Arizona Handiman Exemption and Flipping

What can a handyman legally do in Arizona?

With so many licensed contractors out of business, looking for jobs, and watching numerous unlicensed “handyman” persons doing work that may require permits or are over $1,000 total expense, these licensed contractors are asking for help from the Registrar of Contractors.

First, what can a handyman do for a property owner under Arizona’s handymanexemption?

If you go to the Arizona Registrar of Contractor’s website looking for the handyman exemption, you will arrive at this page.  Then you will be directed to the Arizona Revised Statute 32-1121.

http://www.azleg.gov/ars/32/01121.htm

WHO IS EXEMPT?

The highlights of those who are exempt from having to have a contractor’s license:

5. Owners of property who improve such property or who build or improve structures or appurtenances on such property and who do the work themselves, with their own employees or with duly licensed contractors, if the structure, group of structures or appurtenances, including the improvements thereto, are intended for occupancy solely by the owner and are not intended for occupancy by members of the public as the owner’s employees or business visitors and the structures or appurtenances are not intended for sale or for rent. In all actions brought under this chapter, except an action against an owner-occupant as defined in section 33-1002, proof of the sale or rent or the offering for sale or rent of any such structure by the owner-builder within one year after completion or issuance of a certificate of occupancy is prima facie evidence that such project was undertaken for the purpose of sale or rent. For the purposes of this paragraph, “sale” or “rent” includes any arrangement by which the owner receives compensation in money, provisions, chattels or labor from the occupancy or the transfer of the property or the structures on the property.

What does this mean?

You can be an owner who does work on your home using your talents, “employee” talents (IRS withholding) for your own enjoyment.  You may not sell or rent your property for at least 1 year after improvements completed and should disclose that you were the owner-remodeler, used unlicensed contractors who were your employees, at the time you contract for rent or sale.

10. Employees of the owners of condominiums, townhouses, cooperative units or apartment complexes of four units or less or the owners’ management agent or employees of the management agent repairing or maintaining structures owned by them.

11. Any person who engages in the activities regulated by this chapter, as an employee of an exempt property owner or as an employee with wages as the person’s sole compensation.

14. Any person other than a licensed contractor engaging in any work or operation on one undertaking or project by one or more contracts, for which the aggregate contract price, including labor, materials and all other items, but excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, is less than one thousand dollars. The work or operations which are exempt under this paragraph shall be of a casual or minor nature.

16. A person who functions as a gardener by performing lawn, garden, shrub and tree maintenance.

This exemption does not apply:

(a) In any case in which the performance of the work requires a local building permit.

(b) In any case in which the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than one thousand dollars, excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, for the purpose of evasion of this chapter or otherwise.

(c) To a person who utilizes any form of advertising to the public in which the person’s unlicensed status is not disclosed by including the words “not a licensed contractor” in the advertisement.

Arizona Handyman “Sting” by the ROC

Recently 4 states:  Arizona, California, Oregon, and Nevada have begun to go after those not licensed and are doing work that required to have a contractor’s license.  They started with Craigslist.  It’s also illegal for the unlicensed contractor to advertise for work that takes them over $1,000.

What is the penalty to the unlicensed contractor?

It can be pretty brutal.  See the Arizona Revised Statute 21-1154.

With states cracking down on handyman exemptions and unlicensed contractors, it may be worth your while to negotiate with a licensed contractor when looking for someone to do your remodel work.

The Handyman Exemption is for small jobs or for those of you who are maintaining your property.

 

Kathy Howe

Lifestyles of Arizona LLC

  • Owner/Broker
  • Uptown Sedona Resident
  • West Sedona Business
  • kathy@kathyhowe.com
  • 928-274-4088

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