R4-28-A1211. Assurances for Completion and Maintenance of Improvements +17Arizona · Real Estate · English

Applicants must provide one or more approved assurances for completion of improvements: surety/completion bond, irrevocable letter of credit, loan commitment, trust/escrow account, city/county trust agreement, written escrow agreement, subdivision assurances, or another Department-approved method.

• ✓Assurances must be payable to a third party who is not the developer
• ✓Assurances must be in an amount 10% greater than the estimated cost to complete
• ✓Assurances must include a registered engineer's, architect's, or contractor's cost estimate
• ✓Expiration date cannot be prior to the estimated completion of the last improvement

Under subdivision assurances, the municipal/county government prohibits occupancy and the subdivider cannot close escrow until all improvements are complete. If sales include unimproved (vacant) lots, the subdivider must deposit all earnest money into a neutral escrow depository until escrow closes.

• ✓No escrow closes until all subdivision improvements are complete (with phasing exception)
• ✓Purchase contract must state in bold that escrow won't close until occupancy clearance issued
• ✓Vacant lot sales require earnest money in a neutral escrow depository until escrow closes
• ✓If completion date not met, purchaser may cancel within 30 days for a full refund

A broker with more than one place of business must procure an additional license for each branch office. Branch licenses are issued in the same name as the principal office, must be posted in the branch, and signs must include 'branch office.' Each branch must be under management of a broker or licensed salesperson.

• ✓An additional license is required for each branch office maintained
• ✓Branch office signs must include the designation 'branch office'
• ✓Each branch office must be managed by a broker or licensed salesperson

If a designated broker is unable to act within 24 hours, they may designate in writing a licensee or another designated broker to act for them. The designation may not exceed 30 days, the original must be kept one year, and a salesperson designee may not hire or sever licensees.

• ✓Designation for temporary absence must be in writing and may not exceed 30 days
• ✓A salesperson designee may not be authorized to hire or sever licensees
• ✓Original designation must be kept at the office for one year; a written designation is required for each absence

Public reports issued after set dates for affected property must include mandatory statements about military training routes and electronics ranges.

• ✓Reports after Dec 31, 2004 (training route) and after Dec 31, 2008 (electronics range) must state the property location and that maps are maintained/posted online
• ✓The report may include a disclaimer that the subdivider has no control over flights, noise, or testing/training operations
• ✓Disclosures must be included in reservation documents or conditional sales contracts when sales occur before a public report is issued

Public reports issued after Dec 31, 2006 for property under restricted air space must include mandatory statements and may include a disclaimer.

• ✓Reports after Dec 31, 2006 for property under restricted air space must state the location and that maps are maintained/posted online
• ✓A subdivider complying with the required disclosures is not liable for acts or failures to act in disclosing the restricted air space
• ✓Pre-cutoff reports and reservation/conditional sales documents do not require amendment or reissuance

The cemetery chapter does not apply to religious corporations/churches operating cemeteries, private or municipal cemeteries, fraternal burial parks under ten acres established before July 2, 1963 with member-only sales, or the Arizona pioneers' home cemetery.

• ✓Religious corporations and church-operated cemeteries are exempt
• ✓Private or municipal cemeteries are exempt
• ✓Fraternal burial parks under 10 acres established before July 2, 1963 with member-only sales are exempt
• ✓The Arizona pioneers' home and its cemetery are exempt

Before offering cemetery plots for sale, the owner or agent must notify the commissioner in writing with detailed information including ownership, legal description, title condition, terms, a recorded map, financial responsibility, flood/drainage status, utilities, and the designated broker. A 'principal' is any person with a 10% or more financial or beneficial interest.

• ✓Written notice to the commissioner is required before offering plots for sale
• ✓Notice must include a recorded map, title condition, and terms of sale
• ✓Notice must include proof of financial responsibility and utility availability
• ✓'Principal' means any person or entity holding a 10% or more interest
• ✓If ownership transferred, a CPA statement on trust fund deposits is required

Conveyance of a plot does not limit the purchaser's right to testify before public bodies about acts affecting the property; contrary contract provisions are against public policy. The commissioner may by special order exempt certain cemeteries when compliance is not essential to the public interest.

