve a structure in line with applicable codes. Both parts also secure sums owed to the Registrar.

The Recovery Fund still applies

Because a dual license includes residential work, the applicant must pay the Residential Recovery Fund assessment or post an additional $200,000 bond. The Registrar's fee schedule lists a two year general dual license at $1,050 for a new license, including the $370 assessment, and $750 at renewal. A specialty dual license is $850 new and $650 at renewal.

Bond terms

• Filed on the Registrar's bond form with a real bond number. Binders are not accepted
• Business name exactly as on the license application and, for entities, as on Arizona Corporation Commission records
• Notarized attorney in fact signature and the surety's seal
• Effective date within six months of submission and never future dated
• Continuous, with at least 30 days written cancellation notice to the contractor and the Registrar
• May be increased at any time but reduced only at renewal
• A cash deposit with the state treasurer may be used instead, released two years after the license ends if no claims are pending
• After a hearing the Registrar may require a bond of up to ten times the normal amount

Eligibility and Requirements for a Arizona Contractor License (Residential and Commercial COMBINED LICENSE) Bond:

• Surety authorized to do business in Arizona, or a cash deposit in the same amount.
• Residential and commercial amounts stated separately on the bond.
• Residential Recovery Fund assessment, or a separate $200,000 bond.
• Continuous bond with 30 days cancellation notice to the contractor and the Registrar.
• Bond in full force before the license can be renewed.
• Two year license term.

Arizona Contractor License (Residential and Commercial COMBINED LICENSE) Bond FAQs:

Official and Additional Resources for the Arizona Contractor License (Residential and Commercial COMBINED LICENSE) Bond: