Title 44, Chapter 10 - Competition and Competitive Practices (44-1522) +16Arizona · Real Estate · English

The act, use, or employment of any deception, deceptive or unfair act, fraud, false pretense, false promise, misrepresentation, or concealment/suppression/omission of material fact with intent that others rely, in connection with the sale or advertisement of merchandise, is an unlawful practice — whether or not anyone was actually misled, deceived, or damaged.

• ✓Deception, misrepresentation, or omission of material fact with intent to be relied upon is an unlawful practice
• ✓Liability applies whether or not any person was actually misled, deceived, or damaged

In construing the unlawful practices provision, courts may use as a guide interpretations given by the Federal Trade Commission and federal courts to 15 U.S.C. sections 45, 52, and 55(a)(1). Violations of certain other title 44 articles are also declared unlawful practices subject to enforcement.

• ✓Courts may use FTC and federal court interpretations of 15 U.S.C. 45, 52, 55(a)(1) as a guide
• ✓Violations of chapter 9 article 16 or chapter 19 article 1 are also unlawful practices

Section 32-2181 requires notice to the commissioner of intention to subdivide lands, prohibits unlawful acting in concert, and addresses exceptions and deed restrictions. This is the foundation of subdivision regulation.

• ✓A subdivider must file a notice of intention with the commissioner before offering lots for sale
• ✓Acting in concert to evade subdivision laws is unlawful
• ✓Certain subdivisions may be exempt under 32-2181.01 and 32-2181.02

Section 32-2183 governs subdivision public reports, denial of issuance, unlawful sales, voidable sale or lease, orders prohibiting sale, investigations, hearings, and summary orders. The public report must be issued before lots may be sold.

• ✓A public report must be issued by the commissioner before lots may be sold or leased
• ✓A copy of the public report must be given to the buyer before sale
• ✓Sales made without a required public report may be voidable by the buyer

Section 32-2183.01 regulates advertising material contents, authorizes orders prohibiting misleading use, addresses costs of investigation, and drawings or contests.

• ✓Subdivision advertising must not be false or misleading
• ✓The commissioner may order the cessation of improper advertising
• ✓Drawings and contests used in promotion are regulated

Sections 32-2183.05 and 32-2183.06 require military training route, military electronics range, and restricted air space disclosures for residential property in subdivisions.

• ✓Residential subdivision buyers must receive military training route and electronics range disclosures
• ✓Restricted air space disclosures are required for affected residential property

Sections 32-2185 through 32-2185.02 require delivery of clear title on performance of contract, set conditions precedent for sale of unimproved lots or parcels, and require permanent access to subdivided land with rescindable sales.

• ✓A vendor must deliver clear title upon the vendee's performance (32-2185)
• ✓Sale of unimproved lots requires satisfaction of conditions precedent (32-2185.01)
• ✓Lack of permanent access makes a sale rescindable (32-2185.02)

Sections 32-2183.03 and 32-2183.04 cover civil liabilities and surety bond requirements (form, cancellation, effective date, certificate of deposit) for subdividers.

• ✓Subdividers may face civil liability for violations (32-2183.03)
• ✓A surety bond or certificate of deposit may be required (32-2183.04)

Sections 32-2185.06 through 32-2185.09 cover contract disclosures and disclaimers, jurisdiction, recordable forms of contracts, and civil penalties with limitations.

• ✓Subdivision contracts must contain required disclosures and disclaimers (32-2185.06)
• ✓Contracts must be in recordable form where required (32-2185.08)
• ✓Violations are subject to civil penalties (32-2185.09)

Before suspending, revoking, or denying renewal of a license, or prohibiting a sale/lease, the commissioner must present written notice of charges and afford an opportunity for a hearing. The respondent must file a written answer within twenty days after service of the notice of hearing.

