Surety Bond Encyclopedia

Contractor License (Residential only) Bond - Statewide in Arizona

Brief Summary

An Arizona residential license bond is small, between $4,250 and $15,000, but the amount has to match both your classification and the volume you expect, and the Registrar of Contractors makes choosing the right tier the applicant's job. The bond and the Residential Recovery Fund assessment are both required before a residential license issues.

Every Arizona residential contractor files a license bond with the Registrar of Contractors under A.R.S. 32-1152. General residential contractors in classifications such as B, B-3, B-4, B-5, B-6 and B-10 post $9,000 if anticipated annual gross volume is under $750,000 and $15,000 at $750,000 or more. Specialty residential contractors in the R classifications post $4,250 under $375,000 and $7,500 at $375,000 or more. On top of the bond, residential licensees pay the Residential Recovery Fund assessment or post a separate $200,000 bond.

We can help with all Arizona bonds!

How to Apply for a Contractor License (Residential only) Bond:

Decide whether your classification is general residential (B series) or specialty residential (R series).
Estimate anticipated annual gross volume and pick the tier: $750,000 for general, $375,000 for specialty.
Use your name exactly as on your government ID or Arizona Corporation Commission records, with any DBA.
Have the surety issue the bond on the Registrar's form with a real bond number, notarized attorney in fact signature and seal.
Submit the bond with your ROC application and pay the Residential Recovery Fund assessment, or post the separate $200,000 bond.
Keep the bond in force and raise it if your volume crosses the threshold.

Detailed Information About the Arizona Contractor License (Residential only) Bond:

Two tiers, and which one you are in

Arizona sizes a residential license bond by two things, whether the license is general or specialty, and the anticipated annual gross volume of residential work.

General residential (B, B-3, B-4, B-5, B-6, B-10): $9,000 for volume less than $750,000, $15,000 for $750,000 or more
Specialty residential (R classifications): $4,250 for volume less than $375,000, $7,500 for $375,000 or more

The Registrar puts the burden on the applicant to file a bond in the amount required for the classification and anticipated annual gross volume. A contractor who expects to grow past the threshold during the license term can raise the bond at any time. Lowering it is only allowed at renewal.

The bond is only part of the residential picture

Under A.R.S. 32-1152, the residential license bond is for the benefit of people who furnish labor, materials or construction equipment used on residential work, and of claimants described in A.R.S. 32-1132. It also secures sums owed to the Registrar. Separately, every residential applicant must pay the Residential Recovery Fund assessment or post an additional $200,000 surety or cash bond, which the statute reserves solely for actual damages suffered by claimants described in section 32-1132.

Fees for a two year residential license

General residential, new: $180 application, $320 license, $370 Recovery Fund, $870 total
Specialty residential, new: $80 application, $270 license, $370 Recovery Fund, $720 total
General residential renewal: $590 including the $270 assessment
Specialty residential renewal: $540 including the $270 assessment

A license cannot be renewed unless the bond or cash deposit is in full force.

Filing details the Registrar checks

The Registrar's bond form with an actual bond number. Binders are not accepted
Name line matching the license application exactly. Sole proprietors use the name on their government ID plus any DBA. Entities use the name on Arizona Corporation Commission records plus any DBA
Notarized attorney in fact signature and the surety's seal
Effective date within six months of submission and not future dated
Continuous term, with at least 30 days written cancellation notice from the surety to the contractor and the Registrar
A cash deposit with the state treasurer may replace the surety bond and is released two years after the license ends if no claims are pending

Eligibility and Requirements for a Arizona Contractor License (Residential only) Bond:

Bond of $9,000 or $15,000 for general residential, or $4,250 or $7,500 for specialty residential.
Surety authorized to do business in Arizona, or a cash deposit for the same amount.
Residential Recovery Fund assessment or an additional $200,000 bond.
Effective date within six months of filing and not future dated.
Continuous bond with 30 days cancellation notice to the contractor and the Registrar.
Bond in full force before any renewal.

Arizona Contractor License (Residential only) Bond FAQs:

How much is the bond for a B general residential license?

$9,000 if your anticipated annual gross volume is less than $750,000, and $15,000 if it is $750,000 or more.

How much is the bond for an R specialty residential license?

$4,250 if anticipated annual gross volume is less than $375,000, and $7,500 at $375,000 or more.

Who can claim against the residential bond?

People who furnish labor, materials or construction equipment used on a residential job, claimants described in A.R.S. 32-1132, and the Registrar for sums owed. The separate $200,000 bond, posted instead of the Recovery Fund assessment, is reserved for actual damages suffered by 32-1132 claimants.

Can I lower my bond if business slows down?

Only at renewal. The bond can be increased at any time, but a decrease waits until the next renewal.

What problems does the Registrar look for on a bond?

A binder instead of a bond number, a name that does not match the application, a missing notary or seal, or an effective date more than six months old or set in the future.