32-2197.08. Amended Public Report; Administrative Completeness +13Arizona · Real Estate · English

Grounds for denial, suspension, or revocation must be set forth in writing at the time of the action. Grounds include failure to comply with the article/rules, sale/lease constituting misrepresentation/fraud, inability to demonstrate adequate financial arrangements for completion of improvements, and certain criminal/disciplinary history of the developer or controlling persons.

• ✓Grounds must be set forth in writing at the time of denial, suspension or revocation
• ✓A felony or misdemeanor conviction involving theft, fraud, dishonesty, or real estate/timeshare business is a ground
• ✓Being enjoined, having an administrative order, adverse judgment, or violating the chapter are grounds
• ✓Applies to officers, directors, members, partners, 10%+ trust beneficiaries, and 10%+ stockholders

When a developer files an application and amended public report, the commissioner must issue a certification of administrative completeness or a denial letter within the required time period. If neither is issued within that time, the application and amended public report are deemed administratively complete by operation of law.

• ✓If the commissioner fails to issue certification or denial within the required time period, the application is deemed administratively complete
• ✓The developer may commence sales/leasing when certification is issued OR when the application is deemed administratively complete
• ✓Certification may be issued on paper or electronically

Before or after issuing a certification of administrative completeness, the department may examine any public report, timeshare plan, or applicant. If non-compliance is found, the commissioner may commence administrative action under sections 32-2154, 32-2157, or 32-2197.14. Immediate correction requires the commissioner to vacate the action.

• ✓The department may examine the report/plan/applicant before or after certification
• ✓If the developer immediately corrects the deficiency and fully complies, the commissioner shall promptly vacate any action commenced

In an active management area, the commissioner must deny a public report unless the developer has a certificate of assured water supply (with fees paid) or a written commitment of assured water service. Outside active management areas, in counties/cities that adopted adequate water supply provisions, the report must be denied unless an adequate water supply, written commitment, exemption, or prior final plat approval applies.

• ✓Within an active management area, an assured water supply certificate or written commitment is required
• ✓Outside active management areas (in adopting jurisdictions), an adequate water supply, commitment, valid exemption, or grandfathered plat approval is required
• ✓Material changes to a grandfathered plat require the director of water resources to determine materiality

In addition to providing each prospective customer a copy of the public report, the developer must provide each customer, before the close of any transaction, information identifying timeshare exchange companies currently under contract and disclosure statements regarding their use.

• ✓Developer must give each customer exchange company information before closing
• ✓Disclosures regarding use of the timeshare exchange companies must be provided

For in-state timeshare property, the commissioner may deny/suspend/revoke a public report if the timeshare property is incompatible with the existing neighborhood and would introduce a character of property or use clearly detrimental to property values in that neighborhood.

• ✓In-state property incompatible with the neighborhood is a valid ground for denial
• ✓The use must be clearly detrimental to neighborhood property values

The commissioner may authorize a developer of a timeshare plan whose accommodations are all located outside Arizona to use a current public report (or equivalent registration/disclosure document) issued by another jurisdiction. This authorization does not exempt the developer from other applicable requirements of the article.

• ✓Applies only when all accommodations are located outside Arizona
• ✓Authorization does not constitute an exemption from other article requirements

A purchaser may cancel a membership camping contract by sending signed and dated written notice by certified mail (return receipt requested) or by personally delivering the signed notice to the campground's name and address. Full refunds apply if cancelled within the stated time periods.

• ✓Cancellation must be in writing, signed and dated
• ✓Certified mail with return receipt requested, or personal delivery required
• ✓If last day falls on Sunday/holiday, notice is timely if given next business day
• ✓Refunds must be made within thirty days of receipt of cancellation notice

A salesperson or broker must notify the Department in writing within 10 days of any change in personal information or qualifications, including the individual's name, signature, and license number. Changes include criminal convictions, adverse judgments, disciplinary actions, recovery fund payments, personal name changes (with fee), address of record or mailing address changes, email/telephone changes, and becoming/changing licensure as a professional corporation or PLLC.

• ✓Written notice required within 10 days of any change in personal information or qualifications
• ✓Notice must include the individual's name, signature, and license number
• ✓Name change requires supporting documentation and applicable fee

A designated broker must notify the Department in writing within 10 days of any change in the employing broker's qualifications under R4-28-301, and must give notice of proposed changes to business information. An employing broker cannot conduct business under changed information described in subsections (E)(2),(3),(7),(9),(12),(13) until the Department approves the change. Notice must include the designated broker's name/signature and the employing broker's legal name.

