32-2123. Application for license as broker or salesperson +7Arizona · Real Estate · English

An original broker or salesperson application must disclose the applicant's address and legal name (plus any advertising nicknames), felony convictions, disbarment/suspension from law practice, prior license refusals/revocations/suspensions in any state, and any licensed entity in which the applicant exercised control.

• ✓Must disclose all felony convictions including nature, location, timing, and disposition
• ✓Must disclose prior license refusals, revocations, or suspensions in this or any other state
• ✓Must disclose any corporation/company/partnership licensed by the department in which the applicant exercised control

An original broker or salesperson application must disclose the applicant's address and legal name (plus any nickname used for advertising), any felony conviction with details, disbarment or law license suspension, any prior license refusals/revocations/suspensions in any state, entities in which the applicant exercised control, and the applicant's social security number (or federal tax ID if none for bona fide reasons).

• ✓Must disclose any felony conviction including nature, place, time, and disposition
• ✓Must disclose any prior license refusal, revocation or suspension in this or any other state
• ✓Natural persons must provide SSN, used to aid location of noncustodial parents and for no other purpose
• ✓May substitute federal tax ID number for SSN only for bona fide religious/other documented reasons

Every original license application must be submitted either in writing and signed by the applicant, or submitted electronically with an appropriate electronic or digital identifier, and must be accompanied by all applicable fees.

• ✓Applications may be written and signed OR electronic with digital identifier
• ✓All applicable fees must accompany the application

A natural person applicant must provide a social security number. If the applicant lacks one due to bona fide religious convictions or other documented reasons, a federal tax identification number may be provided. The SSN/FTIN is used only to aid in locating noncustodial parents or their assets.

• ✓Natural persons must provide SSN unless bona fide documented reason exists
• ✓SSN/FTIN used solely to aid the department of economic security in locating noncustodial parents

A broker application must additionally set forth the business name and the applicant's address of record. The commissioner may require reasonably necessary information including prior criminal records, a valid fingerprint clearance card under section 41-1758.03, and an affidavit regarding land development company bankruptcy involvement.

• ✓Broker applications must state the business name and address of record
• ✓Commissioner may require a valid fingerprint clearance card under section 41-1758.03

Every application for an original license must be submitted either in writing and signed, or electronically with an electronic/digital identifier the commissioner deems appropriate. All applicable fees must accompany the application.

• ✓Original application must be signed in writing or submitted electronically with a digital identifier
• ✓Application must be accompanied by all applicable fees

A broker license application must additionally set forth the name under which business is to be conducted and the applicant's address of record.

• ✓Broker application must state the business name
• ✓Broker application must state the applicant's address of record

The commissioner may require additional reasonably necessary information including prior criminal records, a valid fingerprint clearance card under 41-1758.03, and an affidavit regarding participation in land development companies subject to federal bankruptcy petitions.

• ✓May require a valid fingerprint clearance card issued pursuant to section 41-1758.03
• ✓May require affidavit regarding interest in a land development company in bankruptcy

The reservation deposit for a single lot or parcel cannot exceed $5,000. Within one business day after acceptance, the deposit must be delivered to a licensed escrow agent and deposited in a federally insured depository. Deposits remain in escrow until cancellation, termination, or execution of a purchase contract.

• ✓Reservation deposit shall not exceed $5,000 per lot/parcel
• ✓Deposit must reach a licensed escrow agent within one business day of acceptance
• ✓Deposits must remain in escrow until cancellation, termination, or purchase contract execution
• ✓Escrow account may be interest bearing at direction of either party

Within fifteen calendar days of receiving the public report, the seller must provide the buyer a copy of the public report and proposed purchase contract. The parties then have seven business days after buyer's receipt to enter into a purchase contract, or the reservation automatically terminates.

• ✓Seller must deliver public report and proposed contract within 15 calendar days of receipt
• ✓Parties have 7 business days after buyer receipt to enter a purchase contract
• ✓Reservation automatically terminates if no contract within 7 business days
• ✓Seller has no cancellation rights other than as provided in this paragraph

Before accepting any lot reservation, the prospective seller must mail or deliver written notice of intention to accept lot reservations to the department. The notice must include seller's contact info, any real estate broker retained, the project name and location, and the form to be used for accepting reservations subject to commissioner approval.

• ✓Written notice to department is required before accepting any lot reservation
• ✓Notice must include seller contact info, broker info, project name/location, and reservation form
• ✓Authority to take lot reservations expires two years after commissioner receives notice of intent
• ✓Commissioner may deny authorization to any person who has violated the chapter

A prospective buyer may cancel a lot reservation at any time before execution of a purchase contract by delivering written notice of termination. Within five business days after termination for any reason, seller must refund all deposits plus interest earned, less agreed account fees.

