32-2101 - Definitions +3Arizona · Real Estate · English

A broker (used without modification) is a person licensed or required to be licensed as a broker. An associate broker is a licensed broker employed by another broker who, unless specified otherwise, has the same license privileges as a salesperson.

• ✓An associate broker is a licensed broker employed by another broker
• ✓Unless otherwise specified, an associate broker has the same license privileges as a salesperson
• ✓A designated broker is a natural person licensed as broker who acts on behalf of an employing entity or as a sole proprietor

A real estate broker is a person (other than salesperson) who, for another and for compensation, sells/exchanges/purchases/rents/leases, offers, negotiates, lists, auctions, deals in options, collects rent, advertises, procures prospects, or negotiates loans incident to real estate sales, or acts as a business broker.

• ✓Broker activities must be for another and for compensation
• ✓Clerical rent collection by non-licensees is exempt if they provide receipts
• ✓Loan negotiation incident to sales is included but does not apply to mortgage brokers under title 6
• ✓Acting as a business broker constitutes real estate broker activity

A real estate salesperson is a natural person who acts on their own behalf or through a professional LLC/corporation, engaged by a licensed broker, to perform any act included in the definition of real estate broker, subject to section 32-2155.

• ✓Salesperson must be a natural person
• ✓Must be engaged by or on behalf of a licensed real estate broker
• ✓Performs acts within the broker definition subject to 32-2155

An address of record (amended 2024) may be the address where a licensee practices/is employed, the licensee's residential address, or the address of a licensee's statutory agent registered with the corporation commission. The statutory agent option applies only if notice is given to the department per section 32-2126.

• ✓Address of record can be practice address, residential address, or statutory agent address
• ✓Statutory agent address only qualifies if notice given to department per 32-2126

Advertising means attempting by publication, dissemination, exhibition, solicitation or circulation (oral, written, radio, TV) to induce any person to enter obligations or acquire interest in lands subject to this chapter. Certain communications are excluded.

• ✓Advertising includes land sales contracts and photos/drawings of property conditions
• ✓Excluded: press releases where no charge is made by news media
• ✓Excluded: communications to stockholders such as annual reports, proxy materials, registration statements, securities prospectuses, property reports, and offering statements

A common promotional plan is undertaken by persons acting in concert to offer lots for sale/lease. If land offered by persons acting in concert is contiguous or known/advertised as a common unit or name, it is presumed offered as part of a common promotional plan regardless of number of lots per offering.

• ✓Contiguous land advertised under common name presumed part of common promotional plan
• ✓Number of lots covered by each individual offering does not affect the presumption
• ✓Separate subdividers selling in separately platted subdivisions within a master planned community are NOT deemed to offer combined lots as common promotional plan

Compensation means any fee, commission, salary, monies or other valuable consideration for services rendered or to be rendered, including the promise of consideration whether contingent or not.

• ✓Compensation includes fees, commissions, salaries, monies or other valuable consideration
• ✓Includes the promise of consideration whether contingent or not

Distance learning (added 2024) is continuing or prelicensure education that is an online planned learning experience with geographic separation, may be synchronous or asynchronous, does not require real-time interaction, and uses a self-paced/prerecorded platform accessed via internet at the student's own pace.

• ✓Distance learning may be synchronous or asynchronous
• ✓Does not require real-time interaction between student and instructor
• ✓Uses self-paced or prerecorded lessons accessed via internet at student's own pace

Subdivision/subdivided lands means land divided or proposed for division for sale/lease into six or more lots, parcels or fractional interests. Includes stock cooperatives, common promotional plan lands, and residential condominiums. Excludes leaseholds of one year or less and parcels of 36+ acres.

• ✓Subdivision requires six or more lots, parcels or fractional interests
• ✓Includes stock cooperatives and residential condominiums
• ✓Excludes leasehold offerings of one year or less
• ✓Excludes parcels of 36 acres or more including centerline of dedicated roads

A subdivider is any person offering six or more lots/parcels/fractional interests in a subdivision, causing land to be subdivided, or undertaking to develop a subdivision. Does not include a public agency or officer authorized by law to create subdivisions.

