Article 10 - Uniform Administrative Hearing Procedures (41-1092 through 41-1092.12) +6Arizona · Real Estate · English

Agencies must serve notice of an appealable agency action or contested case identifying the statute/rule and violation, and describing the party's right to a hearing and informal settlement conference.

• ✓A party may obtain a hearing by filing a notice of appeal or request for hearing with the agency within 30 days after receiving the notice
• ✓The notice of appeal must include a concise statement of reasons, detailed information on questions of law, relevant supporting documentation, and how the party is adversely affected
• ✓An agency head may accept an untimely appeal if good cause is shown

The ALJ must issue a written decision within 20 days after the hearing concludes. The agency head may accept, reject, or modify it within 30 days.

• ✓The ALJ must issue a written decision within 20 days after the hearing concludes, including findings of fact and conclusions of law
• ✓Within 30 days after the office sends the decision, the agency head/board may review and accept, reject, or modify it; rejection/modification requires written justification; if the agency does not act in time, the ALJ decision is certified as final
• ✓A party may appeal a final administrative decision under title 12, chapter 7, article 6; if no hearing was requested on a notice of appealable agency action, the action is not subject to judicial review

A timely and sufficient renewal application keeps an existing continuing-activity license in effect until finally determined. Revocation/suspension requires notice and hearing, except emergency summary suspension.

• ✓If a licensee makes timely and sufficient application for renewal of a continuing-activity license, the existing license does not expire until the application is finally determined
• ✓Revocation, suspension, annulment, or withdrawal of a license is unlawful unless the agency first provides notice and an opportunity for a hearing
• ✓If the agency finds public health, safety, or welfare imperatively requires emergency action and includes that finding in its order, it may order summary suspension pending proceedings

Article 10 defines administrative law judge, adversely affected party, appealable agency action, final administrative decision, licensee, and self-supporting regulatory board.

• ✓An 'appealable agency action' determines legal rights/duties/privileges of a party (including administrative completeness) and is not a contested case; it excludes rules, interim orders, and internal management matters
• ✓An 'adversely affected party' must show actual injury/economic damage as a direct result of the action (not as a competitor or general taxpayer) and timely submit comments including the legal questions basing the appeal
• ✓A 'final administrative decision' is a decision subject to judicial review under title 12, chapter 7, article 6; self-supporting regulatory boards include boards like accountancy, cosmetology, nursing, pharmacy, etc.

The Office of Administrative Hearings (OAH) is established with a governor-appointed director who serves as chief administrative law judge and oversees hearings, training, and reporting.

• ✓State agencies supported by the general fund (and the registrar of contractors) must use OAH services; other agencies must contract for them; an agency head/board sitting as an ALJ need not use OAH
• ✓The director may not require legal representation to appear before an administrative law judge
• ✓ALJs must have graduated from an accredited law school or have at least two years of administrative/managerial experience in the assigned subject matter

Hearings for appealable agency actions and contested cases must generally be held within 60 days, with special rules for self-supporting regulatory boards.

• ✓Hearings for appealable agency actions must be held within 60 days after the notice of appeal is filed; contested case hearings within 60 days after the agency's request
• ✓The agency must prepare and serve a notice of hearing on all parties at least 30 days before the hearing, stating time/place/nature, legal authority, statutes/rules, and matters asserted
• ✓Hearing dates may be advanced or delayed by agreement or good cause; hearings may be expedited on a showing of extraordinary circumstances or possible irreparable harm

Upon written request by the appellant or respondent, the agency must hold an informal settlement conference within 15 days.

• ✓A written request for an informal settlement conference must be filed no later than 20 days before the hearing; the agency must hold it within 15 days of receiving the request
• ✓The request does NOT toll the 60-day period in which the hearing must be held
• ✓Statements made at the conference for settlement purposes are inadmissible in any subsequent administrative hearing; parties waive their right to object to the agency representative's participation in the final decision

Parties may be represented by counsel or proceed without counsel, submit evidence, and cross-examine witnesses. ALJs may issue subpoenas and control the hearing.

• ✓All parties may respond and present evidence; all relevant evidence is admissible but the ALJ may exclude evidence whose probative value is outweighed by unfair prejudice, confusion, or undue delay
• ✓All hearings must be recorded at the agency's expense; a party requesting a transcript pays for it
• ✓A hearing may be informal without strict adherence to judicial rules of evidence; a decision is not reversible on that basis if supporting evidence is substantial, reliable, and probative

The burden of persuasion in administrative hearings depends on the type of agency action at issue.