• ✓Designated broker must notify Department within 10 days of qualification changes
• ✓Certain business changes require Department approval before conducting business under the new information
• ✓Changes include legal name, dba name, address of record, phone/email, branch managers, branch closures, hiring, trust accounts, and temporary brokers

Any person applying for license renewal after the expiration date must, in addition to standard renewal information, specify whether they conducted unlawful license activities as described in R4-28-306. This disclosure is mandatory to identify any activity performed while the license was lapsed.

• ✓Late renewal applicants must disclose unlawful license activity per R4-28-306
• ✓Late renewal requires all standard renewal information plus the unlawful activity disclosure

A salesperson or broker applying for reinstatement under A.R.S. § 32-2131 must submit the Application For Reinstatement form containing: type of license/status requested, legal name/business address/phone, whether the license was suspended/canceled/terminated/revoked (with date and reason), the license number, mailing address if different, employing broker information, employer's trade/dba name, application date, and a signature attesting awareness of A.R.S. §§ 32-2131, 32-2153, and 32-2160.01. If the license was active at time of suspension/cancellation/revocation/termination, the applicant must also provide information required under R4-28-306.

• ✓Reinstatement uses the Application For Reinstatement form with all required disclosures
• ✓Applicant must attest awareness of A.R.S. §§ 32-2131, 32-2153, and 32-2160.01
• ✓If license was active at time of adverse action, R4-28-306 information is also required

When opening or closing a broker's trust account, the designated broker must provide written notice stating the name of the account, the account number, and the name and address of the bank where the account is located. If relocating or changing the name of a trust account, information for both the previous and new accounts must be included.

• ✓Trust account open/close notice must include account name, account number, and bank name/address
• ✓Relocating or renaming a trust account requires information for both previous and new accounts

To license a salesperson or broker as a professional corporation or PLLC (or to add/remove members or change the name), the applicant must submit name, signature, license number, employing broker's office license number, and the change fee. For a PC: name must include full/last name of each officer/director/shareholder as it appears in Articles of Incorporation, business addresses, proof each holds active real estate license, a copy of the amended Articles filed with the Arizona Corporation Commission, and evidence membership is limited to the designated broker if applicant is a designated broker. For a PLLC: similar requirements plus a copy of the operating agreement as amended.

• ✓PC/PLLC membership must be limited to the designated broker if the applicant is a designated broker
• ✓Each officer/director/shareholder/member must hold a current and active real estate license
• ✓Articles must be filed with the Arizona Corporation Commission; PLLCs also require the operating agreement

A salesperson or broker may request the Department sever their license from the employing broker by providing the name, license number, and dated signature of the person seeking severance and the name of the employing broker. Upon receipt, the Department administratively severs the license and gives written notice to the employing broker, who must return the severed license under subsection (E)(10).

• ✓Severance request requires name, license number, dated signature, and employing broker name
• ✓Department notifies the employing broker who must return the severed license

When earnest money, down payments, or advanced money is paid directly to the seller and NOT placed in neutral escrow, the contract must conspicuously disclose this fact. The purchaser must sign or initial the disclosure adjacent to or directly below it. Required statutory bold-print language must appear in the public report, purchase contract, and agreement of sale.

• ✓The disclosure must be conspicuously included and the purchaser must sign or initial it in the adjacent/below space
• ✓Required bold-print language warns that deposits will NOT be placed in neutral escrow, will be paid directly to the seller and may be used by the seller, and the purchaser assumes the risk of losing the money if the seller cannot or will not perform
• ✓The disclosure must appear in the public report, purchase contract, and agreement of sale

Contracts must state where earnest money or down payments will be deposited. The contract must identify the specific depository holding the funds so purchasers know where their money is going.

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

A developer who becomes a successor in interest to multiple lots, parcels, or time-share intervals in a development for which the Department previously issued a public report must file for and obtain a new public report before offering or selling. Thresholds vary by development type.

• ✓A successor to six or more parcels in an unsubdivided land development must obtain a new public report before offering or selling any parcel
• ✓A successor to 12 or more time-share intervals must obtain a new public report before offering or selling any interval
• ✓A successor to lots in a subdivision must obtain a new public report before offering or selling any lot

The Department will not issue a new public report to a subsequent owner if the previous developer failed to complete proposed improvements by estimated completion dates, until the subsequent owner satisfies one of four financial assurance conditions.