• ✓Written notice of charges and hearing opportunity required before most disciplinary actions
• ✓Respondent must file written answer within 20 days after service of notice of hearing

A licensee in a disciplinary proceeding may voluntarily surrender the license if surrender occurs at least ten days before the hearing. After acceptance of a voluntary surrender, the department shall not thereafter issue a license to that licensee.

• ✓Voluntary surrender must occur at least 10 days before hearing
• ✓After accepted surrender, department shall not issue a new license to that person

If public health, safety, or welfare imperatively requires emergency action (with a finding in the order), the commissioner may order summary suspension. Grounds include violations of 32-2153 and termination under 32-2188(I). A summary suspension is final if no hearing request is received within thirty days.

• ✓Summary suspension requires a finding that emergency action is imperatively required
• ✓Summary suspension becomes final if hearing not requested within 30 days

The department may issue a summary suspension when it receives notice that a licensee has been convicted of a felony and is incarcerated, paroled, under community supervision, or on probation for that conviction.

• ✓Felony conviction with incarceration/parole/probation can trigger summary suspension
• ✓This does not limit the commissioner's authority to seek revocation or other discipline

An applicant for a real estate license must either complete the required 90-hour prelicensure education course and pass an examination with at least 75 percent as prescribed in A.R.S. § 32-2124, OR (except for the 27-hour Arizona-specific course) apply for and be granted a waiver of the prelicensure courses. The 27-hour Arizona-specific course cannot be waived.

• ✓Prelicensure course is 90 hours with a passing exam score of at least 75 percent
• ✓The 27-hour Arizona-specific course may never be waived

A waiver based on prior education requires a letter to the Commissioner including the applicant's name/address/phone/signature, license type sought, school name/city/state, course description/curriculum with credit hours, and evidence of course completion (signed letter or official transcript showing start/end dates, semesters/quarters/credit hours, and whether the exam was passed), or evidence from a certified license history.

• ✓Prior-education waiver requires a letter to the Commissioner with detailed course and school information
• ✓Acceptable evidence includes a signed school letter/transcript or a certified license history

A waiver may be granted by meeting A.R.S. § 32-4302 requirements or, if based on experience (or education and experience), the applicant submits a letter with a detailed 10-year resume of duties and employers, an original certified license history (including any discipline) from each state licensed currently and during the preceding 10 years, plus one of: completion of real estate courses, evidence of more than five years' experience in a real estate related field, or evidence of course completion from a certified license history.

• ✓Experience-based waiver requires a 10-year resume and an original certified license history from each state
• ✓Acceptable proof includes over five years' real estate-related experience or completed real estate courses

Applicants must complete the required 90-hour prelicensure education course and pass an examination on the course with a score of at least 75 percent, or obtain a waiver of prelicensure courses except the 27-hour Arizona-specific course. Waivers based on prior education or experience require documented evidence.

• ✓Complete a 90-hour prelicensure course and pass an exam with at least 75 percent
• ✓The 27-hour Arizona-specific course cannot be waived
• ✓Waivers require documented evidence of prior real estate education or more than five years' experience

Any deception, deceptive or unfair act, fraud, false pretense, false promise, misrepresentation, or concealment/suppression/omission of a material fact—made with intent that others rely on it—in connection with the sale or advertisement of merchandise is an unlawful practice, whether or not any person was actually misled, deceived or damaged.

• ✓Deception or concealment of a material fact in a sale/advertisement is unlawful even if no one was actually harmed
• ✓The practice must be done with intent that others rely on the concealment, suppression or omission

Courts construing subsection A may use as a guide interpretations given by the Federal Trade Commission and federal courts to 15 U.S.C. sections 45, 52 and 55(a)(1). Violations of specified chapter 9 and chapter 19 articles are also declared unlawful practices subject to enforcement.

• ✓Courts may use FTC and federal court interpretations of 15 U.S.C. 45, 52 and 55(a)(1) as a guide
• ✓Violations of chapter 9 article 16 or chapter 19 article 1 are declared unlawful practices

A subdivider/agent is liable to buyers when the notice of intention or public report contains untrue statements or material omissions, unless the buyer knew at time of purchase. It is unlawful to employ any device/scheme to defraud, obtain money by material misrepresentation, or engage in fraudulent transactions or courses of business.

