32-2183 Subdivision Public Reports +3Arizona · Real Estate · English

Upon examination, unless grounds for denial exist, the commissioner shall issue a public report authorizing sale or lease. The subdivider must reproduce the report, make it available to each prospective customer, and furnish each initial buyer/lessee a copy before they sign any offer, taking a receipt.

• ✓Public report authorizes sale/lease of lots within the subdivision
• ✓Subdivider must furnish each buyer/lessee a copy before they sign any offer
• ✓Subdivider must take a receipt for delivery of the public report
• ✓Special military airport/route/restricted airspace disclosures required in bold 12-point font on first page

The commissioner may suspend, revoke, or deny a public report for: failure to comply with the article/rules; misrepresentation/deceit/fraud; inability to deliver title; inadequate financial arrangements for improvements; inability to show usability; certain criminal/disciplinary history of principals (10%+ interest holders); procurement by fraud; condominium plat/declaration noncompliance; blanket encumbrance defects; failure to demonstrate permanent access; or unreasonable health risk.

• ✓Fraud, misrepresentation, or deceit is grounds for denial/revocation
• ✓Inability to deliver title or demonstrate usability is grounds for denial
• ✓Criminal history of 10%+ owners/stockholders is grounds for denial
• ✓Failure to demonstrate permanent access or unreasonable health risk are grounds for denial

A subdivider shall not sell/lease subdivided lands without first obtaining a public report and certificate of administrative completeness. Sale/lease before issuance or failure to deliver the report renders the transaction rescindable by the buyer. Rescission action must be brought within three years of execution; prevailing party gets attorney fees.

• ✓Public report required before any sale or lease of subdivided lands
• ✓Sale before public report or failure to deliver renders transaction rescindable
• ✓Rescission action must be brought within 3 years of execution
• ✓Prevailing party in rescission action entitled to reasonable attorney fees

A subdivider may elect to prepare a final public report for improved lots. The department reviews within ten business days and issues either a certification of administrative completeness or a denial letter. If neither is issued in 10 business days, the report is deemed administratively complete. Initial filing fee is $500 (amended $250).

• ✓Department must issue certification or denial within 10 business days
• ✓Report deemed administratively complete if no action in 10 business days
• ✓Initial filing fee $500, amended filing fee $250
• ✓Sales may commence after obtaining a certificate of administrative completeness

In an active management area, the commissioner must deny a public report unless the subdivider has a certificate of assured water supply or written commitment of water service. Outside active management areas in counties/cities with adopted water adequacy rules, denial applies unless adequate water supply is demonstrated or an exemption applies.

• ✓In active management area, assured water supply certificate or commitment required
• ✓Outside AMA, adequate water supply must be demonstrated where local rules apply
• ✓Certain plat exemptions may satisfy the water adequacy requirement

On print or internet advertisements for a specific lot/parcel, the subdivider must disclose that a public report is available on the department's website. Applicants may request a hearing within 30 days of a denial order. The commissioner may investigate, hold hearings, issue summary orders, seek injunctions, receivers, or writs of ne exeat to protect the public.

• ✓Advertisements must disclose public report is available on department website
• ✓Applicant may request hearing within 30 days after denial order
• ✓Commissioner may seek receiver or writ of ne exeat when assets are being concealed

Upon examination without grounds for denial, the commissioner issues a public report authorizing sale/lease. Military airport disclosures must appear in bold 12-point font on the first page. Buyers must receive a copy before signing an offer to purchase.

• ✓Military airport vicinity statements must appear in bold twelve point font block letters on the first page of the report
• ✓Owner/agent must furnish each prospective buyer a copy of the report before the buyer signs an offer to purchase, taking a receipt
• ✓Report requirements do not require amendment of reports issued on or before December 31, 2001

An owner may prepare their own final public report, submit it with notification and fee, and receive a registration number. The department determines administrative completeness within 15 business days, and sales may begin after receiving the certificate.

• ✓Initial filing fee is $500 or an amended filing fee of $250
• ✓Department must determine administrative completeness within fifteen business days after receipt
• ✓An owner may commence sales/leasing after obtaining a certificate of administrative completeness

The commissioner may deny a public report for failure to comply with the article, misrepresentation/fraud, inability to deliver title, inadequate financial arrangements for improvements, failure to show usability, or specified criminal/regulatory history of owners/officers.

• ✓Denial grounds include misrepresentation, deceit, fraud, or inability to deliver title contracted for
• ✓Denial applies if any owner, officer, director, partner, or 10%+ stockholder has been convicted of a felony/misdemeanor involving fraud or dishonesty in real estate transactions
• ✓Denial applies for administrative orders, adverse judgments, or violations of the chapter by responsible parties

No owner or agent may sell/lease unsubdivided lands without first obtaining both a public report and a certificate of administrative completeness. Sales before issuance are voidable by the purchaser.