• ✓Contract provisions limiting a purchaser's right to testify are against public policy
• ✓Commissioner may supplement notice and require periodic reports
• ✓Commissioner may grant special-order exemptions for special-characteristic cemeteries

The Department must hold or contract for at least one state licensing examination each week. A state license examination shall not be returned to the applicant, who is notified in person of results by 'passed' or 'did not pass.' A non-passing applicant's notification also shows the score and relative score for each content area. Qualifying to take or passing the exam does not waive the Commissioner's right to deny a license if grounds exist under A.R.S. § 32-2153 or other statute.

• ✓At least one state license exam is held each week and exams are not returned to applicants
• ✓Passing the exam does not waive the Commissioner's right to deny a license for statutory grounds

The applicant must disclose known material facts including flooding/drainage problems (with an engineer's letter addressing flood plain, 100-year storm, and flood insurance), subsidence/expansive soils, adverse nearby land uses, agricultural nuisances, geological/environmental hazards, and Superfund/WQARF site locations.

• ✓Flooding/drainage disclosure requires an engineer's or flood district letter covering flood plain, 100-year storm effects, and whether flood insurance is required
• ✓Must disclose subsidence/expansive soils, adverse land uses, agricultural nuisances, and geological/environmental hazards
• ✓Must disclose if lots lie within a federal Superfund site or state WQARF site boundary

The applicant must disclose the water provider type and contact, compliance status, line locations, completion costs to the lot line, maintenance responsibility, and required water reports. A water adequacy report is required for subdivisions outside a groundwater active management area; a water availability report is required for unsubdivided land.

• ✓Must disclose water provider type/contact, compliance status, and completion/hookup costs and dates estimates were obtained
• ✓A water adequacy report from ADWR is required for subdivisions outside a groundwater active management area
• ✓A water availability report from ADWR is required for unsubdivided land and must be summarized in promotional materials/contracts
• ✓Outside an Active Management Area with no current water source, an ADRE addendum advising the buyer to investigate water availability is required

The applicant must disclose available utilities (electric, telephone, internet, gas, others), providers' contact info, utility locations, who extends utilities to lot lines, conduit-only arrangements, estimated costs/completion dates, and other fees. Updated utility cost estimates do not constitute a material change.

• ✓Must disclose utility providers, locations, who extends each utility to the lot lines, and estimated costs/completion dates
• ✓Must disclose additional service charges, hookup, turn-on, and meter fees with the dates estimates were obtained
• ✓Updated utility costs do not constitute a material change

The applicant must disclose sewage provider type and contact, ADEQ compliance status, completion costs to the lot line, maintenance responsibility, individual disposal system requirements/costs, refund policy if a system cannot be installed, and dry sewer future-connection details.

• ✓Must disclose the sewage disposal method, provider contact, and ADEQ compliance status
• ✓Must disclose the type, requirements, and costs of any individual sewage disposal system and refund policy if one cannot be installed
• ✓Must disclose dry sewer future-connection provider, costs, and estimated connection date

An agency must limit all occupational regulations to those demonstrated to be necessary to specifically fulfill a public health, safety or welfare concern. Individuals harmed may petition the agency to repeal or modify a regulation, and the agency must respond within ninety days.

• ✓Occupational regulations must be limited to necessary public health/safety/welfare concerns
• ✓A harmed individual may petition to repeal or modify a regulation
• ✓Agency must respond to the petition within 90 days

Any individual may file an action in a court of general jurisdiction to challenge an occupational regulation. To prevail, the court must find the regulation burdens entry/participation and the state failed to prove it is necessary for a public health, safety or welfare concern, both by preponderance of evidence.

• ✓Any individual may challenge an occupational regulation in court, with or without a prior petition
• ✓Plaintiff must show by preponderance the regulation burdens entry or participation
• ✓State must prove by preponderance the regulation is necessary for public health/safety/welfare
• ✓If plaintiff prevails, the court enjoins enforcement and awards attorney fees and costs

Sections 32-2194 through 32-2194.03 cover exceptions, notice of intention to sell cemetery property, examination by the commissioner, and issuance or denial of a certificate of authority. A certificate of authority is required to sell cemetery property.

• ✓A certificate of authority is required before selling cemetery property
• ✓Notice of intention must be filed with the commissioner (32-2194.01)
• ✓Sales made without required authority may be voidable

Sections 32-2194.24 through 32-2194.30 require trust funds to be established before a certificate of authority is granted, before advertising as an endowed-care cemetery, and set initial and ongoing deposit requirements with restrictions on use of care funds.