• ✓At a hearing on denial of a license/permit or modification denial, the applicant has the burden of persuasion
• ✓At a hearing on agency action to suspend, revoke, terminate, or modify a license, or to impose fees/penalties or a compliance order, the agency has the burden of persuasion
• ✓Findings of fact must be based exclusively on the evidence and matters officially noticed; a final decision must include separately stated findings of fact and conclusions of law

For most licensing-related appeals, a licensee may accept the ALJ's decision as final within 10 days, with certain exceptions.

• ✓A licensee may accept the ALJ's written decision as final within 10 days of receiving it, causing it to be certified as final by the office
• ✓This does not apply to decisions on administrative completeness or where the agency determined the licensee poses a threat of grave harm/danger or acted with complete disregard for public well-being
• ✓If the agency intends to reject/modify, the parties must meet and confer within 30 days regarding proposed modifications, then the agency must file its final decision within 20 days after conferring

A party may file a motion for rehearing or review within 30 days after service of the final administrative decision, with special exhaustion rules for self-supporting regulatory boards.

• ✓A motion for rehearing/review may be filed within 30 days after service of the final decision; the opposing party may respond within 15 days
• ✓After a hearing and final decision, a party is generally NOT required to file a motion for rehearing to exhaust administrative remedies — EXCEPT for self-supporting regulatory boards, where a motion within 30 days is required to be eligible for judicial review
• ✓Service is complete on personal service or five days after the decision is mailed to the party's last known address

Article 10 applies to all contested cases and appealable agency actions except those of specifically listed agencies.

• ✓Exempt agencies include the Dept. of Corrections, Board of Executive Clemency, Industrial Commission, Corporation Commission, Board of Regents, State Personnel Board, and others
• ✓The Dept. of Revenue is exempt regarding income tax/withholding tax matters; the Dept. of Economic Security and Dept. of Child Safety have specified exemptions
• ✓Auction protest procedures under title 37, chapter 2, article 4.1 are exempt from this article

Every notice or decision under Article 10 must be served by personal delivery, certified mail return receipt, or another method reasonably calculated to give actual notice.

• ✓Service must be by personal delivery, certified mail (return receipt requested), or another method reasonably calculated to effect actual notice to the last address of record
• ✓Each party must inform the agency and the office of any change of address within five days of the change

A person generally may not refuse to testify or produce evidence on self-incrimination grounds unless it constitutes compelled testimony or private papers privileged under the constitution.

• ✓A person must claim the privilege against self-incrimination before producing testimony or papers
• ✓The office/agency may issue an order compelling testimony with prior written approval of the attorney general
• ✓Compelled evidence is not admissible in a criminal prosecution except for perjury, false swearing, tampering with evidence, or other offenses committed in connection with the appearance

If the Department of Environmental Quality takes arbitrary, capricious, or unlawful action, it may become an appealable agency action allowing recovery of costs and fees.

• ✓The party must notify the agency director in writing within 10 days of the arbitrary/capricious/unlawful action, and the agency must continue the action more than 10 days after receiving notice
• ✓If the party prevails, the agency must pay reasonable costs and fees; if the appeal is frivolous, the ALJ may require the party to pay the agency's costs and fees
• ✓This section applies only where no other administrative remedy or appeal is provided by law, and 'agency' means the Department of Environmental Quality

Before entering any binding agreement, a wholesale buyer of residential real property must disclose in writing to the seller that the buyer is a wholesale buyer. A wholesale seller must disclose in writing to the buyer that the seller is a wholesale seller holding an equitable interest who may not be able to convey title. These disclosures must be made prior to any binding agreement.

• ✓Wholesale buyers must disclose their status in writing to the seller before a binding agreement
• ✓Wholesale sellers must disclose in writing that they hold only an equitable interest and may not convey title

A wholesale buyer enters a purchase contract as buyer and assigns it to another; a wholesale seller enters as seller without legal title and assigns the contract. Residential real property has fewer than five dwelling units. If a wholesale buyer violates the disclosure rule, the seller may cancel before close of escrow without penalty and retain earnest money. If a wholesale seller violates it, the buyer may cancel before close of escrow without penalty and be refunded all earnest money.

• ✓A wholesale buyer assigns their purchase contract; a wholesale seller assigns without holding legal title
• ✓Seller may cancel and retain earnest money if a wholesale buyer violates disclosure; buyer may cancel and be refunded if a wholesale seller violates disclosure

Section 32-2186 establishes the real estate recovery fund with liability limits and definitions. The fund compensates victims of licensee fraud or misconduct who obtain an unsatisfied judgment.