• ✓Subdivider offers six or more lots/parcels/fractional interests
• ✓Excludes public agencies or officers authorized by law to create subdivisions

A license is any agency permit, certificate, approval, registration, public report, charter or similar permission required by this chapter. A license period is the two-year period from date of original issue or renewal ending on the expiration date.

• ✓License period is two years from issue or renewal to expiration
• ✓License includes permits, certificates, registrations, public reports and charters
• ✓A licensee is a person granted a license for the current license period

A corporation licensee is a lawfully organized corporation registered with the AZ corporation commission with an officer licensed as designated broker. An LLC licensee has a member/manager licensed as designated broker. A partnership licensee has a managing general partner licensed as designated broker.

• ✓Corporation licensee must have an officer licensed as designated broker per 32-2125
• ✓LLC licensee must have a natural-person member/manager as designated broker
• ✓Partnership licensee must have a managing general partner as designated broker

A cemetery broker is a person OTHER than a real estate broker/salesperson who, for another, for compensation, sells/leases/exchanges/offers/negotiates cemetery property or interment services. A cemetery salesperson acts on behalf of a licensed cemetery or real estate broker.

• ✓Cemetery broker is distinct from real estate broker/salesperson
• ✓Cemetery broker activities require acting for another, for compensation
• ✓Cemetery salesperson works through and on behalf of a licensed cemetery or real estate broker

A live classroom course is delivered in either an in-person classroom instructional format or a synchronous remote instructional format allowing students to observe and participate remotely via livestreaming.

• ✓Live classroom includes in-person classroom format
• ✓Live classroom includes synchronous remote format via livestreaming

An improved lot or parcel has a residential/commercial/industrial building, or a contract obligates the subdivider to construct such a building within two years of the sale contract, or for a condominium (per 33-1202) within four years of the sale contract.

• ✓Improved lot must have a building or a contract to build within two years
• ✓For condominiums the construction period is within four years of the sale contract

Unsubdivided lands are divided for sale/lease into six or more lots/parcels/fractional interests where parcels are 36+ acres but less than 160 acres each, or offered under a common promotional plan. Agricultural leases are excluded.

• ✓Unsubdivided lands parcels are 36 acres or more but less than 160 acres each
• ✓Requires six or more lots/parcels/fractional interests
• ✓Agricultural leases are excluded from this definition

A timeshare/timeshare property means real property ownership or right of occupancy under article 9. A timeshare is not a security unless it meets the definition of a security under section 44-1801.

• ✓Timeshare is real property ownership or right of occupancy under article 9
• ✓A timeshare is not a security unless it meets 44-1801 definition

An original real estate broker license requires at least three years as an active licensed salesperson or broker during the five years immediately preceding application. Cemetery and membership camping broker licenses require either a current real estate broker license or three years' relevant experience. Equivalent experience may substitute for licensed experience for broker applicants (non-renewal).

• ✓Original real estate broker: 3 years active licensure within the preceding 5 years
• ✓Cemetery/membership camping broker: current real estate broker license OR 3 years relevant experience
• ✓Equivalent active experience within 5 years may substitute for licensed experience

For any broker or salesperson license, applicants must not have had a license denied within one year immediately preceding application, and must not have had a license revoked within two years immediately preceding application, under section 32-2153 or a similar statute in another state.

• ✓No license denied within 1 year preceding application
• ✓No license revoked within 2 years preceding application

Salesperson applicants (other than renewal) must complete a commissioner-approved 90-classroom-hour course at a certified school and pass an examination. Courses may be live classroom or distance learning, but the exam must be proctored and completed in person. Course completion may not be more than ten years before application unless the commissioner finds equivalent work experience and education.

• ✓Salesperson course: at least 90 classroom hours at a certified school
• ✓Proctored examination must be completed in person
• ✓Course completion cannot be more than 10 years before application unless commissioner finds equivalency

Broker applicants (other than renewal) must complete a 90-classroom-hour broker course at a certified school and pass a proctored in-person examination. The same 10-year currency rule applies. The commissioner may waive prelicensure requirements (except the 27-hour Arizona-specific course) for applicants holding a current out-of-state real estate license.

