32-2187 Payments to Recovery Fund +21Arizona · Real Estate · English

Payments to the fund are required on application: $20 for an original broker's license and $10 for an original salesperson's license. If the fund balance is under $600,000 on June 30, brokers pay an additional $20 and salespersons an additional $10 at renewal for the following license year.

• ✓Original broker license contributes $20; salesperson $10 to the fund
• ✓If fund below $600,000 on June 30, brokers pay extra $20 and salespersons extra $10 at renewal
• ✓Contributions are in addition to other fees

If a licensee makes a timely and administratively complete renewal or new license application for continuing activity, the existing license does not expire until the application is finally determined and, if denied/limited, until the last day to seek review of the commissioner's order.

• ✓A timely and administratively complete renewal keeps the existing license from expiring until final determination
• ✓If denied or limited, the license continues until the deadline to seek review

Renewal applications require licensing corrections, whether it is late, applicant signature attesting truthfulness, and a completed disciplinary actions disclosure form. A designated broker renewing must submit a signed Broker Supervision & Control Audit Declaration (no earlier than 90 days before expiration) identifying all property management and trust accounts.

• ✓Renewal requires a completed disciplinary actions disclosure form for undisclosed judgments/convictions
• ✓A DB renewal requires the Broker Supervision & Control Audit Declaration, filed no earlier than 90 days before expiration

Reinstatement applicants (under A.R.S. 32-2131) must submit the general R4-28-301(A) info plus type/status requested, legal name/address, the suspension/cancellation/revocation status and reason, license number, and signature attesting awareness of statutory provisions. If active at time of loss, unlawful activity information is required.

• ✓Reinstatement requires disclosure of whether license was suspended, canceled, terminated, or revoked, with reason
• ✓If active at time of loss, R4-28-306 unlawful license activity information must be provided

Salespersons/brokers must notify the department in writing within 10 days of changes in personal information or qualifications. Designated brokers must notify within 10 days of employing broker qualification changes; certain business changes (name, address, trust accounts, branch closures) require department approval before conducting business under them.

• ✓Notify the department in writing within 10 days of changes in personal information or qualifications
• ✓An employing broker cannot conduct business under certain changed information until approved by the department

A salesperson or broker may request the department sever the license from the employing broker by providing name, license number, dated signature, and the employing broker's name. The department severs administratively and notifies the employing broker, who returns the severed license.

• ✓A licensee may request administrative severance from the employing broker with the required information
• ✓The department severs the license and notifies the employing broker, who returns the license

Rule R4-28-101 provides definitions for the administrative code, and R4-28-102 addresses document filing and computation of time. R4-28-103 sets licensing time-frames.

• ✓Definitions in R4-28-101 apply throughout the department's rules
• ✓Document filing and computation of time follow R4-28-102
• ✓Licensing time-frames are set in R4-28-103 and Table 1

Rule R4-28-103 and Table 1 establish the administrative completeness review and substantive review time-frames the department must follow when processing license applications.

• ✓The department must review applications within stated administrative completeness and substantive time-frames
• ✓Overall time-frames are set out in Table 1 (Calendar Days)
• ✓Failure to comply may trigger consequences under 41-1077

A developer subject to department jurisdiction who violates the article, a rule/order, substantially deviates from a public report, or engages in unlawful practices may be assessed a civil penalty after a hearing.

• ✓Civil penalty of at least $1,000 and not more than $5,000 per infraction, assessed after a hearing
• ✓Actions to recover penalties are brought by the attorney general in superior court where the violation occurred or where the commissioner maintains an office

Documents are considered filed on the date received by the department, except renewal applications postmarked on or before the deadline are timely. In computing time periods, the first day is excluded; the last day is included unless it is a Saturday, Sunday, or legal state holiday, in which case the period runs to the next business day.