• ✓Subsequent owner may make financial arrangements per R4-28-A1211 in favor of local government for benefit of purchasers
• ✓Subsequent owner may place all sales funds in neutral escrow until improvements are completed or accepted
• ✓All previous purchasers may grant permission for completion by a new designated date
• ✓Subsequent owner may establish to Department satisfaction that adequate financial arrangements assure completion

The Commissioner may approve an application for a subsequent ownership exemption in specified circumstances involving foreclosure sales by financial institutions or situations where compliance is not essential to public interest, provided the prior report was approved within ten years and there are no material changes.

• ✓Exemption allowed for lots/parcels/fractional interests owned by a licensed financial institution as a result of foreclosure, sold by or on behalf of the institution, if included in a public report approved within the last ten years with no material changes
• ✓Exemption allowed where compliance is not essential to the public interest if included in a previous report approved within the last ten years and applicant attests there are no material changes

The burden of persuasion depends on the type of action. Applicants bear it in license denial hearings; agencies bear it when acting to suspend, revoke, terminate, modify, or impose fees/penalties/compliance orders.

• ✓Applicant has burden of persuasion in a license/permit denial hearing
• ✓Agency has burden of persuasion when suspending, revoking, terminating or modifying a license
• ✓Agency has burden of persuasion for imposing fees, penalties or compliance orders
• ✓Appellant/claimant has burden in chapter 23 or 24 hearings

In administrative hearings, copies of documentary evidence may be received at the ALJ's discretion, and parties may compare copies with originals on request. The ALJ may take notice of judicially cognizable facts and generally recognized technical or scientific facts within the agency's specialized knowledge, with parties given opportunity to contest noticed material.

• ✓Copies of documentary evidence may be received at the administrative law judge's discretion
• ✓Parties must be given opportunity to compare copies with originals on request
• ✓Notice may be taken of judicially cognizable facts and technical/scientific facts within agency knowledge
• ✓Parties must be notified and afforded opportunity to contest noticed material

An agency-issued license that substantially complied with applicable licensing requirements establishes a prima facie demonstration that the license meets all state and federal legal/technical requirements and would protect public health, welfare and environment. An adversely affected party may rebut with clear and convincing evidence that a provision violates a specifically applicable requirement.

• ✓Substantial compliance establishes prima facie demonstration the license meets requirements
• ✓Rebuttal requires clear and convincing evidence of a specific requirement violation
• ✓If rebutted, the applicant/licensee and agency director may present additional supporting evidence

Informal disposition may be made by stipulation, agreed settlement, consent order or default. 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.

• ✓Findings of fact must be based exclusively on evidence and officially noticed matters
• ✓Final decisions must contain findings of fact and conclusions of law, separately stated
• ✓Findings in statutory language must be accompanied by explicit underlying facts
• ✓Conclusions of law must address agency authority consistent with section 41-1030

On application and for use as evidence, the ALJ may permit a deposition of a witness who cannot be subpoenaed or is unable to attend. The ALJ may order subpoenas for documents if the party shows reasonable need. Discovery is otherwise prohibited except as provided.

• ✓ALJ may permit depositions of witnesses who cannot be subpoenaed or attend
• ✓Subpoenas for documents require demonstration of reasonable need
• ✓Witness fees are the same as for court witnesses unless otherwise provided
• ✓Subpoenas, depositions or discovery are not permitted except as provided by statute

The Arizona Constitution grants licensed real estate brokers and salespersons the right to draft, fill out and complete instruments incident to real estate transactions without charge. This constitutional protection applies only when the licensee is acting in the capacity of broker/salesperson or as agent for a party to the transaction.

• ✓A valid license from the Arizona State Real Estate Department is required to exercise this right
• ✓Licensees may draft instruments including preliminary purchase agreements, earnest money receipts, deeds, mortgages, leases, assignments, releases, contracts for sale of realty, and bills of sale
• ✓The instruments must be prepared WITHOUT charge to the parties
• ✓The right applies to sales, exchanges, trades, and renting/leasing of property

A membership camping contract cannot require execution of notes that would strip the purchaser of rights of action or defenses against the campground operator if separately negotiated. Assignment of the contract does not terminate the purchaser's defenses even if the assignee acts in good faith and for value.

• ✓A membership camping contract shall not require notes that terminate purchaser's rights or defenses against the operator
• ✓A right of action or defense is not terminated by assignment even if the assignee acquires in good faith and for value

A membership camping contract cannot require execution of notes that would terminate the customer's rights or defenses against the operator. Assignment of the contract does not terminate the customer's rights, even if the assignee acts in good faith and for value.