• ✓Broker course: at least 90 classroom hours at a certified school
• ✓Commissioner may waive prelicensure requirements except the 27-hour Arizona-specific course for out-of-state licensees

An original real estate salesperson applicant must certify completion of six hours of instruction in real estate contract law and contract writing, including drafting contracts. The commissioner shall not issue a license to a person convicted of a felony who is incarcerated, paroled, under community supervision, or on probation for that conviction.

• ✓Original salesperson must complete 6 hours of contract law and contract writing instruction
• ✓No license to a felon currently incarcerated, paroled, under community supervision, or on probation

An original real estate broker applicant must have been an active licensed salesperson or broker for at least three years during the five years immediately preceding application. Cemetery and membership camping broker applicants need either a current real estate broker license or three years' relevant actual experience in the preceding five years.

• ✓Original real estate broker requires 3 years active licensed experience within the preceding 5 years
• ✓Cemetery/membership camping broker requires current RE broker license OR 3 years relevant experience in preceding 5 years
• ✓Equivalent active experience may substitute for licensed experience if demonstrated to commissioner's satisfaction

An applicant may not have had a license denied within one year immediately preceding application under 32-2153 or a similar statute, nor had a license revoked within the two years immediately preceding application.

• ✓No license denied within 1 year immediately preceding application
• ✓No license revoked within 2 years immediately preceding application

Salesperson and broker applicants (other than renewal applicants) must complete a commissioner-approved course of at least 90 classroom hours in a certified school and pass an examination. The proctored exam must be completed in person. Course completion may not be more than 10 years before application unless the commissioner finds equivalent work experience and education.

• ✓Salesperson and broker prelicensure courses each require at least 90 classroom hours
• ✓Proctored exam on the course must be completed in person
• ✓Course completion may not be more than 10 years before application unless commissioner finds equivalent experience
• ✓Commissioner may waive prelicensure requirement except the 27-hour Arizona-specific course for out-of-state license holders

Renewal applicants are not required to take an exam if applying within twelve months after expiration and the license was not canceled/terminated/suspended. Applicants holding at least an equivalent out-of-state license are exempt from the national portion but out-of-state applicants must pass the Arizona state-specific portion.

• ✓Renewal exam waived if applying within 12 months of expiration and license not canceled/terminated/suspended
• ✓Out-of-state equivalent license holders are exempt from the national portion of the exam
• ✓Out-of-state applicants must pass the Arizona state-specific portion of the exam

If reapplying for a license that expired more than one year before the application date, the applicant must meet all current education and experience requirements and retake the examination as if applying for the first time.

• ✓License expired more than 1 year requires meeting all current education/experience requirements
• ✓Must retake the examination as a first-time applicant

An applicant must be at least eighteen years of age before receiving any license. The commissioner ascertains real estate applicants' knowledge of English, arithmetic, real estate forms, principal-agent obligations, business ethics, and this chapter. The broker exam must be more exacting, stringent, and broader in scope than the salesperson exam.

• ✓Applicant must be at least 18 years of age before receiving a license
• ✓Broker examination must be more stringent and broader than the salesperson examination

A renewal applicant for any broker or salesperson license is not required to submit to examination if the application is made within twelve months after the license expires and the license is not canceled, terminated, or suspended at the time of application.

• ✓Renewal exam exemption applies if application made within 12 months of expiration
• ✓License must not be canceled, terminated, or suspended at time of application

The commissioner shall require an out-of-state applicant for a license issued under section 32-4302 to pass an examination specific to Arizona real estate laws before issuing the license.

• ✓Out-of-state applicants must pass an Arizona-specific law examination
• ✓Applicability tied to licenses issued pursuant to section 32-4302

Before receiving any license under this chapter, an applicant must be at least eighteen years of age.

• ✓Applicant must be at least 18 years old before receiving any license
• ✓Age requirement applies to all license types under this chapter

The commissioner ascertains by examination that a real estate applicant has appropriate English/arithmetic knowledge, understanding of real estate forms and practices, and a thorough understanding of principal-agent obligations, canons of business ethics, and the chapter/rules. The broker exam is more exacting, stringent and broader than the salesperson exam.

