Article 7 - 32-2195 Sale of Unsubdivided Lands +17Arizona · Real Estate · English

Before offering unsubdivided land for sale/lease, the owner or agent must notify the commissioner in writing with information including ownership/principals (10%+ interest), agent, legal description, title condition, terms, use, permanent access provisions, water availability, utilities, indebtedness, open range/livestock status, and parent corporation involvement over the past five years.

• ✓Written notice to commissioner required before offering unsubdivided land
• ✓Notice must disclose water availability and permanent access provisions
• ✓Notice must state whether land is in open range where livestock may roam
• ✓Principal means any person/entity with 10%+ financial or beneficial interest

If a salesperson or broker files a timely and administratively complete renewal (or new license for continuing activity), the existing license does not expire until the application is finally determined, and if denied or limited, until the last day to seek review or a later court-fixed date.

• ✓Timely complete renewal keeps existing license effective until final determination
• ✓If denied/limited, license continues until last day to seek review

A renewal application must include any changes to licensing info, whether the renewal is late, the applicant's signature attesting truthfulness, and a completed disciplinary actions disclosure form. To renew as a designated broker, a signed Broker Supervision & Control Audit Declaration must be filed no earlier than 90 days before license expiration.

• ✓Renewal requires disciplinary actions disclosure form for undisclosed matters
• ✓Designated broker renewal requires Broker Supervision & Control Audit Declaration
• ✓Declaration submitted no earlier than 90 days before license expiration

Notice of appeal must be served on the agency and all parties. Appellees must file appearances within a set time, and the office of administrative hearings is generally not a named party.

• ✓A copy of the notice of appeal must be served under Rule 4 of the rules of civil procedure on the agency at its principal office and on all other parties
• ✓Within twenty days after service of the notice of appeal, the appellee agency and other appellees must file a notice of appearance
• ✓The office of administrative hearings is not a party of record and is not to be named as a party unless otherwise required by law or court order

Each employing broker must keep records of all real estate, cemetery, timeshare, and membership camping transactions and employment records including earnest money receipts, closing statements, and sales contracts. Records must be open for inspection and kept at least five years after transaction/employment termination at the principal/branch office or notified in-state off-site storage.

• ✓Broker must keep transaction and employment records for at least five years after termination
• ✓Records must be open at all reasonable times for inspection by the commissioner

A broker may not grant trust fund account withdrawal authority to a non-licensee (except under section 32-2174). A broker must state the type of earnest money in the contract/lease/receipt, and all licensees must promptly place received payments in the care of the designated broker.

• ✓Trust account withdrawal authority limited to licensees under the broker (except section 32-2174)
• ✓Broker must state the type of earnest money received in the contract, lease, or receipt
• ✓Licensees must promptly deliver received monies to the designated broker

The designated broker must review each listing agreement, purchase or nonresidential lease agreement within ten business days after execution by placing initials and date on the same page as the signatures. This may be delegated in writing to an employed associate broker.

• ✓Designated broker must review and initial/date instruments within 10 business days of execution
• ✓Review may be delegated in writing to an employed associate broker

A broker must retain an original or copy of any rejected offer to purchase real property for at least one year. In instances resulting in binding contracts, prior rejected offers must be retained for at least five years.

• ✓Rejected offers retained for at least one year
• ✓Prior rejected offers retained at least five years when a binding contract results

Each employing broker must keep records of all transactions and employment records (earnest money receipts, closing statements, sales contracts, employment agreements) for at least five years after termination of the transaction or employment. Records must be open for inspection and kept in the principal/branch office or a noticed in-state off-site location.

• ✓Transaction and employment records must be kept for at least five years after termination
• ✓Records must be open at all reasonable times for inspection by the commissioner
• ✓Records kept in principal/branch office or a noticed in-state off-site storage location

Except under 32-2174(C), a broker may not grant any person authority to withdraw monies from the broker's trust fund account unless that person is a licensee under that broker's license.

• ✓Only a licensee under the broker's license may be granted trust fund withdrawal authority
• ✓Exception applies only as provided by section 32-2174, subsection C

A broker must specifically state the type of earnest money received (cash, check, promissory note, or other item of value) in the contract, lease, or receipt. All licensees must promptly place received cash, checks, or items of value in the care of the designated broker.

• ✓Broker must state the type of earnest money received in the contract, lease, or receipt
• ✓Licensees must promptly place received payments in the care of the designated broker

The designated broker must review each listing agreement, purchase, or nonresidential lease agreement within ten business days after execution by initialing and dating it on the signature page. The designated broker may authorize an employed associate broker in writing to review and initial on their behalf.

• ✓Designated broker must review and initial instruments within ten business days after execution
• ✓Review initials and date must be placed on the same page as the parties' signatures
• ✓Designated broker may authorize an employed associate broker in writing to perform reviews

A broker must retain rejected offers to purchase real property for at least one year; when the offer results in a binding contract, prior rejected offers must be retained for at least five years.