• ✓An endowment-care trust fund must be established before advertising as endowed-care
• ✓Initial and per-sale deposits into the endowed-care fund are required
• ✓Care fund principal is restricted; generally only income may be used for care

Sections 32-2194.14, 32-2194.31, and 32-2194.32 address cemetery broker disclosures, crematories, and opening and closing of burial places.

• ✓Cemetery brokers must make required disclosures (32-2194.14)
• ✓Crematory operations are regulated (32-2194.31)
• ✓Opening and closing of burial places is subject to statutory provisions

A final decision of the commissioner may be appealed to the superior court in Maricopa County under title 12, chapter 7, article 6 (except as provided in 41-1092.08(H)). If the appealing party is declared indigent, the department pays transcript costs and produces a certified administrative record at no charge.

• ✓Final commissioner decisions appealed to Maricopa County superior court
• ✓Department pays transcript/record costs for indigent appellants

If a person engaged in an unlawful practice is concealing assets/self or about to leave the state, the commissioner may apply ex parte to superior court for appointment of a receiver, a writ of ne exeat, or both. The court reviews the verified application and evidence.

• ✓Commissioner may apply ex parte for a receiver or writ of ne exeat when assets/self are concealed or the person is about to leave the state
• ✓If a receiver is appointed without notice, a copy of the order must be served to the person's last address on file with the department
• ✓The person has the right to request a hearing within 10 days, held within 30 days of the order

Timeshare purchasers may rescind the purchase agreement without cause by midnight of the tenth calendar day after execution. This right must be conspicuously disclosed, and a longer developer-allowed period must be reflected.

• ✓Purchaser may rescind without cause by midnight of the tenth calendar day following execution
• ✓Rescission rights must be conspicuously disclosed immediately before the purchaser's signature space
• ✓Closing (delivery of deed) is prohibited before the ten calendar day cancellation period expires

The purchase agreement must include specific disclosure language about the cancellation right, the requirement of written notice to the seller, and that notice is effective on the date sent. The seller's address and phone must be listed.

• ✓Cancellation notice must be in writing and is effective on the date sent to the seller's address
• ✓Denial of rescission rights without a good faith legal basis is an unlawful practice under section 44-1522
• ✓This section applies regardless of the date of issuance of the public report

Active license states the employing broker and location. Current license is active or eligible within the two-year period or one-year grace period while expired. Eligible license means the licensee holds a license but is not engaged by a broker and cannot perform active-license activities. Inactive license prohibits performing activities requiring an active license.

• ✓Active license states the name of the employing broker and location of employment
• ✓Current status = active or eligible, within the two-year license period or one-year expired grace period
• ✓Eligible and inactive licensees are prohibited from performing activities requiring an active license

A credit hour equals 50 minutes of instruction where content represents at least 80 percent of the approved course category. A module is instruction no shorter than .25 credit hours (12.5 minutes) and no longer than one credit hour (50 minutes).

• ✓A credit hour = 50 minutes of instruction; content must be at least 80% of the approved category
• ✓A module is between .25 credit hours (12.5 min) and one credit hour (50 min)

A material change is any significant change in the size/character of a development or interest, or one that significantly affects rights, duties, obligations, or use and enjoyment. Property interest means ownership or control of a lot, unit, or use in a development including subdivided/unsubdivided land, cemetery plots, condominiums, time-shares, membership camping contracts, or stock cooperatives.

• ✓Material change significantly affects the development or the rights/duties of developer or purchaser
• ✓Property interest includes subdivided land, cemetery plots, condominiums, time-shares, membership camping contracts, and stock cooperatives

A non-resident license applies to persons domiciled in Arizona less than one year who do not meet residency indicators (AZ driver's license, vehicle registration, employment, voter registration, banking, tax returns, etc.). Residency means a place of habitation lived in as other than a tourist, or owning/operating a business in Arizona.

• ✓Non-resident status applies to those domiciled in Arizona less than one year lacking residency indicators
• ✓Residency requires a place of habitation lived in as more than a tourist, or operating an AZ business

After examination, the commissioner must issue a certificate of authority unless grounds for denial exist. Grounds include failure to comply, misrepresentation/fraud, inability to deliver title, inadequate financial arrangements, or the applicant's felony/misdemeanor convictions, injunctions, or administrative orders.

• ✓Certificate of authority must be issued absent grounds for denial
• ✓Denial grounds include misrepresentation, fraud, and inability to deliver title
• ✓Denial grounds include convictions, injunctions, or administrative orders against principals
• ✓No plots may be sold without first obtaining a certificate of authority
• ✓Sales before the certificate are voidable by the purchaser within three years

Before plots are offered for sale, the commissioner must examine the cemetery and make findings public. The owner bears travel and subsistence costs of the examination plus an initial filing fee of $500 (or a lesser fee set by the commissioner) that must accompany the written notification.