• ✓The recovery fund compensates persons harmed by licensee fraud or misrepresentation
• ✓Statutory per-transaction and per-licensee liability limits apply
• ✓The fund is a last resort after other collection efforts fail

Section 32-2187 requires payments to the real estate recovery fund, typically funded through licensee fees and assessments.

• ✓Licensees contribute to the recovery fund through fees or assessments
• ✓The fund is maintained to ensure availability for eligible claims

Sections 32-2188 through 32-2188.05 set out the statute of limitations, service of summons, application for payment, insufficient monies provisions, notice to judgment debtor, correction of deficiencies, investigation, final decision, and the claimant's right to appeal.

• ✓A claimant must first obtain a judgment against the licensee (32-2188)
• ✓Application for payment must be filed within the statutory limitations period
• ✓Denial of a claim may be appealed under 32-2188.05

Sections 32-2189 through 32-2193.02 cover management of the fund, the commissioner's standing in court, subrogation of rights and collection, waiver of rights, effect on disciplinary action, and surety bond requirements.

• ✓Upon payment, the fund is subrogated to the claimant's rights against the licensee (32-2192)
• ✓Payment from the fund results in automatic license suspension until repayment
• ✓Recovery fund payment does not preclude separate disciplinary action (32-2193.01)

To renew, a salesperson or associate broker must complete 24 credit hours of approved CE in specified categories, with a minimum of three hours in each mandatory category (subsections (A)(5)(a) through (h)). A designated or delegated associate broker must also complete 24 hours with three hours in each mandatory category (a)–(f) and must complete a Broker Management Clinic under A.R.S. § 32-2136 in the Requirements for Licensees category. CE completed after fulfilling the renewal requirement and within 90 days of renewal may count toward the next license period but may not count for two license periods.

• ✓Salespersons/associate brokers need 24 CE hours with 3 hours in each mandatory category
• ✓Designated/delegated brokers need 24 hours plus a Broker Management Clinic
• ✓CE cannot be counted toward two license periods

The CE categories are: (a) Agency law; (b) Contract law; (c) Requirements for Licensees (license laws, Article 26 of the Constitution, A.R.S. Title 32 Ch. 20, A.A.C. Title 4 Ch. 28); (d) Real estate legal issues; (e) Fair housing and Americans with Disabilities Act; (f) Disclosure; (g) Business brokerage (may satisfy Legal Issues, Contract Law, Disclosures, or General); and (h) General real estate. Teaching how to fill in a form template does not qualify for CE credit.

• ✓The eight CE categories include Agency, Contract, Requirements for Licensees, Legal Issues, Fair Housing/ADA, Disclosure, Business Brokerage, and General
• ✓Teaching how to fill in a form template does not meet CE content requirements

A salesperson renewing for the first time may include credit for the Contract Writing class taken under A.R.S. § 32-2124(L) if taken within one year before original licensure. A broker renewing for the first time may include credit for a Broker Management Clinic under A.R.S. § 32-2136 taken before original licensure. An applicant may substitute qualifying subject matter hours from a 90-hour broker's prelicensure course taken since the last renewal for the required CE.

• ✓First-time salesperson renewal may credit a Contract Writing class taken within one year before licensure
• ✓First-time broker renewal may credit a pre-licensure Broker Management Clinic
• ✓Qualifying broker prelicensure hours taken since last renewal may substitute for CE

Under A.R.S. § 32-2130, the Commissioner may waive all or part of the CE requirement or grant additional time for good cause when a written request is submitted. Good cause may include: employment by the state/subdivision involving real estate matters, a state officer/employee whose license is inactive due to conflict of interest, completion of a specialized course, an approved instructor requesting waiver for a course taught, or other extraordinary circumstances. A licensee granted additional time must complete CE by the deadline or face possible discipline.

• ✓CE waivers require a written request showing good cause
• ✓Good cause examples include public real estate employment, instructor-taught courses, and extraordinary circumstances
• ✓Failure to complete CE within granted additional time may result in disciplinary action

Only a school holding a Certificate of Approval may offer a distance learning course, and must obtain course approval before advertising or issuing credit. Approved courses must contain individual instructional modules, at least one learning objective per module, a structured learning method, a diagnostic assessment (including scenario-based questions measuring comprehension of each concept), and remediation (module repetition until understood). Schools must also file a plan describing how they handle hardware and software failure.

• ✓Distance learning courses may only be offered by schools with a Certificate of Approval
• ✓Courses must include modules, learning objectives, diagnostic assessments, and remediation
• ✓Schools must file a hardware/software failure plan

An instructor or school administrator must grade distance learning courses and certify the student is the licensee attending, only if the student completes all modules, attends required live instruction/testing, and passes a final exam. Acceptable certification means include two-factor authentication, random audits of at least 10% of attendance, and direct/indirect visual confirmation. Certification may NOT rely on a student-created username/password, a signed affidavit, or verification of publicly available information.

