I have previously addressed the required minimum elements of Arizona construction contracts, which are set forth in A.R.S. § 32-1158(A). When it comes to contracts for the construction of residential in-ground swimming pools and spas, however, those minimum elements are not enough. Pursuant to A.R.S. § 32-1158.01(A), pool and spa contracts must also include several additional provisions. These additional provisions were recently tweaked by the Arizona Legislature through Senate Bill 1116, which became effective on August 9, 2017.
As amended, A.R.S. § 32-1158.01(A) mandates that contracts for construction of residential in-ground swimming pools and spas with purchasers who reside or intend to reside in the subject residence contain at least the following:
- The provisions required by A.R.S. § 32-1158.
- A provision allowing the purchaser to request (and pay for without a surcharge from the contractor) “standard contractor’s payment and performance bonds in a form approved by the registrar, securing the completion of the work and payment for materials and services.”
- The following payment provisions:
- “A down payment payable on the execution of the contract of not more than fifteen percent of the original contract price.”
- “After the completion of the excavation work on the swimming pool or spa, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser.”
- “After the installation of steel, plumbing and pneumatically applied concrete materials for the installation of a prefabricated swimming pool or spa, a payment of not more that twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser.”
- “After the installation of decking materials, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser.”
- “Before the application of the finishing interior materials or completion of all work on a prefabricated pool or spa, payment of all remaining sums due on the original contract plus any written change orders approved by purchaser.”
- A provision (in a form approved by the registrar and in 10 point type) giving the purchaser notice of his or her “right to receive written material that advises the purchaser of the provisions of [A.R.S. § 32-1158.01] and of the procedures provided by the registrar for the resolution of claims and disputes with licensed contractors.”
- A provision (in a form approved by the registrar and in 10 point type) advising the purchaser of his or her rights under Arizona’s home solicitation and referral sales laws, which are found at A.R.S. § 44-5001, et. seq.
The amended version A.R.S. § 32-1158.01(A) only differs from the previous iteration of the statue in a few respects. Most notably, the payment provisions have changed. The statute previously called for a $1,000.00 down payment and separate payments of no more than 30% of the contract price each after completion of excavation, installation of steel and plumbing, and installation of decking material, respectively. Now, contractors are able require down payments of up to 15% of the contract price, but can only require payments of no more than 25% of the contract price after each of the three subsequent stages of progress. In other words, contractors can now require larger down payments and, as a result, the amount of subsequent progress payments have necessarily been curtailed.
As set forth above, the amendments to A.R.S. § 32-1158.01 became effective on August 9, 2017. Accordingly, pool contractors should immediately ensure that their contracts and practices comply with the changes.