• ✓Commissioner must examine the cemetery and make findings public before sales
• ✓Owner bears the actual cost of examination travel and subsistence
• ✓Initial filing fee is $500 or a lesser amount set by the commissioner

An applicant denied a certificate may request a hearing within 30 days; the hearing must be held within 25 days. If not held timely or if no decision within 45 days, the denial is rescinded and the certificate issues. The commissioner may investigate, issue summary orders, hold hearings, or seek injunctions and receivers for violations.

• ✓Hearing request must be filed within 30 days of the denial order
• ✓Hearing must be held within 25 days of the request
• ✓Failure to hold hearing timely or decide within 45 days rescinds the denial
• ✓Commissioner may seek a receiver or writ of ne exeat when assets are being concealed

All timeshare plans must maintain a one-to-one purchaser-to-accommodation ratio so eligible purchasers never exceed available accommodations in a calendar year. Delinquent purchasers still count as eligible.

• ✓Total purchasers eligible to use accommodations in a calendar year must never exceed total available accommodations that year
• ✓A purchaser delinquent in assessments is still considered eligible to use accommodations for ratio calculation

Any person selling or soliciting timeshare interests, or creating a timeshare plan with an Arizona accommodation, must register a notice of intent and application for public report. The application requires extensive documents and information.

• ✓Registration of a notice of intent and public report application with the department is required before selling or soliciting
• ✓The application must include owner/developer identity, comprehensive plan statement, legal description, title reports, financial assurances, and management provisions
• ✓'Principal' means any person/entity having a ten per cent or more financial interest or trust beneficiary holding ten per cent or more

A developer may conduct pre-sales before public report issuance if the application is administratively complete. Strict escrow, disclosure, and cancellation requirements apply during pre-sales.

• ✓All monies received must be placed in an independent escrow account not released until a public report is granted
• ✓Each purchaser must receive a copy of the proposed public report and the opportunity to cancel per section 32-2197.03
• ✓Purchasers get an additional cancellation opportunity if the approved public report has a material and adverse change from the proposed report

The purchase agreement must contain a separate disclosure document in at least 10-point type stating five key facts protecting the purchaser, including the cancellation right and the nature of timeshares.

• ✓Must be in at least ten-point type
• ✓Must disclose the buyer has 10 days to cancel without penalty
• ✓Must disclose ongoing responsibility for maintenance fees, taxes, and assessments; that timeshares are not investments; that the agreement is final; and the right to file a complaint with the attorney general

Before entering a purchase agreement, the seller must provide a separate disclosure document informing the buyer of actual and potential liabilities, including duration and a loan estimate of first-year financial obligations and assessments.

• ✓Must disclose the duration of the agreement or that it has no set duration
• ✓Must provide a loan estimate of the total first-year financial obligation including all potential assessments
• ✓If maximum first-year assessments are unknown, must disclose past three years' assessments and an estimate at least equal to the highest prior year's amount

If there are blank spaces in the purchase agreement or disclosure documents, the contract is voidable. The purchaser must separately initial each subsection A disclosure and sign the subsection B disclosure, and copies must be provided to the buyer and retained by the seller.

• ✓Blank spaces in the purchase agreement or disclosure documents make the contract voidable
• ✓Purchaser must separately initial each subsection A disclosure and sign the subsection B disclosure
• ✓Buyer must receive copies at signing; seller must keep signed copies
• ✓The commissioner may recommend or require a specified disclosure form

An adversely affected party must show actual injury and have timely commented; an appealable agency action determines legal rights but is not a contested case.

• ✓An adversely affected individual must provide evidence of actual injury/economic damage (not as a competitor or general taxpayer) and timely submit specific comments raising the legal questions
• ✓An appealable agency action determines legal rights, duties, or privileges (including administrative completeness) and is not a contested case
• ✓Appealable agency actions do NOT include interim orders by self-supporting regulatory boards, rules, orders, or statements of general policy, or internal management rules not affecting private rights

An administrative law judge (ALJ) may be an individual or an agency head/board/commission that sits as an ALJ conducting hearings in contested cases or appealable agency actions.