• ✓Student identity certification may use two-factor authentication, 10% random audits, or visual confirmation
• ✓Certification may not rely on a username/password, affidavit, or publicly available information
• ✓Student must complete all modules, required live hours, and pass a final exam

To renew, salespersons and associate brokers must complete 24 credit hours of approved CE, with a minimum of three hours in each mandatory category. Designated/delegated brokers must complete 24 hours including a Broker Management Clinic. CE completed within 90 days after fulfilling requirements may count toward the next period but not two periods.

• ✓Renewal requires 24 credit hours of CE with a minimum of three hours in each mandatory category
• ✓Designated/delegated brokers must complete a Broker Management Clinic under A.R.S. 32-2136
• ✓CE completed after fulfillment and within 90 days may count for the next period but not two periods

CE categories include Agency law, Contract law, Requirements for Licensees, Real estate legal issues, Fair housing and ADA, Disclosure, Business brokerage, and General real estate. Teaching how to fill in a form template does not meet minimum content requirements for CE credit.

• ✓Mandatory CE categories include Agency law, Contract law, Requirements for Licensees, Legal issues, Fair Housing/ADA, and Disclosure
• ✓Teaching how to fill in a form template does not qualify for CE credit

Only a school with a Certificate of Approval may offer distance learning courses, which require course approval before advertising or issuing credit. Courses need modules, learning objectives, structured methods, diagnostic assessments, and remediation. Schools must certify student identity through acceptable means, not usernames/passwords or affidavits.

• ✓Only a school holding a Certificate of Approval may offer a distance learning course, approved before advertising
• ✓Student certification may use two-factor authentication, random audits of 10%, or visual confirmation
• ✓Certification may not use student-created usernames/passwords, affidavits, or publicly available information

The commissioner may waive all or part of CE or grant additional time for good cause, including state employment involving real estate matters, inactive status due to conflict of interest, completion of related courses, or extraordinary circumstances.

• ✓The commissioner may waive CE or grant additional time for good cause upon written request
• ✓Good cause includes state real estate employment, conflict-of-interest inactive status, or extraordinary circumstances

The overall time frame for a license decision consists of two components: the administrative completeness review time frame and the substantive review time frame.

• ✓Administrative completeness review time frame = days from receipt until the agency determines the application contains all required components; it excludes public notice and substantive review time
• ✓Substantive review time frame = days after completing the completeness review during which the agency determines whether substantive criteria are met; public notice and hearings fall within it
• ✓Overall time frame = days after receipt during which the agency decides to grant or deny; it consists of both the completeness and substantive review time frames

An agency must issue a written notice of completeness or deficiencies within the completeness review time frame; failure results in the application being deemed complete.

• ✓If not administratively complete, the agency must provide a comprehensive list of specific deficiencies; issuing timely notice suspends the completeness and overall time frames until missing information is received
• ✓If the agency issues no notice of completeness or deficiencies within the time frame, the application is deemed administratively complete
• ✓A determination that an application is not administratively complete is an appealable agency action (except applications to the department of water resources under title 45)

During substantive review, an agency may make one comprehensive request for additional information (or supplemental by agreement), which suspends the time frames.

• ✓An agency may make one comprehensive written request for additional information; supplemental requests require mutual written agreement
• ✓A comprehensive or agreed supplemental request suspends the substantive and overall time frames until additional information is received
• ✓By mutual written agreement, the substantive and overall time frames may be extended, but the extension may not exceed 25% of the overall time frame

Unless mutually extended, an agency must grant or deny a license within the overall time frame, and denial notices must include justification and appeal rights.

• ✓An agency must issue written notice granting or denying a license within the overall time frame unless mutually extended
• ✓A denial notice must justify the denial with statute/rule references
• ✓A denial notice must explain the applicant's appeal right, including the number of days to file a protest and the name/phone number of a contact person

If an agency fails to decide within the overall time frame, it must refund all application fees and pay a monthly penalty to the state general fund.

• ✓The agency must refund all fees charged for reviewing/acting on the application and excuse unpaid fees, made within thirty days after expiration, without requiring a refund application; applies only to applications subject to substantive review
• ✓The agency must pay a penalty to the state general fund of 2.5% of total fees received for each month after expiration until the license is granted or denied
• ✓The agency continues to process the application and pays refunds/penalties from the fund where fees were originally deposited

Agencies must have rules establishing overall time frames stated separately for completeness and substantive review, considering enumerated factors, with certain exceptions.

