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City of Tucson Construction Fairness
Ordinance
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Purpose
The purpose of the CFO is to assist contractors, subcontractors and
suppliers in collecting on accounts where payments should not have been
delayed. The CFO does not apply to good faith disputes over the work
performed and timing of payment. Instead, it is to punish bad faith
failures to pay for work or materials when there are no legitimate
defenses to payment.
Processing the Claim
1. Owner, general contractor or subcontractor fails to pay for labor or
materials within 14 days of completion of work (or as provided by
contract) and after delivery of an initial written request for payment.
The initial written request must be accompanied by an affidavit of service
or return receipt of certified mail.
- this means that when the work is complete or the materials have been
delivered and payment is due, an initial written request for payment must
be made on the owner, general contractor or subcontractor with proof of
delivery.
2. Two weeks after the initial written request, two additional written
requests must be delivered (at least two weeks apart). The additional
written requests do not have to be served or sent by certified mail.
3. After two weeks have passed since the third written request for
payment, application can be made to the City of Tucson for prosecution of
the claim under the CFO.
4. The claimant will need to testify that payment in full has not been
made and that there is no reasonable basis to delay payment.
5. A hearing before the Construction Special Magistrate will be held not
more than 60 days after the complaint has been answered.
Defenses to the Claim
1. If a valid pay-when-paid clause exists in a contract, the City of
Tucson will not file a complaint if the defense of non-payment has been
raised by the owner, general or subcontractor.
- however, this defense may not be valid unless the party asserting
non-payment files a lawsuit, makes a demand for arbitration or asserts a
claim under the CFO against the non-paying party (unless these acts would
be futile).
2. The existence of a legal or equitable dispute over the work completed,
labor performed or materials provided is a defense to non-payment.
3. Non-payment based on poor quality of work can be raised but only if a
written complaint has been filed with the Registrar of Contractors or
appropriate agency.
Time limits
1. A complaint with the City of Tucson must be filed within one year after
the violation accrues, which is the date of delivery of the last request
for payment.
2. The CFO only applies to contracts entered into after January 9, 1999.
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