Attorney General Kris Mayes warned Arizonans on Apr. 14 about an increase in construction fraud schemes that target homeowners seeking to build Accessory Dwelling Units (ADUs), also known as casitas, guest houses, or backyard rental units.
The warning comes after families reported losing tens of thousands of dollars—sometimes up to $250,000—to companies that took large upfront payments but failed to secure permits or begin work. The Attorney General’s Office outlined a pattern in which fraudulent contractors make impressive promises, collect deposits quickly, and then stall without ever starting the project. These contractors may use another company’s license and stop responding once victims seek refunds.
Homeowners are advised to be cautious when hiring for ADU projects. Warning signs include out-of-state companies claiming local ties, requests for large upfront payments by unconventional methods such as cryptocurrency or gift cards, pressure tactics to sign contracts quickly, vague assurances about permits being processed without documentation, and mismatched business addresses. The Attorney General’s Office recommends verifying contractor licenses with the Arizona Registrar of Contractors and getting multiple written estimates before agreeing to any contract.
Residents are also encouraged not to pay the full amount upfront and to use credit cards when possible for added protection against fraud. Homeowners should research companies online using terms like “complaint” or “scam,” check with the Better Business Bureau, and be especially careful if considering using home equity for financing these projects.
The Arizona Attorney General’s Office serves as the state’s chief legal office with responsibilities that include addressing elder abuse, civil rights violations, cold cases through its dedicated unit, advocacy on fair housing issues, accountability measures for social media companies, and participation in federal lawsuits according to the official website. Kris Mayes is Arizona’s 27th attorney general and is noted as the first mother to hold this position according to the official website.
Anyone who suspects they have been targeted by such scams is urged to file complaints with the Arizona Registrar of Contractors at roc.az.gov/file-complaint or call (602) 542-1525; report incidents via BBB Scam Tracker at bbb.org/scamtracker; or contact the Arizona Attorney General’s Office directly at azag.gov/consumer.