• ✓Liability arises from untrue statements/omissions in notice of intention or public report
• ✓No liability if buyer knew of the untruth/omission at time of purchase
• ✓Unlawful to employ any device, scheme, or artifice to defraud

Damages equal the difference between purchase price plus improvement costs and the resale price or current market value, capped at the amount attributable to the misstatement. Prevailing purchaser recovers attorney fees. Actions under subsections A/B must be brought within one year of discovery; subsection C within two years; and never more than three years after sale/lease.

• ✓Actions for untrue statements must be brought within 1 year of discovery
• ✓Fraud actions under subsection C must be brought within 2 years of violation
• ✓No action more than 3 years after the sale or lease
• ✓Recovery capped at purchase price, improvement costs, court costs and attorney fees

Subdividers/agents are liable to purchasers when the notice of intention or public report contains untrue statements or material omissions, unless the buyer knew.

• ✓Liability arises when the notice of intention or public report contains an untrue statement or omits a required material fact
• ✓Liability does not apply if the purchaser knew of the untruth or omission at time of acquisition/purchase
• ✓It is unlawful to defraud, obtain money by material misrepresentation, or engage in any fraudulent transaction/practice in selling or leasing lots

The statute sets a measure and cap for damages, allows attorney fees, and imposes strict limitation periods.

• ✓Damages equal purchase price plus improvement costs minus resale price or current market value, capped by the difference attributable to the untrue statement/omission
• ✓Prevailing purchaser recovers reasonable attorney fees; recovery cannot exceed purchase price plus improvement costs plus costs/fees
• ✓Actions under subsection A or B: within one year of discovery; under subsection C: within two years of violation; in no event more than three years after the sale/lease

Owners/agents are liable to buyers who acquire land during a period when the notice of intention or public report contained untrue statements or omissions of material fact, unless the buyer knew of the untruth.

• ✓Liability arises for untrue statements or material omissions in the notice of intention during the uncorrected period
• ✓Liability arises for selling by means of a public report with untrue statements or omissions
• ✓No liability if the purchaser knew of the untruth or omission at time of acquisition

It is unlawful in selling/leasing unsubdivided land to employ any device/scheme/artifice to defraud, obtain money by material misrepresentation, or engage in any transaction operating as fraud or deceit.

• ✓Cannot employ any device, scheme, or artifice to defraud
• ✓Cannot obtain money or property by material misrepresentation regarding notice/report information
• ✓Cannot engage in transactions operating as fraud or deceit upon a purchaser

Actions under untrue statement provisions must be brought within one year of discovery; fraud actions within two years of violation; and no action may be brought more than three years after the sale/lease.

• ✓Untrue statement/omission actions must be brought within one year after discovery or reasonable diligence discovery
• ✓Fraud actions must be brought within two years after the violation
• ✓No action by a purchaser may be brought more than three years after the sale or lease

An owner/agent violating provisions may be assessed civil penalties up to $1,000 per infraction after a hearing. Commissioner enforcement orders must be recorded with the county recorder.

• ✓Civil penalty is not more than $1,000 per infraction; multiple lots in one infraction count as a single infraction
• ✓A proceeding must commence within five years of actual or reasonably diligent discovery
• ✓Cease and desist orders, injunctions, prohibition orders, or suspensions must be recorded in the book of deeds and affected parties notified within ten business days

A campground cannot be advertised as guaranteeing unimpeded access unless the operator files satisfactory information guaranteeing that purchasers cannot be denied access. No lien or encumbrance may be construed to deny access and use.