• ✓Rejected offers must be retained as a matter of record for at least one year
• ✓Prior rejected offers in transactions resulting in binding contracts must be retained for at least five years

All property management accounts must be designated as trust accounts on the broker's records. A broker's trust account is required for all owner monies unless the owner directs deposit directly into the owner's account (to which the broker has no access). Trust accounts may be interest bearing.

• ✓All property management accounts must be designated as trust accounts on broker's records
• ✓Broker's trust account required for all owner monies unless owner directs direct deposit
• ✓Broker shall not have access to the owner's direct account

Within three banking days after receiving monies not subject to dispute or contingency, the firm must deposit them into the owner's direct account or the trust account. Each rental agreement executed by a property manager must include a provision clearly stating disposition of tenant deposits.

• ✓Monies not in dispute must be deposited within 3 banking days
• ✓Each rental agreement must clearly state disposition of tenant deposits

The designated broker may authorize a licensee or an unlicensed natural person in direct employ to transfer monies or be a signatory. An unlicensed signatory must be a bona fide officer, member, principal, or employee. Designating a signatory does not lessen the broker's responsibility or liability.

• ✓Unlicensed signatory must be a bona fide officer, member, principal, or employee
• ✓Delegating signatory authority does not lessen broker's responsibility/liability

The department holds or contracts for at least one state licensing examination each week. Exams are not returned; applicants are notified in person as 'passed' or 'did not pass' with scores for those who fail. Passing does not waive the commissioner's right to deny a license if grounds exist under A.R.S. 32-2153.

• ✓At least one state licensing examination is held each week
• ✓Passing the exam does not waive the commissioner's right to deny a license if grounds exist

Schools offering licensure courses must hold a Certificate of School Approval and a Certificate of Course Approval per course (community colleges/universities exempted). Third-party recorded material cannot exceed 20 percent of instructional time. Schools must maintain student records for five years and disclose refund policy and job placement info in bold enrollment agreements.

• ✓Schools must possess Certificates of School Approval and Course Approval for each course
• ✓Third-party recorded material may not exceed 20 percent of instructional time
• ✓Student records must be maintained for five years

School owners, operators, directors, and instructors must give written notice within 10 days of name/address/closing changes, within 30 days of entity structure changes, and must obtain commissioner approval before changing business name, location, course content, course length, or offering a new course.

• ✓Notice within 10 days of name/address changes or school closing; within 30 days of entity structure changes
• ✓Commissioner approval required before changing business name, location, course content/length, or offering a new course

Rules R4-28-A1201 through R4-28-A1223 set out the application requirements for a public report, certificate of authority, or special order of exemption, including development name, map, land characteristics, utilities, water supply, sewage disposal, streets, access, and required affidavit.

• ✓Applications must fully describe the development, utilities, water, sewage, and access
• ✓Water supply and sewage disposal adequacy must be documented (R4-28-A1205, R4-28-A1206)
• ✓An affidavit affirming the truth of the application is required (R4-28-A1223)

Rules R4-28-B1202 through R4-28-B1211 cover conditional sales exemption, material change and public report amendments, cemetery notice, subsequent owner, public report correction, options, blanket encumbrances, releases, earnest money, and recordkeeping.

• ✓Material changes require public report amendment (R4-28-B1203)
• ✓Earnest money handling for developments is regulated (R4-28-B1210)
• ✓Development records must be maintained per R4-28-B1211

After examining a campground, the commissioner (absent grounds for denial) issues a public report authorizing sale. The report must be reproduced and given to each purchaser with a receipt taken, and issuance is not an endorsement.

• ✓The operator must furnish each purchaser a copy of the report and take a receipt
• ✓The owner and licensed broker must each retain the receipt for at least five years
• ✓Issuance is not an endorsement; representing it as such is unlawful

Certain transactions are exempt from section 32-2198, including limited single-contract transfers, government sales, and resale transfers by an operator to a non-original owner. The commissioner may grant special-order exemptions.

• ✓An offer/sale/transfer of not more than one contract per 12-month period by a person is exempt (but a repeat agent receiving commission is not exempt from salesperson registration)
• ✓Government/subdivision sales and operator resale transfers to a non-original owner are exempt
• ✓The commissioner may grant special-order exemptions upon a satisfactory showing

The court hears review with convenient speed and may hold an evidentiary hearing. For agencies regulating professions/occupations under Title 32, trial is de novo if demanded. The court decides all questions of law and fact without deference to the agency.