• ✓Buyer may cancel anytime before purchase contract execution via written notice
• ✓Refund of all deposits plus interest (less fees) required within 5 business days of termination
• ✓Escrow agent shall refund the buyer if the seller is not available
• ✓Buyer may not transfer reservation rights without seller's prior written consent

All notices must be in writing and hand delivered or sent by certified mail, return receipt requested. Mailed notices are deemed delivered upon the earlier of actual receipt or seven calendar days after mailing. Each reservation form must contain a statement that the department has not inspected/approved the project and no offer may be made before a public report is issued.

• ✓Notices must be written, hand delivered or certified mail return receipt requested
• ✓Mailed notices deemed delivered earlier of actual receipt or 7 calendar days after mailing
• ✓Reservation form must state no public report has been issued and no offers may be accepted

The notice of intention for unsubdivided land must include truthful statements about other subdivisions in which owners/agents were involved within five years, military airport proximity disclosures, and any other information the commissioner requires to protect the public.

• ✓Must identify all other subdivisions in which the ownership holder, agent, or any principal/officer has been directly or indirectly involved within the last five years
• ✓Must disclose whether land is in the vicinity of a military airport, public airport, or in a high noise/accident potential zone as defined in sections 28-8461 and 28-8486
• ✓Copies of original promotional and advertising material must be attached to the notice

Owners and agents cannot make offerings of unsubdivided land without written authorization from the commissioner. The commissioner issues a public report that must be furnished to each offeree at time of offering.

• ✓It is unlawful to make offerings without written authorization of the commissioner
• ✓A copy of the public report must be furnished to each offeree at the time of the offering
• ✓The commissioner may terminate any authorization under section 32-2183

Unsubdivided land offerings require permanent access provisions over terrain suitable for conventional motor vehicles unless waived, with proof furnished by a licensed engineer or surveyor. Water availability reports from the director of water resources must be displayed.

• ✓Provision must be made for permanent access over terrain on which roads could be established for conventional motor vehicles unless waived by commissioner
• ✓Access proof must be furnished in a report by a licensed engineer or land surveyor of this state
• ✓All promotional material and contracts must display the water availability report, a summary, or a statement that availability is unknown if no report has been prepared

Real estate contracts, conveyances, leases, or covenants for unsubdivided land cannot contain provisions limiting a party's right to appear or testify regarding zoning changes, building permits, or official acts. Conflicting provisions are contrary to public policy.

• ✓No instrument may limit the right of any party to appear or testify in support of or opposition to zoning changes, building permits, or official acts
• ✓Contractual provisions conflicting with this rule are declared contrary to public policy
• ✓Private restrictions on the use of real property are not prohibited

When earnest money, down payments, or other advanced money is paid directly to the seller instead of a neutral escrow, this fact must be conspicuously disclosed in large/bold print in the public report, purchase contract, and agreement of sale. The purchaser must sign or initial adjacent to the disclosure.

• ✓Disclosure must be conspicuous and in large or bold print
• ✓Purchaser must sign or initial the provision indicating approval
• ✓Disclosure must appear in public report, purchase contract, and agreement of sale
• ✓Required warning states buyer assumes risk of losing money if seller cannot or will not perform

Every contract must indicate where the earnest money or down payment will be deposited, identifying the title company, broker's trust account, or other depository. This ensures purchasers know where their advanced money is held.

• ✓The contract shall indicate where earnest money or down payment will be deposited
• ✓Must include the name of the title company, broker's trust account, or other depository

Licensees must keep escrow/trust accounts and records of monies deposited relating to real estate transactions. Commingling the principal's or client's monies or property with the licensee's own, or converting those monies to the licensee or another, is prohibited.

• ✓Must keep escrow/trust account and records of deposited monies
• ✓Commingling client/principal funds with licensee's own funds is prohibited
• ✓Converting client monies/property is a disciplinary violation

Violating federal fair housing law, the Arizona civil rights law, or any similar local ordinance is grounds for discipline.

• ✓Violation of federal fair housing law is a disciplinary ground
• ✓Violation of Arizona civil rights law or similar local ordinance is a violation

A licensed broker must exercise reasonable supervision over salespersons, associate brokers, and others under the broker's employ, and reasonable supervision and control over entities for which the broker serves as designated broker under section 32-2125. Licensed schools must similarly supervise owners, directors, administrators, and instructors.

• ✓Designated broker must reasonably supervise all salespersons and associate brokers
• ✓Broker must supervise activities of corporations, LLCs, and partnerships as designated broker
• ✓Licensed schools must supervise their staff and instructors

Under subsection B, the commissioner may suspend, revoke, deny issuance, issue a letter of concern, issue a provisional license, or deny renewal if the holder/applicant procured a license by fraud, was convicted of a felony or crime of moral turpitude, made substantial misrepresentations or false promises, engaged in fraud or dishonest dealings, acted without a license, demonstrated incompetence, or failed to respond during an investigation.