• ✓Sale/lease prior to issuance of the public report is voidable by the purchaser
• ✓An action to void must be brought within three years of execution of the purchase agreement
• ✓The prevailing party in a voidance action is entitled to reasonable attorney fees

The commissioner may deny a public report for noncompliance, misrepresentation/fraud, inability to deliver title, inadequate financial arrangements for improvements, failure to show usability, and specified criminal or regulatory history of principals.

• ✓Denial grounds include felony/misdemeanor convictions involving fraud, dishonesty, or real estate conduct by the owner/agent/officer/director or 10%+ stakeholders
• ✓Denial grounds include inability to deliver title, inadequate financial arrangements for improvements, or misrepresentation to purchasers
• ✓Applies to any stockholder owning ten per cent or more of corporate stock

No owner or agent may sell, lease, or offer unsubdivided lands without first obtaining a public report and certificate of administrative completeness. Sales before issuance are voidable by the purchaser.

• ✓A sale or lease prior to public report issuance is voidable by the purchaser
• ✓An action to void must be brought within three years of the purchase agreement execution
• ✓The prevailing party in a voidance action is entitled to reasonable attorney fees

An applicant objecting to denial may request a hearing within 30 days. The commissioner must hold the hearing within 20 days, and failure to timely hold the hearing or render a decision results in rescission of denial and issuance of a report.

• ✓A written hearing request must be filed within thirty days after receipt of the order of denial
• ✓The hearing must be held within twenty days after receipt of the request unless postponed
• ✓If the hearing is not held within twenty days or a decision not rendered within forty-five days, the denial is rescinded and a public report issued

Upon examination, unless grounds for denial exist, the commissioner issues a public report authorizing sale or lease. The report contains section 32-2195 data plus any other necessary information, and military airport statements if applicable.

• ✓The report must include military airport vicinity statements in bold twelve point font block letters on the first page when applicable
• ✓The owner or agent must furnish each prospective buyer a copy of the report before the buyer signs an offer to purchase, taking a receipt

An owner may prepare a final public report, submit it with the notification and fees, receive a registration number, and after certificate of administrative completeness may commence sales. The department may examine before or after certification.

• ✓Initial filing fee is $500 or amended filing fee is $250 for the notification
• ✓The department must determine within fifteen business days whether the notification and public report are administratively complete
• ✓An owner may commence sales or leasing only after obtaining a certificate of administrative completeness

An applicant may request a hearing within 30 days of a denial order. Strict timelines apply. The commissioner may investigate, examine records, issue summary orders, and seek injunctions for violations.

• ✓A written request for hearing must be filed within thirty days after receipt of the denial order
• ✓If hearing is not held within twenty days (plus postponement) or decision not rendered within forty-five days, the denial is rescinded and a public report issued
• ✓Owner/agent must keep records of all sales transactions and funds and make them accessible to the commissioner on reasonable notice

Section 32-2121 sets out the applicability of the licensing article and lists exemptions from licensing requirements, such as property owners dealing with their own property, certain fiduciaries, and attorneys acting within their practice.

• ✓Owners selling or leasing their own property are generally exempt from licensing
• ✓Certain fiduciaries, executors, trustees, and attorneys-in-fact may be exempt
• ✓The exemption does not apply if a person is engaged in the business of real estate for others for compensation

Section 32-2122 requires a license to act as a real estate broker or salesperson. Engaging in licensed activity for compensation without a license is prohibited.

• ✓A valid license is required to act as a broker or salesperson for others for compensation
• ✓Unlicensed activity is subject to enforcement under 32-2165
• ✓A salesperson must be employed by and licensed under a designated broker

Sections 32-2123 and 32-2124 cover the application process and qualifications for broker and salesperson licenses, including age, education, examination, and character requirements. Both were amended by SB1171 in 2024.

• ✓Applicants must submit a complete application meeting statutory requirements (32-2123)
• ✓Applicants must meet qualifications including education, examination, and good character (32-2124)
• ✓Prelicensure education and examination are prerequisites to licensure

Section 32-2130 governs renewal of licenses, education requirements, and broker licensee renewal as a salesperson licensee. Section 32-2129 covers advance payment of license fees. Amended by SB1171 in 2024.

• ✓Licenses must be renewed with required continuing education completed
• ✓A broker may renew as a salesperson licensee under specified conditions
• ✓Continuing education hours must be satisfied before renewal (see R4-28-402)

Section 32-2125 addresses licenses for corporations, limited liability companies, and partnerships. Section 32-2125.01 covers issuance of licenses, multiple licenses, and their use.

