A Guide to Arizona’s Statute of Repose for Commercial Construction

Arizona’s statute of repose limits how long claimants may pursue legal action against those involved in a commercial construction dispute. Under A.R.S. § 12-552, all contractors, architects, engineers, and other professionals receive protection from indefinite exposure to defect claims by placing a deadline on when such claims may be filed.

Determine what the law covers, how the time limit is measured, and which conditions may extend or restrict that window.

What Is a Statute of Repose?

Under Arizona state law, a statute of repose limits the period during which legal action may be brought, regardless of when an alleged defect becomes known. In the context of construction, it restricts how long builders, architects, engineers, and other construction professionals are held liable after completing their work. Once the deadline expires, courts will reject claims, even if a defect appears later.

What Is the Difference Between a Statute of Repose and Limitation?

The court of law starts the statute of limitations when a claimant discovers a defect or should have realized it through reasonable diligence. Courts may extend or pause that period in some cases. For instance, if a contractor purposely hides a defect or fails to disclose it despite knowing the risk (fraudulent concealment), courts may pause the statute of limitations until the claimant finds the defect.

A statute of repose applies regardless of discovery and bars claims once the deadline passes. For commercial construction in Arizona, that time frame is outlined in A.R.S. § 12-552.

The Statute Itself: What Is the A.R.S. § 12-552?

Arizona Revised Statutes § 12-552 governs the statute of repose for claims specifically related to commercial construction projects. The statute imposes a fixed period during which claimants must file actions based on construction defects. After the deadline expires, courts will not hear claims.

Eight-Year Limitation Period

Under A.R.S. § 12-552(A), a person must bring a claim for defects in the “design, specifications, surveying, planning, supervision, testing, construction or observation” of a commercial improvement within eight years after substantial completion of the project. The statute applies to claims involving developers, builders, engineers, architects, and all others who contribute to the construction process.

Nine-Year Exception for Late Discovery

If a claimant discovers a defect during the eighth year after substantial completion, the statute allows one additional year to file the claim. This extension applies only when discovery takes place in the eighth year and does not extend the period beyond the ninth year after completion. The law does not allow any further extension based on discovery that occurs after the eight-year period ends.

Definition of Substantial Completion

The statute defines “substantial completion” as the earliest of the following:

• The date when the owner first uses the improvement for its intended purpose.
• The date when the owner accepts the work in writing.
• The date when a government agency issues a certificate of occupancy.

The deadline for filing a claim begins on whichever of these three dates occurs first.

Covered Parties

A.R.S. § 12-552 applies to commercial property, including office buildings, retail centers, industrial facilities, and similar structures. Courts have interpreted this coverage to include general contractors, subcontractors, architects, engineers, and other professionals who materially contribute to the structure’s completion. The statute does not apply to residential construction, which falls under a different legal framework.

Triggering Events and Timeline Calculation

Correctly identifying when the statute of repose begins is necessary when evaluating the viability of a construction defect claim. A.R.S. § 12-552 starts the clock based on the concept of substantial completion, which the statute defines with unequivocal benchmarks. Missing the applicable date, or using an incorrect one, can lead to the dismissal of a claim on procedural grounds.

Determining the Start Date

A.R.S. § 12-552 begins the filing period at the earliest applicable date described earlier under “Definition of Substantial Completion.” In practice, construction contracts, inspection records, or municipal approvals mention these dates. Contractors and developers should maintain detailed documentation for all three benchmarks to avoid disputes over timing. Property owners should also retain completion records, particularly when ownership changes, or multiple contractors participate in the project.

Special Considerations in Complex Projects

It’s common for construction projects to have multiple phases, separate structures, or staggered handovers. In such cases, courts may examine each portion independently and assign a separate completion date to each. For instance, if a contractor completes one building in a multi-building project and turns it over for use, the statute of repose for that structure begins at that point, regardless of whether construction continues on adjacent buildings.

Similarly, contractors who return to a site after initial completion to perform warranty work, minor repairs, or unrelated services do not restart the statute of repose. Courts generally use the original completion date as the fixed point for measuring the statute of repose, even if additional work occurs later.

Contractual Modifications and Legal Exceptions

Most commercial construction contracts include provisions that address defect claims, liability periods, and procedural requirements. While A.R.S. § 12-552 imposes a statutory limit, contracts may attempt to modify that period or introduce additional restrictions. Courts assess the enforceability of these terms based on the language of the agreement and the statute.

1. Contractual Shortening of the Repose Period

Some contracts attempt to reduce the time available to file a claim. For example, a contract might state that all claims must be brought within six years of project completion. Arizona courts generally allow this type of provision if both parties negotiated it with full understanding and if the clause does not conflict with public policy. Arizona courts generally uphold reasonable contractual reductions of the repose period but will not enforce any provision that seeks to extend it beyond the statutory limit.

2. Indemnity, Arbitration, and Notice Provisions

Contract terms typically include indemnity clauses, mandatory arbitration requirements, or notice procedures for defect-related disputes. These terms may affect how and when a party can assert a claim, even if the filing falls within the period allowed by A.R.S. § 12-552. A claimant who ignores a valid contractual requirement, such as a notice deadline or arbitration process, may lose the right to proceed in court. Courts enforce these procedural conditions if the contract language leaves no ambiguity.

3. Exceptions Based on Fraud or Concealment

A.R.S. § 12-552(B) includes a narrow exception when a claimant discovers a defect or if injury occurred during the eighth year following substantial completion. In that case, the statute allows one additional year to file. The law does not recognize other exceptions based on delayed discovery. However, if a contractor knowingly conceals a defect, courts may apply separate legal doctrines to toll the statute of limitations for fraud-based claims. These doctrines, however, do not extend or suspend the statute of repose, which remains a strict, fixed deadline.

Benefits of the Repose Deadline

The statute of repose under A.R.S. § 12-552 is a risk-management measure for contractors, architects, engineers, and other construction professionals. It allows parties to assess long-term exposure and close out potential liability within a defined period.

Without a statutory deadline, professionals would remain indefinitely vulnerable to claims arising from aging structures or changing standards. The eight-year limit, with a possible extension to nine years under specific conditions, sets a limit for evaluating risk, pricing services, and maintaining insurance coverage. Once the period ends, parties can operate with the assurance that the law will bar future defect claims related to completed work.

Protect Yourself Under A.R.S. § 12-552 and Avoid Procedural Missteps

If you need to confirm whether your claim falls within the allowable window or want to protect your position before a dispute escalates, contact FR Law Group. We handle construction cases across Arizona and advise clients on how to act within the constraints of A.R.S. § 12-552, before timing puts the case at risk.

For questions and concerns, our article, First Meeting with a Construction Lawyer: Questions and Topics to Cover, can help you prepare for your appointment.