• ✓Guaranteed access advertising requires filing satisfactory information with the department
• ✓A recorded nondisturbance agreement, bond, letter of credit, or other financial assurance is required
• ✓Nondisturbance agreements must bind successors and remain effective despite bankruptcy or sale

An operator cannot advertise guaranteed unimpeded use/access unless it files satisfactory information guaranteeing purchasers cannot be denied access. Evidence must include a recorded nondisturbance agreement from each lienholder, a bond/letter of credit covering the indebtedness, or other acceptable financial assurances.

• ✓Must file info guaranteeing purchasers cannot be denied access to use campgrounds
• ✓No lien or encumbrance may be construed to deny access and use
• ✓Nondisturbance agreement must allow enforcement by individual members and survive bankruptcy/sale
• ✓Bond/letter of credit must cover indebtedness remaining under liens

An agency or political subdivision may not issue a license to an individual who does not provide documentation of citizenship or authorized alien status by presenting specified documents.

• ✓Acceptable documents include an Arizona driver license issued after 1996, a birth certificate, U.S. passport, foreign passport with U.S. visa, certificate of naturalization/citizenship, and tribal documents
• ✓If a document does not contain a photograph, the individual must also present a government-issued photo document
• ✓Once citizenship or nonexpiring work authorization is affirmatively established, subsequent documentation is not required at renewal/reinstatement; expired limited work authorization requires new documentation

Agencies must waive the initial license fee for certain individuals applying for a specific license for the first time in the state.

• ✓Fee waivers apply to applicants whose family income does not exceed 200% of federal poverty guidelines, active-duty military service members' spouses, and honorably discharged veterans discharged not more than two years before application
• ✓The department of administration must report the total number of waived licensing fees by each agency to legislative leaders and the governor's budget office by March 1 each year

Before receiving payment, a claimant must execute an assignment of judgment lien and notice of subrogation. Once paid, the commissioner is subrogated to all judgment creditor rights, and the claimant cannot file a satisfaction of judgment without the commissioner's prior written consent. The attorney general brings collection actions.

• ✓Claimant must execute assignment of judgment lien before payment
• ✓Commissioner is subrogated to all rights of the judgment creditor after payment
• ✓Claimant cannot file satisfaction of judgment without commissioner's written consent
• ✓A certified commissioner's order may be filed and enforced as a superior court judgment with no filing fee

Failure to comply with all provisions of the article waives any rights under it. The recovery fund article does not limit the commissioner's authority to take disciplinary action, and full repayment to the fund does not nullify other disciplinary proceedings.

• ✓Failure to comply with all article provisions waives all rights
• ✓Fund article does not limit disciplinary authority against a licensee
• ✓Full repayment to the fund does not nullify other disciplinary proceedings

Sums received are deposited in the real estate recovery fund and held in trust. The state treasurer invests fund monies with earnings credited to the fund. The commissioner may spend up to $50,000 in interest monies per fiscal year to increase public awareness of the fund.

• ✓Fund monies are held in trust for the purposes of the article
• ✓Investment earnings are credited to the fund
• ✓Public awareness spending is limited to $50,000 per fiscal year

The commissioner may enter an appearance, file an answer, appear at hearings, defend the action, or take any appropriate action on behalf of and in the name of the real estate recovery fund.

• ✓Commissioner may defend actions in the name of the fund
• ✓Commissioner may take recourse through any appropriate method of review

Owners/agents are liable to purchasers for untrue material statements or omissions in the notice of intention or public report, and for fraudulent schemes, misrepresentation, or deceit in selling unsubdivided lands.

• ✓Liability applies to persons who acquire land during the period an untrue notice remained uncorrected, unless the buyer knew of the untruth
• ✓It is unlawful to employ any device/scheme/artifice to defraud or obtain money by material misrepresentation

Damages equal the amount paid plus improvements minus the smallest of specified values. Attorney fees are recoverable by prevailing purchaser. Strict limitation periods apply to enforcement actions.