• ✓Documents filed on date received; renewals timely if postmarked by deadline
• ✓First day of the period is excluded from computation
• ✓If last day is Saturday/Sunday/state holiday, period extends to next business day

It is unlawful for persons acting in concert to evade subdivision laws by dividing land into six or more lots using a series of owners or conveyances. Enforcement lies with either the county or the state real estate department, but not both.

• ✓It is unlawful for persons acting in concert to avoid subdivision laws by dividing a parcel into six or more lots via a series of owners or conveyances
• ✓Either the county where the division occurred or the state real estate department (under Title 32, Chapter 20) may enforce, but not both
• ✓A familial relationship alone is not sufficient to constitute unlawful acting in concert

Hearings must be held within set periods after appeals or requests, with special rules for infrequently-meeting boards and provisions for expedited hearings.

• ✓Appealable agency action hearings must be held within sixty days after the notice of appeal is filed; contested case hearings within sixty days after the agency's request
• ✓Boards meeting quarterly or less often hold hearings at the next board meeting after receiving the ALJ decision or notice of hearing, with adjustments if within thirty days of a meeting
• ✓A hearing may be advanced/delayed by party agreement or good cause, and shall be expedited on a showing of extraordinary circumstances or possible irreparable harm

The agency must serve a notice of hearing at least thirty days before, containing required details, and may hold prehearing conferences.

• ✓The notice of hearing must be served at least thirty days before and include the time/place/nature, legal authority/jurisdiction, relevant statute/rule references, and a short plain statement of the matters asserted
• ✓Prehearing conferences may clarify/limit issues, consider amendments, exchange witness/exhibit lists, obtain stipulations, schedule deadlines, and allow settlement discussion

Service of pleadings after complaint may be by personal service or mail to the last known address; mail service adds five days to response time and is complete upon mailing. Filers must also file with the Attorney General. Open audit/investigation information remains confidential; closed files (within five years) are available for review subject to redaction.

• ✓Service by mail increases response time by five days and is complete upon mailing
• ✓Any pleading or brief filed with the Department must also be filed with the Attorney General
• ✓Open audit and investigation information remains confidential
• ✓Closed audit/investigation files within five years are available for review with redaction

A response must admit, deny, or state inability to admit/deny each allegation; a statement of lack of information counts as a denial, and undenied allegations are deemed violations. Failure to respond or appear allows an Affidavit of Default. Aggrieved parties may file a motion for rehearing/review on specified grounds within statutory timeframes.

• ✓A statement of lack of information has the effect of a denial
• ✓Any allegation not denied is deemed a violation of A.R.S. § 32-2153(B)(10)
• ✓A party may file a motion to vacate a default within 15 days
• ✓Motion for rehearing may be granted for irregularity, misconduct, new evidence, or errors of law

After approval, it is unlawful to materially change the cemetery plan without first notifying the commissioner in writing. The commissioner may suspend approval pending amendment. An amendment filing fee is one-half the initial certificate fee, but not less than $250.

• ✓Material plan changes require prior written notice to the commissioner
• ✓Commissioner may suspend approval pending amendment for purchaser protection
• ✓Amendment fee is half the initial fee but not less than $250

Cemetery plots subject to liens cannot be sold, and no cemetery may be sold without provision for permanent access. All fees go to the state general fund unless otherwise prescribed. The commissioner's jurisdiction is not defeated by another agency having similar jurisdiction.

• ✓Plots subject to liens cannot be sold
• ✓No cemetery may be sold without permanent access
• ✓Non-designated cemetery brokers must disclose all fees and transfer/recordation timeframes
• ✓Commissioner jurisdiction is not denied due to another agency's similar jurisdiction

If the fund is insufficient to pay all valid claims against one licensee, the commissioner may petition for a proration proceeding to distribute funds proportionally. When the fund pays on a licensee's account, that licensee's license is automatically terminated and cannot be reissued until full repayment (plus interest) and the judgment is fully satisfied. Unpaid claims are later satisfied in filing order with 4% annual interest.