• ✓Applicant must demonstrate knowledge of English, arithmetic, real estate forms and principal-agent obligations
• ✓The broker's examination must be more exacting, stringent and broader than the salesperson's examination

An original real estate salesperson applicant must provide certification of completion of six hours of instruction in real estate contract law and contract writing, including participation in drafting purchase contracts, listing agreements, and lease agreements.

• ✓Original salesperson applicants must complete 6 hours of contract law and contract writing instruction
• ✓Instruction must include drafting purchase contracts, listing agreements and lease agreements

The commissioner shall not issue a license to a person convicted of a felony who is currently incarcerated, paroled, under community supervision, or on probation as a result of the conviction.

• ✓No license issued to felon currently incarcerated, paroled, or under community supervision
• ✓No license issued to felon on probation as a result of the conviction

Contracts for purchase or lease of unimproved subdivided lots or unsubdivided land must contain bold language granting the purchaser/lessee the right to rescind without cause by midnight of the seventh calendar day following execution. If the buyer did not inspect before execution, they have six months to inspect and may rescind at time of inspection.

• ✓Rescission right for unimproved lots: by midnight of the 7th calendar day after execution
• ✓Language must be in bold or larger print above the signature portion
• ✓If lot not inspected before signing, buyer has 6 months to inspect and unilaterally rescind
• ✓Buyer entitled to return of all money or consideration

Contracts for the purchase or lease of a time-share interval must contain bold language granting the right to rescind without cause by midnight of the tenth calendar day following execution of the agreement.

• ✓Time-share rescission right: by midnight of the 10th calendar day after execution
• ✓Language must be in bold or larger print above the signature portion

Contracts for purchase or lease of an unimproved subdivided lot or unsubdivided land must contain bold or larger print rescission language above the signature line. The purchaser/lessee can cancel without cause by midnight of the seventh calendar day after execution. If the lot was not inspected before execution, the purchaser has six months to inspect and may unilaterally rescind at the time of inspection.

• ✓Rescission right for unimproved subdivided lots/unsubdivided land is by midnight of the SEVENTH calendar day following execution
• ✓Language must be in bold print or print larger than other text, placed above the signature portion
• ✓If the purchaser/lessee does not inspect the lot before execution, they have six months to inspect and may unilaterally rescind at time of inspection
• ✓Rescission entitles return of any money or other consideration; no cause or reason required

Contracts for purchase or lease of a time-share interval must contain bold or larger print rescission language above the signature line. The purchaser/lessee may rescind without cause by midnight of the tenth calendar day following execution.

• ✓Time-share interval rescission right is by midnight of the TENTH calendar day following execution
• ✓Language must be in bold or larger print above the signature portion of the document

Contracts must conspicuously disclose the complete and current name, address, telephone number, and email address of the seller on the face of all agreements to allow exercise of rescission rights. Delivery of rescission notices must be in writing.

• ✓Seller's complete name, address, phone, and email must appear on the face of all contracts
• ✓Notices of rescission are deemed delivered when hand delivered, emailed, sent by courier, or certified mail
• ✓Seller must issue a receipt if the rescission notice is hand delivered

The seller/lessor's complete and current name, address, telephone number, and email address must be conspicuously disclosed on the face of all agreements to allow purchasers to exercise rescission. Notices of rescission must be delivered in writing.

• ✓Seller/lessor's complete and current name, address, telephone number, and email address must appear on the face of all agreements
• ✓Notices of rescission must be in writing and are deemed delivered/received when hand delivered, emailed, sent by courier, or sent by certified mail
• ✓Seller must issue a receipt if the notice is hand delivered

To ensure fair and open regulation by state agencies, persons are granted a series of enumerated rights covering fee reimbursement, inspection notice, rulemaking participation, licensing protections, and administrative hearing rights.