• ✓For agencies regulating a profession/occupation under Title 32, trial shall be de novo if demanded in the notice of appeal or motion of a non-agency appellee
• ✓The court shall affirm the agency action unless it is contrary to law, not supported by substantial evidence, arbitrary and capricious, or an abuse of discretion
• ✓In proceedings by or against a regulated party, the court decides all questions of law and fact without deference to the agency's prior determination

All real estate employment agreements must be in clear language, fully set forth all material terms including compensation, have a definite duration/expiration date with inception and expiration dates, and be signed by all parties. An employment agreement is not required for a licensee to represent a party.

• ✓Employment agreements must have a definite duration or expiration date and be signed by all parties
• ✓A real estate employment agreement is not required for a licensee to represent a party

An employing broker may not assign an employment agreement to another broker without express written consent of all parties. A licensee may not procure an agreement from a party already under an existing exclusive agreement unless the party has acknowledged in writing potential liability for additional commissions.

• ✓Assignment of employment agreements requires express written consent of all parties
• ✓Procuring an agreement from a party already under an exclusive agreement requires written acknowledgment of additional commission liability

All real estate employment agreements must be in clear, unambiguous language, fully set forth all material terms including broker compensation, have a definite duration/expiration date showing inception and expiration, and be signed by all parties.

• ✓Must fully set forth all material terms including broker compensation
• ✓Must have a definite duration or expiration date showing inception and expiration dates
• ✓Must be signed by all parties to the agreement

An employing broker may not assign an employment agreement without express written consent of all parties. A licensee may not procure an agreement from a party already under an exclusive agreement without written acknowledgment that additional agreements could expose the party to substantial additional commissions. An employment agreement is not required to represent a party.

• ✓No assignment of an employment agreement without express written consent of all parties
• ✓Cannot procure an agreement from a party under an exclusive agreement without written acknowledgment of potential additional commission liability
• ✓A real estate employment agreement is not required for a licensee to represent a party

A licensee cannot advertise property implying no broker is involved. When advertising their own property, licensees must place 'owner/agent' in the ad. All advertising must be accurate, non-misleading, and identify the employing broker's legal or dba name clearly and prominently. The designated broker is responsible for all advertising.

• ✓Licensees advertising their own property must include the words 'owner/agent'
• ✓All advertising must clearly and prominently identify the employing broker's legal or dba name
• ✓The designated broker is responsible for the advertising of all real estate activity

A licensee shall not use the term 'acre' unless referring to at least 43,560 square feet. Before placing a sign, the licensee must secure written owner consent and promptly remove it upon request. Electronic media targeting Arizona residents is advertising; online ads must satisfy all requirements without the need to scroll.

• ✓The term 'acre' may only be used for an area of at least 43,560 square feet
• ✓Written owner consent is required before placing a sign; remove promptly upon request
• ✓Online advertising must satisfy all advertising requirements without the need to scroll

Residential rental agreements and related documents must be kept one year after expiration (or given to owner at termination). Finder fee records must be kept three years. All financial records pertaining to clients must be kept at least three years from execution date (including bank statements, canceled checks, deposit slips, journals, ledgers, invoices).

• ✓Residential rental agreements kept 1 year after expiration or until given to owner
• ✓Finder fee records kept 3 years after payment
• ✓Client financial records kept at least 3 years from execution date

Only the designated broker or authorized licensee may sign nonresidential rental agreements; delegation of authority must be in writing in the broker's employee file. Fully executed residential leases need not be reviewed and initialed. Property management agreements must be numbered/filed in an orderly, accessible system.

• ✓Only designated broker or authorized licensee may sign nonresidential rental agreements
• ✓Delegation of signing authority must be in writing in the employee file
• ✓Fully executed residential leases are not required to be reviewed and initialed

Records must be kept at the broker's main/branch office, electronically, or at an in-state off-site storage location (with prior written notice and address to the department). On request for routine audits, the broker must make records available within a reasonable time; the department limits routine audits to business-related areas material to the audit, but this does not limit audits when a violation is suspected.

• ✓Records kept at main/branch office, electronically, or in-state off-site storage with prior written notice
• ✓Broker must make records available within reasonable time for routine audits
• ✓Audit scope not limited when a violation is suspected

A membership camping contract may be cancelled without reason within a set period after signing and receiving a copy. Resident and nonresident purchasers have different cancellation windows, and all monies must be refunded within 30 days.

• ✓A resident purchaser may cancel before midnight of the third business day after signing and receiving a copy
• ✓A nonresident purchaser may cancel before midnight of the seventh calendar day
• ✓All monies must be refunded within 30 days of receipt of the cancellation notice, and debt/security instruments returned within 30 days
• ✓The contract must contain a conspicuous notice of the cancellation right in at least 10-point bold-faced type

The commissioner may examine any membership campground project offered or sold in Arizona pursuant to an investigation or application, and may make findings public. The owner bears the department's examination expenses.