• ✓Procuring a license by fraud, misrepresentation or deceit is grounds for discipline
• ✓Felony conviction or crime of moral turpitude is grounds for discipline
• ✓Incompetence means lack of basic knowledge/skill or failure to appreciate consequences of action/inaction
• ✓Failure to respond during investigation or audit by providing documents/statements is a violation

A licensee may not place a for-sale or for-rent sign on any property without the written authority of the owner or the owner's authorized agent. This is a disciplinary ground under section 32-2153.

• ✓Written authority of owner or authorized agent required before placing any sale/rent sign
• ✓Violation is grounds for license discipline

A licensee must maintain a complete record of each transaction and cannot fail or refuse on demand to produce documents, contracts, books, records, or reports for inspection by the commissioner or the commissioner's representative.

• ✓Must maintain complete record of each transaction under the chapter
• ✓Must produce records on demand for commissioner inspection
• ✓Refusal to produce required records is a violation

Tendering a wood infestation report in connection with a residential transfer knowing wood infestation exists, that the report is inaccurate or false, or that no inspection was done, is a disciplinary violation.

• ✓Cannot tender a wood infestation report known to be inaccurate or false
• ✓Cannot tender report knowing infestation exists or that no inspection was done

Grounds for discipline include negligence in performing a licensed act, selling/leasing property not as represented, signing another's name without express written consent, and violating any commissioner's order.

• ✓Negligence in performing a licensed act is a disciplinary ground
• ✓Cannot sign another person's name without express written consent
• ✓Cannot sell/lease property that differs from what was represented to buyer/lessee

The commissioner may deny, suspend, or revoke a license for a corporation, LLC, or partnership if an owner, officer, director, member, manager, partner, 10%-or-more stockholder, or controlling person is a current or former licensee whose license was denied, suspended, or revoked.

• ✓10% or more stockholder with disciplined license can trigger entity denial
• ✓Controlling persons with revoked/suspended licenses affect entity licensing

Lapsing, suspension, or voluntary surrender of a license does not deprive the commissioner of jurisdiction to proceed with investigations, render decisions, or assess civil penalties under 32-2160.01.

• ✓Commissioner retains jurisdiction after license lapses, is suspended, or is surrendered
• ✓Commissioner may still investigate, discipline, and assess civil penalties

A 'letter of concern' is an advisory letter noting that conduct does not warrant discipline but the licensee should modify practices. A 'provisional license' allows practice subject to a consent order or the commissioner's terms, conditions, and restrictions.

• ✓Letter of concern is advisory and not formal discipline
• ✓Provisional license allows practice subject to consent order or commissioner conditions

Reservation deposits are capped and must be placed in escrow with a licensed escrow agent within a short window, held in an insured depository until termination or execution of a purchase contract.

• ✓Reservation deposit for a single lot or parcel shall not exceed $5,000
• ✓Within one business day after acceptance, the deposit must be delivered to a licensed escrow agent (title 6, chapter 7) and deposited in a federally insured depository
• ✓All reservation deposits must remain in escrow until cancellation/termination or execution of a purchase contract
• ✓Escrow account may be interest bearing at direction of either party; account fees/interest are as agreed between buyer and seller

After the seller receives the public report, they must provide it and the proposed purchase contract to the buyer within a set time; the parties then have a limited window to enter a contract or the reservation terminates automatically.

• ✓Within 15 calendar days of receiving the public report, seller must give buyer a copy of the public report and the proposed purchase contract
• ✓Parties have seven business days after buyer's receipt to enter into a purchase contract
• ✓If no contract within the seven business day period, the reservation automatically terminates
• ✓Seller has no cancellation rights other than as provided in this paragraph

A prospective buyer may cancel at any time before execution of a purchase contract, and deposits must be refunded quickly after any termination.

• ✓Buyer may cancel a lot reservation at any time before execution of a purchase contract by written notice to the seller
• ✓Within five business days after termination for any reason, seller must refund all deposits plus interest earned, less agreed account fees
• ✓If the seller is not available, the escrow agent must make the refund
• ✓After refund, neither party has further obligation arising out of the reservation

Before accepting any lot reservation, the prospective seller must mail or deliver written notice to the department of intent to accept lot reservations, including specific required information about the seller, broker, project and reservation form.

• ✓Written notice must be given to the department before accepting any lot reservation
• ✓Notice must include seller's name/address/phone, any broker's info, project name/location, and the reservation form (subject to commissioner approval)
• ✓Authority to take lot reservations expires two years after the commissioner receives the notice of intent

Buyers cannot transfer reservation rights without written consent, and denied public report applications trigger buyer notification and deposit return.