• ✓A person is eligible for reimbursement of fees/expenses if they prevail on the merits against an agency in court (section 12-348) or in an administrative hearing (section 41-1007)
• ✓An agency may not charge a fee unless the fee for the specific activity is expressly authorized (section 41-1008)
• ✓The enumeration of rights does not grant any additional rights beyond those prescribed in the referenced sections

Agencies may not base licensing decisions on conditions or requirements not specifically authorized by statute, rule, or state tribal gaming compact. Applicants are entitled to timely decisions and written justifications for denials.

• ✓An agency may not base a licensing decision on conditions/requirements not specifically authorized by statute, rule, or state tribal gaming compact (section 41-1030(B))
• ✓On denial of a license, an agency must provide written notice justifying the denial with references to statutes/rules and explaining the right to appeal (section 41-1076)
• ✓An agency must approve or deny a license application within a predetermined time frame (article 7.1)

To ensure fair and open regulation, a person has enumerated rights against state agencies, including cost recovery when prevailing and protection from unauthorized fees.

• ✓A person is eligible for reimbursement of fees/expenses if they prevail on the merits against an agency in court (section 12-348)
• ✓A person is eligible for reimbursement of costs and fees if they prevail against an agency in an administrative hearing (section 41-1007)
• ✓An agency may not charge a fee unless the fee for the specific activity is expressly authorized (section 41-1008)

Agencies are restricted from basing decisions on unauthorized conditions and from exceeding rulemaking authority. Persons may challenge agency practices treated as rules.

• ✓An agency may not base a licensing decision on conditions not authorized by statute, rule, or state tribal gaming compact (section 41-1030(B))
• ✓An agency may not make a rule exceeding subject matter areas in a specific statute or use general authority to supplement more specific grants (section 41-1030(D))
• ✓A person may allege an agency practice or substantive policy statement constitutes a rule and have it declared void (section 41-1033)

Persons have rights to independent administrative law judges, uniform appeal procedures, timely license decisions, and written denial notices.

• ✓A person may have contested cases/appealable agency actions heard by an independent administrative law judge (articles 6 and 10)
• ✓A person may have an agency approve or deny a license application within a predetermined time frame (article 7.1)
• ✓On license denial, a person is entitled to written notice justifying the denial with statute/rule references and explaining appeal rights (section 41-1076)

Persons may participate in rulemaking by providing comments/testimony, filing early review petitions, and filing complaints with oversight bodies. They may challenge agency practices that constitute unauthorized rules.

• ✓A person may allege that an agency practice or substantive policy statement constitutes a rule and have it declared void (section 41-1033)
• ✓A person may file a complaint with the administrative rules oversight committee regarding lack of conformity with statute or duplicative/onerous requirements
• ✓A person may file a complaint with the office of the ombudsman-citizens aide to investigate administrative acts of agencies

Each state agency conducting audits, inspections, or regulatory enforcement must create and post on its website a small business bill of rights, and provide it in writing to the on-site representative of the regulated small business.

• ✓Agencies must create and clearly post a small business bill of rights on their website by selecting applicable rights from this section and section 41-1009
• ✓The notice must include the process to file a complaint with designated agency employees and their contact information
• ✓The notice must state that if reasonable efforts with the agency fail, the regulated person may contact the office of ombudsman-citizens aide

Persons may review rulemaking activity and participate in the rulemaking process, including providing comments/testimony and filing early review petitions with the Governor's Regulatory Review Council (GRRC).

• ✓A person may provide written comments or testimony on proposed rules and have the agency adequately address them (section 41-1052(D))
• ✓A person may file an early review petition with the Governor's Regulatory Review Council
• ✓A person may comment during the mandatory sixty-day comment period before GRRC

Each state agency conducting audits, inspections, or enforcement under 41-1009 must create and post a small business bill of rights on its website and provide it in writing to the on-site representative.

• ✓The agency must clearly post a small business bill of rights on its website and provide a written copy to the authorized on-site representative
• ✓The notice must include the complaint process, contact information of designated employees (41-1006), and state that unresolved problems may be taken to the ombudsman-citizens aide
• ✓The enumeration of rights does not grant additional rights beyond those in the referenced sections