• ✓Contract cannot require notes that eliminate customer's rights/defenses against operator
• ✓Assignment does not terminate customer's rights of action or defense
• ✓Good faith and value acquisition by assignee does not defeat customer defenses

The Administrative Procedure Act requires agencies to include a preamble with rules. The preamble must contain specific information depending on whether the rule is proposed, expedited, final, or emergency. It includes economic/small business/consumer impact summaries, showings of good cause, and other statutorily required matters.

• ✓For proposed rules, the preamble must list all previous register notices, state time/place/nature of proceedings, and explain how persons may request an oral proceeding
• ✓For final rules (except emergency), the preamble must include a description of changes between proposed and final rules, a summary of comments and agency responses, a summary of council action, and the rule's effective date
• ✓For emergency rules, the preamble must explain the situation justifying emergency status, the date of attorney general approval, and the effective date

A 'rule' is an agency statement of general applicability that implements, interprets, or prescribes law or policy, or describes procedure or practice requirements of an agency. Understanding what qualifies as a rule is important because rules must go through formal rulemaking.

• ✓A rule includes prescribing fees or the amendment or repeal of a prior rule
• ✓A rule does NOT include intraagency memoranda that are not delegation agreements
• ✓Rulemaking means the process to make a new rule or amend, repeal, or renumber a rule

A 'small business' is a concern (including affiliates) that is independently owned and operated, not dominant in its field, and employs fewer than 100 full-time employees OR had gross annual receipts of less than $4 million in its last fiscal year.

• ✓Small business = independently owned/operated, not dominant, fewer than 100 full-time employees OR under $4 million gross annual receipts
• ✓For a specific rule, an agency may define small business to include more persons if necessary to adapt the rule to small business needs

A substantive policy statement is a written expression informing the public of an agency's current approach or opinion regarding constitutional, statutory, rule, or judgment requirements. It is advisory only.

• ✓A substantive policy statement is advisory only and does not bind
• ✓It does not include internal procedural documents that only affect internal agency procedures and impose no additional requirements/penalties
• ✓'Register' means the Arizona administrative register, the state's official publication of rulemaking notices filed with the secretary of state, published per section 41-1011

Article 26 of the Arizona Constitution grants licensed real estate brokers and salespersons the authority to draft and fill out certain legal documents incidental to real estate transactions they are handling, without engaging in the unauthorized practice of law.

• ✓Licensed brokers/salespersons may draft or complete purchase agreements, leases, and related instruments for transactions they are handling
• ✓This authority applies only to documents incidental to a transaction in which the licensee is acting as an agent
• ✓Licensees may not charge separate fees for document preparation as if practicing law

The Arizona Constitution grants licensed real estate brokers and salespersons the right to draft, fill out, and complete instruments incidental to property transactions when acting as broker/salesperson or agent for parties to a sale, exchange, trade, or rental/leasing of property. This must be done without charge.

• ✓A valid Arizona real estate license (broker or salesperson) is required to prepare such instruments
• ✓Preparation of instruments must be done without charge to the parties
• ✓The licensee must be acting in the capacity of broker/salesperson or agent for one of the parties
• ✓Instruments include preliminary purchase agreements, earnest money receipts, deeds, mortgages, leases, assignments, releases, contracts for sale of realty, and bills of sale

A 'rule' is an agency statement of general applicability that implements, interprets or prescribes law or policy, or describes the procedure/practice requirements of an agency. This determines what agency actions must go through formal rulemaking.

• ✓A rule includes prescribing fees and the amendment or repeal of a prior rule
• ✓A rule does NOT include intraagency memoranda that are not delegation agreements
• ✓'Rulemaking' is the process to make a new rule or amend, repeal, or renumber a rule

A small business is a concern (including affiliates) that is independently owned and operated, not dominant in its field, and employs fewer than 100 full-time employees OR had gross annual receipts under $4 million in its last fiscal year.

• ✓Small business = independently owned/operated, not dominant, under 100 full-time employees OR under $4 million gross annual receipts
• ✓An agency may define small business to include more persons for a specific rule if needed to adapt the rule to small business needs

A substantive policy statement informs the public of an agency's current approach to or opinion of legal requirements, including current practice/procedure. It is advisory only and does not carry the force of a rule.

• ✓A substantive policy statement is advisory only
• ✓It does NOT include internal procedural documents affecting only internal agency procedures, confidential information, or rules made under this chapter

Every rulemaking preamble must contain specified information depending on whether it is a proposed, expedited, final, or emergency rule. The base preamble includes economic/small business/consumer impact summaries, showing of good cause for statewide interest, and other statutorily prescribed matters. Additional content is layered on by rule type.