• ✓Insufficient fund triggers proration proceeding distributing funds pro rata
• ✓Payment from fund automatically terminates the licensee's license
• ✓License not reissued until full repayment plus interest and judgment satisfaction
• ✓Unpaid claims satisfied in original filing order with 4% annual interest

An action for a judgment resulting in fund payment must be started within five years of accrual. After obtaining a judgment, the claimant must file the application within two years after termination of all proceedings/appeals; the commissioner may waive this deadline in the public interest. Application must be within the section 32-2186 limits for the unpaid actual loss.

• ✓Underlying action must start within 5 years of accrual
• ✓Application filed within 2 years after termination of all proceedings/appeals
• ✓Commissioner may waive the 2-year deadline for the public interest
• ✓Delivery of application by personal service or certified mail return receipt

The claimant must document diligent collection: recording the judgment, debtor discovery under oath, writs of execution and garnishment showing insufficiency, and deducting amounts recovered from debtors, bonding/insurance/title companies, settlements, and tax benefits. Claims against salespersons/brokers must also pursue the employing broker unless proven otherwise by clear and convincing evidence.

• ✓Claimant must exhaust collection via execution and garnishment writs
• ✓Amounts recovered from debtor, insurers, and settlements must be deducted
• ✓Claimant must pursue the employing broker unless clear and convincing evidence excuses it
• ✓Claimant cannot be spouse of judgment debtor or spouse's representative

Rules R4-28-301 and R4-28-302 set out general license requirements including non-resident licenses and employing broker's license requirements including non-resident brokers.

• ✓General license requirements include qualification, application, and examination (R4-28-301)
• ✓Non-resident licensees and brokers have specific requirements
• ✓An employing broker must properly designate and supervise licensees (R4-28-302)

Rule R4-28-303 governs license renewal, reinstatement, changes of personal information, license or license status, professional corporation or PLLC licensure, and administrative severance.

• ✓Licensees must timely renew and report changes to personal or license information
• ✓Professional corporations and PLLCs have specific licensure requirements
• ✓Administrative severance addresses separation of a salesperson from an employing broker

Rules R4-28-304 through R4-28-307 cover branch offices and branch office managers, temporary licenses and certificates of convenience, unlawful license activity, and inactive licenses.

• ✓Each branch office requires a manager and separate licensing (R4-28-304)
• ✓Unlawful license activity is prohibited (R4-28-306)
• ✓A licensee may place a license on inactive status (R4-28-307)

Developers must file advertising material with the commissioner within ten days of request. Advertising cannot contain untrue statements, claims of no risk, or misrepresent proposed improvements or nonexistent scenes.

• ✓Advertising material must be filed within ten days after a request by the commissioner
• ✓The commissioner must approve or deny within fifteen days of receiving all documents
• ✓Advertising cannot claim interests are offered without risk or that loss is impossible

Telemarketing/promotional employees soliciting initial interest do not need a real estate license, but those soliciting actual purchase must be employed and supervised by a licensed broker. Unlicensed employees cannot discuss transaction details.

• ✓Employees limited to soliciting initial interest, scheduling, or handing out literature need not hold a real estate license
• ✓Unlicensed employees cannot discuss transaction details, terms, discounts, price, or financing
• ✓Compensation of unlicensed employees cannot be based on completion of a timeshare transaction

Premiums may be given to attendees, but no one can be required to attend a tour/presentation longer than 120 minutes. Drawings/contests are allowed only under specified conditions including a current public report and no participation fees.

• ✓No person may be required to attend a presentation/tour longer than 120 minutes to receive a premium
• ✓Drawings/contests require a current public report and no fee charged to participants
• ✓Full written disclosure of premium value, conditions, and the 120-minute limit must be provided before any presentation

License applicants pay fixed amounts into the fund, and low fund balances trigger renewal surcharges.

• ✓Original broker's license pays $20 and original salesperson's license pays $10 into the fund
• ✓If the fund balance is below $600,000 on June 30, brokers pay an extra $20 and salespersons an extra $10 at renewal the following year

Actions leading to fund payment have a limitation period, and alternative service is permitted with limited enforceability.

