Absurd Regulation

I found out today, the hard way, that Arizona has a law specifying exactly how a pool contract is to be paid for a pool construction or renovation job.  Yes, we sure would not want to leave it to individual choice and negotiation to determine contract terms.  The craziest part is that I am required, by law, to pay 100% of the cost of the job to the pool contractor before the gunite or finish coat of the pool is shot.  In other words, I must pay all of the contracted price before the job is complete with no hold back.

This is absolutely crazy.  I have never in my life not had a hold-back in a construction contract.  Three times  (all with my company) I have had contractors go bankrupt or disappear before the job is complete, in at least two cases leaving so much work unfinished that even the hold-back was not enough to cover the loss.   Typically, contractors bolt before the punch list is complete, and only the hold-back keeps them focused at all on finishing the job to my satisfaction.  I am not happy, particularly since Phoenix pool contractors are going bankrupt right and left in this economy.

This is yet another example where "regulation" in fact means "in the tank for favored industries that make campaign contributions."


  1. John Moore:

    Are you sure about that?

    I had my pool redone last year and didn't have to pay all up front. I live in PV, AZ.

  2. Dave Reid:

    You are the master of your contract. Rather than contract with a pool company to perform a complete pool installation, you should contract with them to perform a series of tasks. Contract 1 is to dig the hole only for x amount of dollars. Then sign another contract in which they form the rebar frame for x amount of dollars. Then another contract to spray the gunite. etc etc etc. Payment may have to be made at each segment but you will be protected from any serious monetary harm.

  3. Mesa Econoguy:

    Good thing you don’t work in the financial markets.

    Wait till Bawney Fwank gets his wishes to we-weguwate that industwy…

  4. dreamin:

    Why not just demand that they post a performance bond?

  5. EvilRedScandi:

    Don't worry - I'm sure if you make enough noise and grease the right palms you can get a government bailout if your contractor can't complete the work...

  6. Chris Byrne:

    That rule was "intended" for commercial contracts, because a large number of developers were stiffing pool contractors.

    The law of unintended consequences applies as always of course.

  7. DJB:

    It seems like an escrow would be the logical answer for this type of issue. I know it adds another middleman but it would give both parties some security. Why isn't this the preferred method?

  8. Tom Moses:

    Absurb yes, but there is another side. Once the gunite is sprayed on, you it is now your property whether you pay or not. Pool contractors can easily go out of business by not getting payed when the job is done esp by unscrupious (esp rich) people who will always find something wrong to avoid paying the final draft. A better way would be to escrow the money and have a qualified buiding inspector authorize the final payment when the pool is finished to spec..

  9. mahtso:

    I think you are mistaken and there is no regulation with such a requirement (but if I am wrong please post the number of that regulation). ARS 32-1158.01 does set out requirements for a pool contract, but that does not require that the contractor get the money up-front but does allow a contractor to charge for construction in stages (up to 30% when the hole is dug; 30% when the shotcrete and plumbing are in; and 30% when the deck is in). All the statutes and rules can be found at azroc.gov.