• ✓The commissioner may examine any project and make findings public
• ✓The project owner must bear the department's actual travel and subsistence examination costs

Rules R4-28-1302 through R4-28-1313 govern service of pleadings, information obtained in investigations, response and default, notice of representation and appearance, rehearing or review of decisions, and correction of clerical mistakes.

• ✓Pleadings must be properly served after complaint and notice (R4-28-1302)
• ✓Failure to respond may result in default (R4-28-1304)
• ✓A party may request rehearing or review of a decision (R4-28-1310)

The superior court has broad powers on review including staying decisions, modifying or reversing them, and remanding. Costs may be awarded to the appellee agency, and further appeal to the supreme court is available.

• ✓The court may stay the decision for good cause, modify/affirm/reverse in whole or part, remand for additional evidence, and enter money judgments
• ✓Technical errors do not warrant reversal unless they affected a party's rights and resulted in injustice
• ✓Costs may be awarded to the appellee agency if judgment adverse to the appellant is rendered
• ✓The superior court's final decision may be appealed to the supreme court

Section 44-101 sets out the statute of frauds requiring certain real estate agreements to be in writing, and 44-1522 addresses unlawful (consumer fraud) practices.

• ✓Contracts for the sale of real property must be in writing to be enforceable (44-101)
• ✓Deceptive or unfair consumer practices are unlawful under 44-1522

Sections 44-501 through 44-503 (created by SB1218, Ch. 78, 2024) address exclusive agreements for residential property sales, defining terms, declaring certain long-term exclusive listing agreements unlawful and void, and prohibiting their recording.

• ✓Certain unfair long-term exclusive property engagement agreements are unlawful and void (44-502)
• ✓Recording of such agreements is prohibited (44-503)
• ✓Violations create liability for damages and enforcement remedies

Section 44-5101 addresses wholesale buyers and wholesale sellers, requiring disclosure and declaring certain undisclosed practices unlawful in residential property wholesaling.

• ✓Wholesale buyers and sellers of residential property must make required disclosures
• ✓Failure to disclose wholesale intent is an unlawful practice
• ✓Definitions govern who qualifies as a wholesale buyer or seller

A licensee cannot describe a premium as an 'award' or 'prize.' Terms, costs, conditions, restrictions, and expiration of a premium must be disclosed in writing before participation. Selling an interest by lottery, contest, drawing, or game of chance is prohibited unless provided by law. Subdividers, time-share developers, and membership camping operators may apply for approval.

• ✓A premium may not be described as an 'award' or 'prize'
• ✓Premium terms, costs, conditions, restrictions, and expiration must be disclosed in writing before participation
• ✓Selling an interest by lottery/contest/drawing is prohibited unless approved and provided by law

Developers must disclose that only reservations/conditional sales occur until the public report issues. Advertising must include the development's registered name and cannot advertise restricted payment terms without disclosure. Proposed/incomplete improvements require prominent 'proposed only' disclosure or evidence completion is assured. Pictorial depictions require disclosure of their nature.

• ✓Developers must disclose that only reservations or conditional sales are taken until the public report issues
• ✓Proposed improvements require a prominent 'proposed only, no warranty' disclosure or assured completion evidence
• ✓Pictorial/illustrative depictions (including AI designs) must disclose their nature and identify proposed improvements

Developers cannot imply exclusive use of facilities where public access exists, and must disclose when private club/facility use is at the pleasure of the facility owners. Bodies of water require disclosure of average surface area and non-permanence. Incentives to visit sales presentations require prior written disclosure of all conditions and qualifications.

• ✓Bodies of water advertised as features require disclosure of average surface area and any non-permanence
• ✓Incentives to visit a sales presentation require written disclosure of all conditions and qualifications beforehand

Notwithstanding 32-2155, 32-2163, and 32-2165, a property management firm or property owner may pay a finder fee to an unlicensed tenant of an apartment complex it manages/owns, and may authorize a residential leasing agent/manager to deliver (but not receive) such a fee. The finder fee must be a credit toward or reduction in the tenant's monthly rent; a tenant may receive multiple finder fees.

• ✓Finder fee may be paid to an unlicensed tenant in an apartment complex managed/owned by the payer
• ✓Residential leasing agent/manager may deliver but not receive a finder fee
• ✓Finder fee must be a credit toward or reduction in the tenant's monthly rent

A tenant receiving a finder fee must limit activity to referring prospective lessees and shall not show a unit, discuss leasing terms/conditions, or participate in lease negotiation. Unlicensed persons cannot advertise or promote finder services. Violations by a licensee may result in suspension, revocation, or civil penalty under 32-2153.

• ✓Tenant may only refer prospective lessees, not show units or discuss/negotiate lease terms
• ✓Unlicensed persons cannot advertise or promote finder services
• ✓Finder fee = fee for introducing/arranging introduction between parties to an apartment rental