• ✓An action leading to an order for payment must be started no later than five years from accrual of the cause of action
• ✓If the licensee cannot be personally served in-state, alternative service (including publication) is allowed; such a judgment is enforceable only against the fund
• ✓The department may intervene in and defend any such action

An aggrieved person must apply after obtaining a judgment, within a deadline, with detailed documentation and good-faith prosecution statements.

• ✓Application must be filed within two years after termination of all proceedings, reviews, and appeals; commissioner may waive in the public interest
• ✓Delivery must be by personal service or certified mail, return receipt requested, and use the department's application form
• ✓The claimant must show diligent collection efforts (execution, garnishment, judgment debtor discovery) and deduct all amounts recovered or anticipated

Claims based on a salesperson/broker judgment are denied unless the employing broker's assets were also pursued, absent limited exceptions.

• ✓If no judgment obtained against or diligent pursuit of the employing broker's assets, the claim is denied for failure to pursue all liable persons
• ✓Exceptions require clear and convincing evidence that the licensee was not employed by a broker, or the broker acted outside the scope of employment
• ✓The claimant must not have a spousal relationship with the judgment debtor and must have complied with all article requirements

Only a corporation or LLC duly organized for cemetery business may transact cemetery business. Undeveloped cemetery property must begin development for a section or building within five years of the first plot sale. A certificate of authority application is required before conducting cemetery business.

• ✓Only a corporation or LLC may transact cemetery business
• ✓Development must commence within five years of the first plot sale
• ✓A certificate of authority application must be filed before conducting business
• ✓Commissioner investigates status, financing, and applicant character before granting

Cemeteries must survey and subdivide property into sections/plots with a substantial map or plat and file it with the county recorder along with a written declaration of dedication to cemetery purposes exclusively. Dedication to cemetery purposes is not invalid under laws against perpetuities.

• ✓Land must be surveyed and subdivided with a substantial recorded map or plat
• ✓A written declaration of dedication to cemetery purposes must be recorded
• ✓Cemetery dedication is expressly permitted despite laws against perpetuities
• ✓Cemeteries may adopt and enforce posted rules not contrary to law

Notwithstanding other chapter provisions, a developer or managing entity may pay a finder fee to an unlicensed person who owns a timeshare interest in that plan and refers a prospective purchaser.

• ✓A finder fee may not exceed $1,000 in credit or nonmonetary compensation during any 12-month period
• ✓The person must own a timeshare interest and provide the name/address of a prospect; they may not advertise or promote their referral services
• ✓Records of all finder fees must be kept for three years after payment

The department must issue or deny a license within the overall time-frame (total of administrative completeness review plus substantive review) listed in Table 1 after receiving a complete application.

• ✓Overall time-frame = administrative completeness review + substantive review
• ✓Time-frames begin after receipt of a complete application

The department must notify applicants in writing of deficiencies within the completeness review time-frame; failure to notify makes the application complete. Applicants supply missing info within the response period, which suspends the time-frame. Failure to complete results in file closure unless one 30-day extension is granted; applicants with closed files may reapply.

• ✓No deficiency notice within time-frame means application is deemed complete
• ✓Time-frame suspended from notice date until missing info received
• ✓Department grants one 30-day extension; otherwise file is closed
• ✓Applicant with closed file may reapply with a new application

During substantive review, a comprehensive written request suspends the time-frame until info is received. Failure to respond results in denial unless one 30-day extension is requested in writing. Denials require written notice explaining the reason with statute/rule citations, appeal rights, and the appeal time period.

• ✓Comprehensive written request suspends the substantive review time-frame
• ✓Failure to provide requested info results in denial unless 30-day extension requested
• ✓Denial notice must cite supporting statutes/rules and explain appeal rights

A complete renewal filed before expiration with no changes results in renewal notice. A renewal filed after expiration, or requiring substantive review because of changes or affirmative answers to disciplinary/criminal questions, is processed as a modified or amended application.