• ✓An ALJ conducts administrative hearings in a contested case or appealable agency action and makes decisions on them
• ✓An ALJ decision means the findings of fact, conclusions of law, and recommendations or decisions issued by the ALJ
• ✓A final administrative decision is one by an agency subject to judicial review under title 12, chapter 7, article 6

A licensee includes those issued a license and applicants appealing a licensing decision. The statute enumerates the self-supporting regulatory boards.

• ✓Licensee means an individual or business entity issued a license and subject to a licensing decision, and includes applicants who appeal a licensing decision (41-1092.08 or 41-1092.12)
• ✓Self-supporting regulatory boards are specifically enumerated and include boards such as accountancy, cosmetology, chiropractic, dental, medical, nursing, pharmacy, and technical registration
• ✓'Office' means the office of administrative hearings; 'Director' means its director

A person with a criminal record may petition an agency at any time, even before obtaining education, exams, or paying fees, to determine whether their record disqualifies them from a license. The petition must include the complete criminal history and information on current circumstances and rehabilitation.

• ✓A person may petition for a criminal record determination at any time
• ✓Petition must include complete criminal history record or authorization to obtain it
• ✓Petition may include rehabilitation evidence, employment history, and time since offense
• ✓Agency must issue a written determination within 90 days

An agency may find disqualification only if it concludes the state has an important public safety interest superior to the person's right AND the conviction falls within specific categories, such as felonies or violent crimes within three years, or certain serious/dangerous offenses at any time.

• ✓Disqualification requires an important state public safety interest superior to the person's right
• ✓Recent (within 3 years) felony or violent crime convictions may disqualify
• ✓Serious, dangerous, or dangerous-crime-against-children offenses may disqualify at any time
• ✓Set aside or sealed convictions cannot be the basis for disqualification

To conclude the state's interest is superior, the agency must determine by clear and convincing evidence that the offense substantially relates to the occupation (or poses a reasonable threat) and that the person is more likely to reoffend by holding the license than without it.

• ✓Agency must use clear and convincing evidence to establish superior state interest
• ✓Offense must substantially relate to the occupation or pose a reasonable threat
• ✓Person must be more likely to reoffend by holding the license than without it

When determining disqualification, the agency may not negatively consider nonconviction information, sealed/dismissed/expunged/pardoned convictions, juvenile adjudications, nonviolent misdemeanors, or fingerprint clearance card eligibility without a good cause exception.

• ✓Nonconviction information (arrests, diversions) cannot be considered negatively
• ✓Sealed, dismissed, expunged or pardoned convictions cannot be considered negatively
• ✓Juvenile adjudications and nonviolent misdemeanors cannot be considered negatively

If disqualified, the agency must advise the person of remedies including appeal and the earliest re-petition date (no later than two years). Agencies must submit annual reports on petitions granted, denied, and rescinded to the governor and legislature.

• ✓Agency must advise the person of appeal rights and earliest re-petition date
• ✓Earliest re-petition date must be no later than 2 years after final determination
• ✓Each agency must submit an annual report by July 1 to the governor and legislature
• ✓Report must include numbers of petitions granted, denied, and determinations rescinded

After securing approval, a subdivider may not materially change the plan or continue offering after a material change without first notifying the commissioner in writing. The commissioner may require amended public report and suspend approval. A buyer who executed a contract before the change may cancel within ten days after written notice if adversely impacted and the change was caused/known by the subdivider, or involves health/safety/use.

• ✓Written notice to commissioner required before material plan change
• ✓Buyer may cancel within 10 days of written notice of adverse material change
• ✓Cancellation allowed for health/safety/use changes even if subdivider unaware
• ✓Amendment filing fee is one-half the initial fee, minimum $250

After approval, subdividers must notify the commissioner in writing before making material changes, and the commissioner may require an amended public report or suspend approval.

• ✓Unlawful to materially change the plan or continue offering after a material change without first notifying the commissioner in writing
• ✓Commissioner may require amendment of the public report and may suspend approval pending amendment under 32-2157
• ✓Amended public report filing fee is one-half the initial fee but no less than $250, plus any inspection fee

Buyers/lessees who executed contracts before a material change may cancel under specified conditions.

• ✓A buyer/lessee may cancel within ten days after written notice of a material change if it adversely impacts them and was caused by (or known to) the subdivider
• ✓Cancellation is allowed regardless of subdivider fault if the change involves occupant health, safety, or ability to make designated use of the lot
• ✓No cause of action is created for a purchaser not adversely impacted by the material change