Sec 32-1155.01. Arbitration process; applicability

A. Notwithstanding title 41, chapter 6, article 10 and any other provision of this article, if a person files a written complaint with the registrar pursuant to section 32-1155 and any party to the complaint disputes the registrar's corrective work order, within thirty calendar days after the corrective work order is made, the complaint, at the sole discretion of the registrar, may be referred to arbitration if the cost of repairs is five thousand dollars or less. If the cost of repairs is more than five thousand dollars, the contesting parties, within thirty calendar days after the corrective work order, may opt into arbitration if all of the parties agree. For the purposes of this subsection, the estimated cost of repairs shall be determined at the time of investigation by the registrar. If either party disputes the cost of the repairs, the party objecting shall submit to the registrar within ten calendar days two separate bids from qualified contractors on the cost of the repairs. Failure to provide two bids within this time will result in the party's waiving their right to object to mandatory arbitration.

B. The registrar shall serve the parties notice whether the matter has been referred to arbitration within ten calendar days after a request for arbitration has been received. If the matter has been referred to arbitration, the notice also shall identify the arbitrator selected by the registrar, who shall be a member in good standing of the construction law section of the state bar of Arizona. Service shall be made by personal service or by mailing a copy of the notice by certified mail to the licensee's latest address of record on file in the registrar's office. If service is made by certified mail, it is effective five calendar days after the notice is mailed.

C. Section 12-3012 applies and the parties have the right to remove an arbitrator at any time on discovery of grounds set forth in section 12-3011, subsection B. If an arbitrator is removed pursuant to this subsection, the registrar shall notify the parties of the new arbitrator selected within seven calendar days. The arbitrator has immunity as prescribed in section 12-3014.

D. The licensee may post a bond in the amount of the estimated cost of repairs within fourteen calendar days after service of the registrar's notice referring the matter to arbitration. The registrar may not suspend or revoke any of the licenses held by a licensee that posts a bond in the amount of the claim subject to arbitration.

E. The arbitration process is governed by section 12-3015.

F. Except as otherwise provided in this section, sections 12-3010, 12-3016 and 12-3017 apply to arbitrations under this section.

G. The arbitration hearing shall be held within sixty calendar days after the registrar's notice referring the matter to arbitration. The arbitrator may extend the deadline to hold the hearing for an additional thirty calendar days on agreement of the parties or for good cause shown.

H. The arbitrator is prohibited from ordering the suspension or revocation of any license, awarding monetary damages, assessing civil penalties or awarding any legal fees or costs in any amount.

I. The arbitrator shall issue a recommended order with findings of fact and conclusions of law including necessary repairs no later than fifteen calendar days after the close of the arbitration hearing. The arbitrator shall serve a copy of the recommended order to each party to the arbitration proceeding as well as the registrar by personal service or by mailing a copy of the recommended order by certified mail to the licensee's latest address of record on file in the registrar's office. If service is made by certified mail, it is effective five calendar days after the notice is mailed. The arbitrator's recommended order shall become an order of the registrar, subject to acceptance, modification or rejection by the registrar, within twenty calendar days from the date of the arbitrator's recommended order. The registrar's order becomes final thirty calendar days after the date of an order by the registrar. The arbitrator or registrar shall not grant requests to rehear the matter. A party waives any objection that a order was not timely made unless the party gives notice of the objection to the registrar before receiving notice of the order.

J. Notwithstanding any other provision in this chapter, before an order of the registrar becomes final pursuant to subsection I of this section, if a contractor fails to comply with the order:

1. The registrar may order that the cash bond posted pursuant to subsection D of this section be discharged within twenty-five calendar days. The complainant is not eligible for any additional award from the residential contractors' recovery fund pursuant to section 32-1132 and may not seek the same award, claim or remedy through civil court.

2. If a bond is not posted by the licensee pursuant to subsection D of this section, the registrar may suspend or revoke the licensee's license by operation of law and order payment from the recovery fund for claimants who are eligible.

K. Compliance with the order shall be determined by the following:

1. If a complainant fails to notify the registrar within ten calendar days of the order becoming final, the respondent shall be deemed to have complied with the order.

2. If a complainant notifies the registrar of contractors that the respondent has failed to comply with the order, the registrar shall make a final determination of compliance.

L. This section applies to all complaints filed with the registrar on or after the effective date of this section.