• ✓Agencies must have final rules stating separately the administrative completeness review and substantive review time frames for each license type
• ✓In setting time frames, agencies must consider complexity, agency resources, economic impact of delay, public health/safety impact, use of volunteers, general licenses, cooperation, and flexibility
• ✓The article does not apply to licenses issued under tribal state gaming compacts, within seven days of initial application, or by lottery method

An agency issuing licenses must provide certain information to applicants when they obtain an application.

• ✓The agency must provide a list of all steps required to obtain the license, the applicable licensing time frames, and a contact person's name and phone number
• ✓This requirement does not apply to the Arizona peace officer standards and training board

Before parties enter any binding agreement, a wholesale buyer of residential real property must disclose in writing that it is a wholesale buyer, and a wholesale seller must disclose in writing that it holds only an equitable interest and may not be able to convey title. This protects consumers in real estate wholesaling/assignment transactions.

• ✓A wholesale buyer must disclose in writing to the seller that it is a wholesale buyer before any binding agreement
• ✓A wholesale seller must disclose in writing that it holds only equitable interest and may not convey title

If a wholesale buyer violates the disclosure requirement, the seller may cancel the contract any time before close of escrow without penalty and retain the buyer's earnest money. If a wholesale seller violates it, the buyer may cancel before close of escrow without penalty and be refunded all earnest money. These rights apply notwithstanding contrary contract provisions.

• ✓On buyer violation, the seller may cancel before close and retain the earnest money
• ✓On seller violation, the buyer may cancel before close and be refunded all earnest money

A wholesale buyer enters a purchase contract as buyer and assigns that same contract to another. A wholesale seller enters a purchase contract as seller, does not hold legal title, and assigns that same contract to another. Residential real property means real property with fewer than five dwelling units.

• ✓A wholesale buyer buys via contract then assigns that same contract to another person or entity
• ✓A wholesale seller does not hold legal title and assigns the purchase contract to another party

Article 9 defines core timeshare terms. A timeshare plan grants ownership/use rights for less than a full year. A timeshare estate is coupled with a real property estate, while a timeshare use is not. Plans may be single-site or multisite.

• ✓A timeshare plan grants rights to use accommodations for a period less than a full year during any given year
• ✓A timeshare estate is coupled with an estate in real property; a timeshare use is not coupled with real property estate
• ✓A component site is a specific geographic location; separate phases under common management count as a single component site

A developer creates a timeshare plan or is in the business of selling timeshare interests or employs sales agents. A successor developer must offer at least 12 interests. A sales agent sells or offers to sell timeshare interests to individuals.

• ✓A developer creates a timeshare plan or is in the business of selling interests or employs sales agents
• ✓A successor by transfer is a developer only if offering at least twelve timeshare interests and in the selling business
• ✓A sales agent directly or through employees/agents sells or offers to sell timeshare interests to individuals in the state

An exchange program is a method for voluntary exchange of timeshare interests. A reservation system requires purchasers to compete for use of accommodations in a multisite plan. Being required to use an exchange program as principal means constitutes a reservation system.

• ✓An exchange program is any method for voluntary exchange of timeshare or property interests
• ✓A reservation system requires competing with other purchasers to reserve accommodations
• ✓Required use of an exchange program as principal means of obtaining occupancy rights is a reservation system

Article 9 defines core timeshare terms including timeshare plan, timeshare interest, timeshare estate versus timeshare use, developer, component site, and single-site versus multisite plans. Understanding these distinctions is critical.

• ✓A 'timeshare interest' includes either a timeshare estate (coupled with a real property estate) or a timeshare use (not coupled with a real property estate)
• ✓A 'timeshare plan' grants the right to use accommodations for a period less than a full year, and may be single site or multisite
• ✓A 'developer' includes one who creates a plan or succeeds to the developer's interest and offers at least twelve interests while in the business of selling

Timeshare marketing terms are defined precisely. Offer excludes general resort promotion not intended to market timeshares. A premium is an incentive to attend a presentation or tour.

• ✓'Advertisement' means communications directed to persons in this state promoting or offering a timeshare plan
• ✓'Offer' does not include general promotion of a resort not intended to market timeshare interests
• ✓'Premium' means anything of value given as an incentive to attend a presentation or tour a timeshare property

A reservation system requires purchasers to compete for accommodation use in a multisite plan. An exchange program allows voluntary exchange of timeshare interests, but single-site assignments are excluded.

• ✓A 'reservation system' involves competing with other purchasers for accommodation use in the same multisite plan
• ✓'Exchange program' excludes assignment of use rights within a single site timeshare plan