• ✓Buyer may not transfer reservation rights without prior written consent of seller; unauthorized transfers are voidable at seller's discretion
• ✓If the department denies the public report application, seller must notify each buyer in writing within five business days and return deposits
• ✓The commissioner may deny authorization to accept lot reservations to any person who has violated this chapter

All notices must be in writing and delivered by specified methods, and each reservation form must contain a mandatory disclosure statement.

• ✓Notices must be in writing and hand delivered or sent by certified mail, return receipt requested, postage prepaid
• ✓Mailed notices are deemed delivered on the earlier of actual receipt or seven calendar days after deposit in the mail
• ✓Each lot reservation form must state the department has not inspected/approved the project and no offer to sell/purchase may occur before a public report is issued

If the commissioner pays any amount from the recovery fund toward a judgment against a broker, designated broker, or salesperson, that license is automatically terminated upon issuance of the payment order. No new license is issued until full repayment plus interest and evidence the judgment is fully satisfied.

• ✓License automatically terminated when payment order is issued
• ✓Licensee must repay in full plus interest at the rate in section 44-1201
• ✓Licensee must show the judgment has been fully satisfied before a new license
• ✓Applies to brokers, designated brokers for corporations, and salespersons

The commissioner may, at sole discretion, waive certain claim requirements under subsection E paragraph 8 or subsection F if the claim is based on a criminal restitution order, or if the claimant has taken all reasonable steps to collect from all judgment debtors but was unable to collect.

• ✓Waiver applies when claim is based on a criminal restitution order
• ✓Waiver applies when claimant took all reasonable collection steps but could not collect
• ✓Waiver is at the commissioner's sole discretion

If total remaining fund liability is insufficient to pay all valid claims against one licensee, the commissioner may petition the court to initiate a proration proceeding. The court distributes remaining funds among claimants in the ratio their claims bear to the aggregate, without regard to priority of judgment or filing order.

• ✓Distribution is proportional to each claim's ratio of the aggregate valid claims
• ✓Distribution ignores order in which judgments obtained or applications filed
• ✓Claims not filed within 90 days after the proration order are excluded
• ✓Fund liability is based on limits in effect on the date the last application for payment is filed

If money in the fund is insufficient to satisfy a duly authorized claim, the commissioner must satisfy unpaid claims when sufficient money is deposited, in the order originally filed, plus accumulated interest at 4% per year.

• ✓Unpaid claims are paid in the order originally filed
• ✓Accumulated interest is 4% per year on unpaid claims
• ✓Payment resumes when sufficient money is deposited in the fund

For the purposes of this section, 'complaint' means the facts of the transaction on which the judgment is based.

• ✓'Complaint' = facts of the transaction on which the judgment is based

No owner or agent may make offerings of unsubdivided lands without written authorization from the commissioner. The commissioner issues a public report and requires a copy be furnished to each offeree at the time of offering.

• ✓It is unlawful to make offerings without written authorization of the commissioner
• ✓A copy of the public report must be furnished to each offeree at the time of the offering
• ✓The commissioner may terminate any authorization per section 32-2183

The notice of intention for unsubdivided lands must include true statements about related subdivisions, military/airport proximity, and any other information the commissioner reasonably requires for public protection. A five-acre lot size triggers an exemption from certain requirements.

• ✓Must identify all other subdivisions in which the ownership holder, agent, or any principal/officer has been directly or indirectly involved within the last five years
• ✓Must state whether any portion is located near a military airport, ancillary military facility, or public airport, or in a high noise or accident potential zone
• ✓Copies of original promotional and advertising material must be attached to the notice

It is unlawful to offer unsubdivided lands without provisions for permanent access over terrain suitable for roads for conventional motor vehicles, unless waived by the commissioner. Proof of access must be provided by a licensed engineer or land surveyor.

• ✓Provisions for permanent access must be made unless waived by the commissioner
• ✓Proof of access must be furnished in a report by a licensed engineer or land surveyor of the state

If the director of water resources issued a water availability report, all promotional material and contracts must adequately display the report or an approved summary. If no report exists and water availability is unknown, that fact must be disclosed.

• ✓Promotional material and contracts must display the water availability report or an approved summary
• ✓If no report has been prepared, materials must state that availability of water is unknown

No real estate sales contract, conveyance, lease, or other instrument transferring interest in unsubdivided land may contain provisions limiting a party's right to appear or testify for or against zoning changes or building permits. Such provisions are contrary to public policy.

• ✓Provisions limiting the right to testify on zoning changes or building permits are void as contrary to public policy
• ✓This restriction does not prohibit private restrictions on the use of real property