• ✓Complete renewal before expiration with no changes = renewed
• ✓After expiration or with disciplinary/criminal affirmative answers = modified/amended processing

On request, an agency must hold an informal settlement conference within a set time, with rules protecting settlement statements from later use.

• ✓On written request filed no later than twenty days before the hearing, the agency must hold an informal settlement conference within fifteen days after receiving the request
• ✓The request does not toll the sixty-day period for holding the administrative hearing
• ✓A person with authority to act for the agency must attend, must notify the appellant that settlement statements are inadmissible in a subsequent hearing, and parties waive objection to that representative participating in the final decision

Parties have rights to counsel, to present and cross-examine evidence, and hearings must be recorded; ALJs control the process and may issue subpoenas.

• ✓A party may file a nonperemptory motion to disqualify an ALJ for bias, prejudice, personal interest, or lack of technical expertise; parties have the right to counsel, to submit evidence, and to cross-examine witnesses
• ✓The ALJ may issue subpoenas, administer oaths, and may exclude relevant evidence when its 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 the transcript costs; hearings may be informal and need not follow judicial rules of evidence

The commissioner may issue a temporary broker license to wind up an existing broker's business for a deceased or disabled broker's surviving spouse, next of kin, representative, guardian, or employee. Each temporary license lasts up to 90 days (up to 15 months for a personal representative disposing of the business), with only one per individual per year.

• ✓Temporary broker license limited to 90 days (up to 15 months for personal representative)
• ✓No more than one temporary license per individual within any one-year period
• ✓A temporary licensee has the same powers and obligations as a permanent license

The commissioner may issue a temporary cemetery salesperson license (up to 90 days, one only) or a one-time 30-day membership camping salesperson certificate of convenience, without examination, with employing broker affidavit certifying training in applicable law.

• ✓Temporary cemetery salesperson license up to 90 days, one per applicant, no exam
• ✓Membership camping certificate of convenience is a one-time 30-day certificate without exam

An action to review a final administrative decision is commenced by filing a notice of appeal within 35 days after the decision is served. Jurisdiction is vested in the superior court. For professions regulated under Title 32, trial shall be de novo if demanded. The court decides all questions of law and fact without deference to the agency.

• ✓Notice of appeal must be filed within 35 days of decision service
• ✓Jurisdiction to review final administrative decisions is vested in the superior court
• ✓For Title 32 professions, trial is de novo if demanded in the notice of appeal
• ✓Court decides all questions of law and fact without deference to the agency

The commissioner may issue a temporary broker license to wind up a licensed broker's business to a surviving spouse/next of kin/administrator (deceased broker) or spouse/next of kin/employee/guardian/conservator (disabled broker). Terms are limited and only one may be issued per individual within a year.

• ✓Temporary license limited to 90 days, extendable up to 15 months only for a personal representative disposing of a deceased broker's business
• ✓No more than one temporary license may be issued to/regarding the same individual within any one-year period
• ✓A temporary licensee has the same powers and obligations as a permanent licensee

It is unlawful for a licensed broker or salesperson to assist a subdivider or its agent in the offer, sale, or lease of a subdivision lot in violation of the chapter or a rule/order if the licensee knew or should have known of the violation.

• ✓Cannot assist in illegal subdivision lot offer/sale/lease
• ✓Applies when licensee knew or should have known of the violation

This section defines 'administrative agency' and 'administrative decision' for purposes of judicial review of administrative decisions, including exclusions.

• ✓'Administrative agency' means any agency, board, commission, department, or officer authorized to exercise rule-making or adjudicate contested cases; it excludes judicial/legislative departments and political subdivisions
• ✓'Administrative decision' means any decision, order, or determination rendered in a case affecting legal rights, duties, or privileges that terminates the proceeding
• ✓A decision is not final as to a party applying for rehearing/review until the rehearing/review is denied or the decision on it is rendered