The Headaches of Fighting an ROC Complaint

At the Arizona Registrar of Contractors, residential builders face special problems that they may not be equipped to handle

Most residential builders fall into one of two categories: those who have experienced a Registrar of Contractors hearing, and those who believe they never will.

If you are a member of the first group, you know the aggravation, cost and injustice of an ROC complaint. If you are in group two … well, just wait. Any of the following can be the basis of a ROC complaint:

• failure to fulfill the terms of a construction contract

• poor workmanship

• failure to comply with a Corrective Work Order

• performing work outside the scope of a license

• hiring unlicensed contractors

• abandonment

• failure to pay subcontractors or suppliers

• building code violations or failure to comply with safety or labor laws

• deviation from plans or specifications

• use of false, misleading, or deceptive advertising.

Resolution without a hearing. After the Registrar notifies you that a complaint has been filed, you will have an opportunity to resolve the problem and notify the inspector assigned to the case.

Treat this as your opportunity to shine. If you do, you will have a better chance of resolving the problem without going to a hearing. In addition, you may convince the inspector that you have made every effort to resolve the problem and that the homeowner won’t be pleased until you build the Taj Mahal.

If the homeowner is not satisfied with your efforts in response to the complaint, they can request a jobsite inspection. In such a case, you should arrive at the inspection with your subcontractors, your calendar and your telephone, so that you can arrange to make any necessary repairs on the spot, with all parties present.

If a Corrective Work Order is issued, notify the inspector in writing every time you take corrective action and get the work done in the time required. The inspector has to know that you are doing the work and doing it on time. Be sure to document all attempts to perform corrective work, as denial of access is a valid (and common) defense to a Corrective Work Order. When the homeowner then reports new complaints, your pattern of good behavior will already be known to the inspector.

Hearing. If the homeowner isn’t satisfied with the corrective work, they can ask the inspector to set a hearing. Otherwise, the ROC will send you a Citation and Complaint. You must file your written response within ten days. A hearing will then be set to determine if the ROC should take disciplinary actions.

To help you understand the challenges that await you here are nine things to remember about fighting a Registrar of Contractors complaint.

1. There is little downside for a homeowner in filing a frivolous complaint. The homeowner does not have to pay a filing fee or hire an attorney. If you hire an attorney and win at the hearing, the homeowner does not have to reimburse you for legal fees. No matter how frivolous the complaint is, the homeowner is not subject to civil penalties.

2. Power rests with an administrative law judge who may not have a background in construction. He or she may preside over an ROC hearing one day and a Liquor Department case the next. Their lack of specialization makes it hard to get a good read on how they are likely to rule.

3. Favorable contract language often is not recognized by inspectors or enforced against consumers. The appearance of a model home becomes the standard, regardless of contract language to the contrary. Signed waivers of minor plan discrepancies, changes in specification, and square footage disclaimers may not be given any weight.

4. The hearing officer does not tell you how to rectify the defect. Your license may be at risk if you pick the wrong solution, and it gives the consumer leverage in negotiating a settlement.

5. The ROC can order you to correct items that you had already agreed to correct. Even if you offered to do the required work and the consumer would not let you, the order to perform the work is a black mark on your record at the ROC.

6. Complaints become part of your company’s permanent record, regardless of who prevails in the hearing. If a prospective buyer calls the Registrar and asks how many complaints have been filed against you, the ROC staff does not tell them how many complaints were dismissed or how many went to a hearing at which you prevailed. A complaint is a complaint, except in rare cases when the caller asks for details. Your complaint record can be introduced as evidence in future hearings, even if the complaints were about defects that are unrelated to the complaint at hand.

7. You may encounter problems with complicit subcontractors. If the consumer does not name a potentially liable subcontractor, should you bring in the subcontractor as a party? Doing so may help you avoid an unfair decision. However, the subcontractor may turn the tables and claim that you created the problem (that puts another blemish on your license). Also, dragging the subcontractor into the complaint deprives you of a potentially favorable witness. If you want to keep your options open, put language in your contract that binds the subcontractor to the ROC hearings.

8. If you control the homeowners association, you have extended responsibility for subdivision or condominium common areas. As a general rule, you are on the hook for acts that occur within two years before an ROC complaint is filed (per A.R.S. § 32-1155). By Registrar policy, this time period is extended to two years from the date you cease to control the homeowners association.

9. An ROC hearing is no place for do-it-yourself representation. Being a successful builder does not mean you will be an equally successful advocate for your case in an administrative hearing. Most contractors are not trained or experienced in hearing preparation (reviewing inspectors’ notes, subpoenaing witnesses, etc.), and they routinely get sandbagged at the hearing when additional complaints surface. That lack of experience can prevent you from recognizing and taking advantage of procedural and evidentiary exceptions that might support an appeal.

Do not take an ROC hearing lightly. The Registrar can revoke or suspend your license for even small matters if they are not handled in a proper and timely fashion.

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