• ✓A proposed rule preamble must list all prior register notices, state the time/place/nature of proceedings, and explain how persons may request an oral proceeding
• ✓A final rule (except emergency) preamble must include changes between proposed and final rules, a summary of comments with agency responses, council action summary, and the effective date
• ✓An emergency rule preamble must explain the situation justifying emergency status, the attorney general approval date, and the effective date

The 'Register' is the Arizona administrative register, the state's official publication of rulemaking notices filed with the secretary of state, published under section 41-1011. 'Provision of law' covers constitutions, statutes, court rules, executive orders, and administrative agency rules.

• ✓The Register is published pursuant to section 41-1011
• ✓Provision of law means the whole or part of the federal/state constitution, statute, rule of court, executive order, or agency rule

A criminal justice agency is either a court at any governmental level with criminal jurisdiction, or a government agency whose principal function is administration of criminal justice pursuant to statute, ordinance, or executive order and that allocates more than fifty percent of its annual budget to criminal justice administration. Includes agencies of foreign sovereignties recognized by the federal government.

• ✓Must allocate more than 50% of annual budget to criminal justice administration to qualify as an agency
• ✓Includes courts with criminal or equivalent jurisdiction, including foreign sovereignties recognized federally

Criminal justice information is information collected by criminal justice agencies needed for their legally authorized functions, such as criminal history records, citation information, stolen property information, traffic accident reports, wanted persons information, and system network log searches. It excludes administrative records of the agency.

• ✓Includes criminal history, citations, stolen property, traffic accident reports, wanted persons info
• ✓Does NOT include administrative records of a criminal justice agency

Dissemination is the written, oral, or electronic communication or transfer of criminal justice information to individuals or agencies other than the agency maintaining it, and includes confirming the existence or nonexistence of such information. Secondary dissemination is passing along information originally obtained from the central state repository or Arizona criminal justice information system to another individual or agency.

• ✓Dissemination includes confirming existence or nonexistence of criminal justice information
• ✓Secondary dissemination is re-sharing information originally obtained from the central repository/ACJIS

Rap back services provide real-time or near real-time notifications of activity such as arrests on an individual for authorized criminal justice or noncriminal justice purposes where continuous evaluation of criminal history is required. Sexual orientation means consensual homosexuality or heterosexuality. Subject of record is the primary subject of a criminal justice record. Process control number is the AZ AFIS number attached to each arrest event at fingerprinting.

• ✓Rap back services give near real-time notifications requiring continuous criminal history evaluation
• ✓Process control number attaches to each arrest event at time of fingerprinting

A criminal justice agency is either a court with criminal jurisdiction (including foreign sovereignties recognized by the federal government) or a government agency whose principal function is the administration of criminal justice and which allocates more than fifty percent of its annual budget to that administration.

• ✓A court at any governmental level with criminal or equivalent jurisdiction qualifies as a criminal justice agency
• ✓An agency qualifies only if it allocates more than 50% of its annual budget to administration of criminal justice

Criminal justice information is data collected by criminal justice agencies needed to perform their legally authorized functions, such as criminal history records, citation information, stolen property, traffic accident reports and wanted persons information. It excludes the agency's administrative records.

• ✓Includes criminal history, citations, stolen property, traffic accident reports and wanted persons data
• ✓Does NOT include the administrative records of a criminal justice agency

Dissemination is the written, oral or electronic communication or transfer of criminal justice information to individuals/agencies other than the agency that maintains it, and includes confirming existence or nonexistence of the information. Secondary dissemination is passing along information originally obtained from the central state repository or Arizona criminal justice information system to another party.

• ✓Dissemination includes the act of confirming the existence or nonexistence of criminal justice information
• ✓Secondary dissemination is re-sharing information originally obtained from the central state repository or ACJIS

Management control is the authority to set and enforce priorities for developing/operating criminal justice information systems, standards for personnel selection/supervision/termination, and policies governing operation of computers and telecommunications used to process criminal justice information. It includes supervision of equipment, systems design, programming and operating procedures.

• ✓Includes authority to set priorities, personnel standards, and computer/telecommunications operation policies
• ✓Includes supervision of equipment, systems design, programming and operating procedures

Rap back services provide real-time or near real-time notifications of activity (such as arrests) on an individual where continuous evaluation of criminal history is required. Sexual orientation means consensual homosexuality or heterosexuality; subject of record is the primary subject of a criminal justice record; process control number is the AFIS number attached to each arrest event at fingerprinting.

• ✓Rap back services give real-time/near real-time notifications like arrests for continuous evaluation
• ✓Process control number attaches to each arrest event at the time of fingerprinting