• ✓Actions under subsections A or B must be brought within one year of discovery of the untrue statement or omission
• ✓Actions under subsection C must be brought within two years of the violation
• ✓No action may be brought by a purchaser more than three years after the sale or lease

An applicant objecting to a denial of a public report may file a written request for a hearing within 30 days after receipt of the order. Strict timelines govern the hearing and decision, with automatic issuance of the report if deadlines are missed.

• ✓Written request for hearing must be filed within 30 days after receipt of the order of denial
• ✓The commissioner must hold the hearing within 20 days thereafter (absent requested postponement)
• ✓If the hearing is not timely held or a proposed decision is not rendered within 45 days after submission, the denial is rescinded and a public report is issued

Pleadings after the initial complaint and notice of hearing may be served personally or by mail. Mail service adds response time, and copies must also be filed with the Attorney General.

• ✓Service may be by personal service or mail to the last known address of the party, statutory agent of record, or party's counsel
• ✓If service is by mail, response time is increased by five days and service is complete upon mailing
• ✓Any person filing a pleading or brief with the Department must also file with the Attorney General

A licensee's or applicant's residential address and phone number are not public unless the commissioner finds disclosure serves justice and public interest. Email addresses are released only to courts or governmental agencies for legitimate purposes. Social security numbers may not be released except to a court or governmental agency for a legitimate purpose.

• ✓Residential address/phone not public unless commissioner finds disclosure serves justice and public interest
• ✓SSN released only to a court or governmental agency for a legitimate governmental purpose

A licensee's/applicant's residential address, residential phone, and email are not available to the public unless the commissioner finds disclosure serves justice and the public interest. Email is released only to a court or governmental agency for legitimate purposes. SSNs are not released except to a court or governmental agency for legitimate purposes.

• ✓Residential address and phone not public unless commissioner finds disclosure serves justice and public interest
• ✓Email released only to a court or governmental agency for legitimate purposes
• ✓SSN not released except to a court or governmental agency for legitimate purpose

Administrative actions involving an active-duty military service member as a necessary party may be stayed during service or within sixty days after, subject to specific limits.

• ✓An action involving an active-duty military member as a necessary party occurring during service or within sixty days after may be stayed at the entity's discretion
• ✓The entity may not stay on its own motion if the service member makes a written objection
• ✓On application, the action shall be stayed unless the written decision finds the member's ability to pursue the claim/defense is not prejudiced by military service

If an agency (defined as the department of environmental quality) takes arbitrary, capricious, or unlawful action, it becomes an appealable agency action if the party notifies the director in writing within ten days, the agency continues the action beyond ten days, and it is not otherwise excluded. This applies only when no other administrative or judicial remedy exists.

• ✓Party must notify the agency director in writing within 10 days of the action
• ✓Agency must continue the action more than 10 days after receiving notice
• ✓Section applies only if no other administrative or judicial appeal is provided
• ✓Prevailing party recovers reasonable costs and fees; frivolous appeals may owe the agency

Notwithstanding other law, a licensee may forgo an administrative appeal and seek judicial review of an agency's grant, denial, modification or revocation of a permit issued under title 49 (environmental quality).

• ✓Licensee may forgo administrative appeal for title 49 permits
• ✓Judicial review available for grant, denial, modification or revocation of a title 49 permit
• ✓'Action against the party' includes decisions, inspections, investigations, property entry, notices of violation

Each employing broker must maintain a definite place of business or an active and valid statutory agent on file with the Corporation Commission, and must notify the department. Change or abandonment of a business location or statutory agent without notice automatically cancels the employing broker's license and severs employed salesperson/associate broker licenses.

• ✓Employing broker must maintain a definite place of business or valid statutory agent
• ✓Change or abandonment without notice automatically cancels the license and severs employees

Each designated broker (and employing broker if applicable) must affix a clearly visible sign at the entrance showing the broker's name, business name if different, and wording establishing broker status. On removal from a location the sign must be removed, and only the licensed name may be displayed.

• ✓Sign must be clearly visible at entrance with broker name and status
• ✓Only the name under which the broker is licensed may be displayed