Filing a Bond Claim in Arizona
Arizona has its own laws and regulations related to filing a bond claim against a contractor. Familiarizing yourself with the Arizona bond claim process is necessary to avoid nonpayment issues for your work on a construction project. If you’re unsure of where to start or what steps to take for securing your due pay, ConstructionDisputes.com’s document management and communication platform helps you to better understand the Arizona bond claim process and your options to obtain payment owed to you by a construction project owner or a contractor.
How to File a Bond Claim in Arizona
For subcontractors and laborers, the most important bond to be aware of is the payment bond in Arizona. This bond acts as a safety net to ensure that you receive payment for the work and/or materials you have supplied to a construction project. As such, your first step in making a claim against a payment bond is to check whether or not you’re actually eligible to make the claim.
Not everyone who worked on a construction project will be able to make a claim against a surety bond. Arizona law says that any party that has supplied labor or materials to either the prime contractor or a first-tier subcontractor is eligible to make a claim against the bond. However, any Arizona contractors, subcontractors, and material suppliers below that tier are ineligible.
After making sure you have the right to file a bond claim, you should proceed to follow these steps:
- Preliminary Notice – Like most other states, the initial step in your Arizona bond claim process is to file a Preliminary Notice. This notice secures your right to make a claim later on and is required of any subcontractor, laborer, or material supplier who did not directly contract with the prime contractor. The Arizona payment bond statute of limitations states it must be sent no later than 20 days after your first day of work and needs to include a description of labor or materials provided, your name and address, the name of the person you contracted with, and a description/address of the project itself.
- Notice of Bond Claim – Once you have filed your Preliminary Notice, the next step would be to fill out a Notice of Claim. Arizona law dictates the bond claim must be submitted no later than 90 days after the last day you supplied labor or materials to a project. In your Notice of Bond Claim be sure to include a description of your labor/materials provided, your name and address, the name and address of the general contractor, a description of the project, the amount you’re claiming, and a clear statement demanding payment.
- Serve the Bond Claim – After you’ve successfully filled out your Arizona Notice of Claim form, you next need to deliver it to the appropriate parties. Arizona bond claim laws require that this notice be delivered to the general contractor of the project. Though the general contractor is the only required recipient by law, sending it to the Arizona surety bond company that issued the bond is also advised as it can tremendously help your claim.
- File a Lawsuit – In many situations, serving your bond claim will be enough to receive your payment. However, there is a chance that your claim and payment will be denied. Should this happen you would then need to proceed with a lawsuit. These lawsuits can be both time-consuming and expensive and they provide no guarantee you will receive your payment. As such, this step should be reserved as only a final effort.
ConstructionDisputes.com’s unique document and communication platform helps you to best manage all of these different steps of the Arizona bond claims process and the documents needed to successfully obtain the payment you are due.
How do you get Bonded in Arizona?
In order to be bonded as a contractor, you need to meet all of the Arizona bonding requirements and obtain an Arizona contractor license bond. This bond is required by the Arizona State Registrar of Contractors and you won’t be able to commence work until you have one. The cost of each Arizona contractor bond will differ based on your volume of work and license classification.
The Arizona Registrar of Contractors rules for obtaining an Arizona contractors bond are:
- Identify a qualifying party who meets licensing requirements for your classification
- The qualifying party must pass several required examinations including a business management one
- Both applicant and qualifying party are required to submit to background checks
- Form and register as a legal entity
- File project verification and experience forms alongside application
- Pay any required fees
- Provide a government issued form of ID
- Submit application and any other required documents to Arizona Registrar of Contractors
Arizona Bond Claim FAQs
What is a Surety Bond in Arizona?
A surety bond acts as a promise between three parties to fulfill their end of the contract or otherwise be held liable for any financial losses incurred. The three parties are the surety who issues the bond, the principal who purchases the bond, and the obligee, the party who can make a claim against the bond. In order to obtain a bond, you’ll need to meet all of the Arizona surety bond requirements.
How Much Does a Surety Bond Cost in Arizona?
Generally, if you’re purchasing a construction bond, Arizona surety bond companies will usually charge you between .05% and 2% of the bond’s value. When looking to buy a surety bond in AZ, prices will vary based on a few factors, including the project details and your credit score. Location can also affect the price of your surety bond. Phoenix, AZ for example may have a company that will charge you more than say a surety company in Tucson. This is why you should always get multiple quotes, so you can compare and contrast each company’s surety bond Arizona cost.
How do you File a Lien in Arizona?
In order to file a lien in Arizona, you must first submit a Preliminary Notice. Arizona lien laws require this notice be filed within 20 days of first providing labor or materials. Next, you would then file a Notice of Intent to Lien. This notice has a deadline of 120 days after the project has been completed. The last step is to file the lien itself.
Get Help with your Arizona Bond Claim from ConstructionDisputes
You’ve done your job, now it’s time for us to do ours. When you use ConstructionDisputes.com to manage your claim, you’ll have the support of an expert team. Our streamlined process takes only minutes to file and ensures that every claim made with us is in accordance with all the necessary federal, state, and bonding company requirements.
We also provide our users with access to a variety of helpful online tools to make sure your bond claim is handled as efficiently and quickly as possible. Sign up for the pricing plan that’s right for your business and start filing your first claim for free today!