I recently received a question at a seminar I was teaching regarding the hiring of vendors. An association was having difficulty finding a licensed and bonded painter to paint the exterior of all the buildings at the association and was considering hiring an unlicensed or bonded painter to do the work. The association was thrilled about the lower cost, but, a few members of the board were worrying about liability and they asked me to weigh in on this matter…
My best advice… Hire licensed, bonded and insured contractors for projects that under Arizona law requires you to hire licensed and bonded contractors.
Arizona law requires contractors to be licensed through the Arizona Registrar of Contractors. A.R.S. 32-1151 sets forth Arizona’s contractor licensing requirements. It is unlawful for a person to even submit a bid or respond to a request for a proposal for construction services without having a license. There is an exception known as the “Handyman Exemption” which is contained in A.R.S. 32-1121(A)(14). A.R.S. 32-1121(A)(14) permits a person who does not hold a contractor’s license to bid and accept work when the job (contract price, labor and materials) amounts to less than $1,000.
Here are some tips for selecting a vendor:
Check a vendor’s references, do financial research to see if the vendor is solvent, check for licensing, type of bonds held, insurance coverage, check the Better Business Bureau, the Arizona Registrar of Contractors for licensing and the vendor’s complaint background. Additionally, investigate for technical training, certifications and any professional designations that are appropriate to the scope of work to be completed.
It appears that the repainting project at your association will exceed $1,000 and in my opinion, it is best practice and the law for the Association to hire a licensed, bonded and insured contractor for this project. It may be tempting to hire the “cheaper” vendor that is unlicensed, but, this could result in your Association paying a lot more in the long run if problems develop during or after the painting project.
If the Association uses a licensed and bonded contractor, it will have legal remedies with the Arizona Registrar of Contractors in the event that the contractor doesn’t perform or performs the work below an acceptable standard. And, in the event the contractor is injured on the job, the contractor will have insurance to cover his/her medical expenses for the injury.
The Arizona Registrar of Contractor’s Office has a user friendly website with great information. Check their website for license and bond information and for complaints or disciplinary action against a prospective contractor.