Arizona AG warns of new scam targeting homeowners seeking to build backyard casitas

PHOENIX (AZFamily) — Arizona’s attorney general is sounding the alarm about a new scam targeting homeowners seeking to build smaller homes in their backyards.

Arizona Attorney General Kris Mayes says there has been a growing pattern of construction fraud focusing on residents that want to build Accessory Dwelling Units (ADUs), otherwise known as casitas, guest houses, in-law suites or backyard rental units.

The attorney general’s office reports that construction companies collected large upfront payments but didn’t obtain proper permits or even break ground on the projects. First, scammers present proposals or offer personalized consultations for the projects. Once the money is sent, fraudsters will cash the check immediately, and then stall. Victims reported that large deposits were cashed within days of signing, and the scammers promised that construction will “start soon.”

However, once homeowners contacted city offices seeking information about the permits, they discovered that no plans were ever submitted, and no permits were requested. The attorney general’s office says in some cases, scammers used another contractor’s license to seem legitimate.

Families reported losing tens of thousands of dollars, including up to $250,000.

Mayes is advising homeowners to watch out for red flags before signing any ADU construction contracts. Warning signs to look out for include:

• Company is based out-of-state, but claims to operate locally
• Requesting large upfront payments, especially by check, cash, Zelle, crypto or gift cards
• Pressuring homeowners into signing quickly or discouraging them from getting other quotes
• Claiming permits are “already in process” but are unable to show documentation
• Business address doesn’t match to a local office
• Appeal heavily to personal trust, shared faith or community ties in order to gain trust

The attorney general’s office recommends homeowners should verify that the contractor holds an active, valid license with no unresolved complaints at roc.az.gov or by calling 1-877-692-9762. Residents should also get multiples written estimates, including a detailed copy of work, materials, timeline and total price, and never pay the full amount upfront.

Do your homework as well; search the company’s name, followed by words like “scam,” “complaint,” and “review.” Homeowners should also check the Better Business Bureau and the Arizona Registrar of Contractors complaint database.

Once residents are ready to purchase, they should review the contractor’s name, information, license number and contract agreement.

If you believe you may have been a victim to a similar scam, file a complaint with the Arizona Registrar of Contractors at roc.az.gov/file-complaint or call (602) 542-1525.

Also, file a complaint with the attorney general’s office at azag.gov/consumer or contact the office at (602) 542-5763 in Phoenix, (520) 628-6648 in Tucson, or (800) 352-8431 statewide and a complaint form can be sent to you. Lastly, report the fraud to the BBB Scam Tracker at bbb.org/scamtracker.

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