• ✓Corporations, LLCs, and partnerships may be licensed as entities (32-2125)
• ✓A designated broker must be responsible for the entity's licensed activities
• ✓32-2125.01 governs issuance and permissible use of multiple licenses

Section 32-2125.02 addresses nonresident licensees, service of process requirements, and employment. Nonresidents must consent to service of process in Arizona.

• ✓Nonresident licensees must appoint the commissioner or consent to service of process in Arizona
• ✓Nonresidents must comply with Arizona employment and supervision requirements
• ✓Amended by SB1171 in 2024

Section 32-2126 requires a place of business, notice of change in location, and provides that failure to give notice results in cancellation of license; it also addresses signage. Amended by SB1171 in 2024.

• ✓A broker must maintain a designated place of business
• ✓Notice of change in location must be given to the department
• ✓Failure to give notice of a location change results in cancellation of the license

Section 32-2127 covers licenses for additional places of business, branch office managers, and the broker's temporary absence. Amended by SB1171 in 2024.

• ✓Each additional place of business requires a branch office license
• ✓A branch office manager must be designated for each branch
• ✓Provisions govern operations during a broker's temporary absence

Section 32-2131 addresses reinstatement of a license, and 32-2132 sets out the fee schedule (amended by SB1171 in 2024).

• ✓A lapsed license may be reinstated under conditions in 32-2131
• ✓Statutory fees apply to applications, licenses, and renewals (32-2132)

Section 32-2135 governs real estate schools, courses of study, instructors, and certification. Section 32-2136 addresses broker management clinics. Both amended by SB1171 in 2024.

• ✓Real estate schools, courses, and instructors must be certified by the department
• ✓Broker management clinics are required education for brokers (32-2136)
• ✓Course and instructor approval requirements are detailed in R4-28-404

Section 32-2125.03 protects the confidentiality of a licensee's residential address, electronic mail address, residential telephone number, and social security number.

• ✓A licensee's residential address, email, phone, and SSN are kept confidential
• ✓This protects licensees from public disclosure of sensitive personal data

Section 32-2128 requires the display and possession of the license certificate, ensuring licensees can demonstrate their active licensure.

• ✓Broker licenses must be prominently displayed at the place of business
• ✓Salespersons must be able to produce evidence of licensure

Section 32-2133 provides for a temporary broker's license, 32-2134 for a temporary cemetery salesperson's license, and 32-2134.01 for a membership camping salesperson certificate of convenience.

• ✓A temporary broker's license may be issued in defined circumstances (32-2133)
• ✓Temporary cemetery salesperson licenses have specific requirements (32-2134)
• ✓A certificate of convenience applies to membership camping salespersons (32-2134.01)

Section 32-2137 sets out circumstances under which a license may be cancelled, including failure to comply with statutory requirements such as maintaining a place of business.

• ✓A license may be cancelled for statutory noncompliance
• ✓Cancellation is distinct from suspension or revocation as a disciplinary action

The chapter is administered by the state real estate department under the direction of the real estate commissioner. The department's purpose is to protect the public interest through licensure and regulation of the real estate profession in Arizona.

• ✓The real estate department administers the chapter under the direction of the commissioner
• ✓The department's core purpose is to protect the public interest through licensure and regulation

Before receiving/holding a license, each applicant must obtain a valid fingerprint clearance card per 41-1758.03 and provide it to the department. The department cannot issue an original license without it and may suspend a license if the card is suspended under specified conditions.

• ✓Each license applicant must obtain and provide a valid fingerprint clearance card before holding a license
• ✓No original license is issued before the department receives a valid fingerprint clearance card
• ✓A license may be suspended if the fingerprint card is suspended and the licensee fails to apply for a good cause exception within five business days of notice

The department deposits collected monies into the state general fund unless otherwise prescribed. Each year the commissioner revises fees so revenue equals 95% to 110% of the anticipated appropriated budget; if it exceeds 110%, fees are lowered proportionally the next year.

• ✓Fees must be revised so revenue equals at least 95% but not more than 110% of the anticipated appropriated budget
• ✓If revenue exceeds 110% of the budget, the commissioner must lower fees proportionally the next year

The commissioner is appointed by the governor and serves at the governor's pleasure. A candidate must have at least five years' experience in real estate/title/banking/mortgage industries and three years' administrative experience, and must not be financially interested in or act as broker/salesperson/agent for any real estate/brokerage firm.

• ✓The commissioner must have at least five years' industry experience and three years' administrative experience
• ✓The commissioner cannot be financially interested in or act as a broker/salesperson/agent for any real estate or brokerage firm

The commissioner administers the department, adopts an official seal, maintains a principal office at the state capitol, may open branch offices, adopts rules to carry out the chapter, and may approve standardized legal forms for real estate sale/lease.

• ✓The commissioner may adopt rules necessary to carry out the chapter
• ✓The commissioner may approve standardized legal forms for use in the sale or lease of real estate

The commissioner must record in each county a document disclaiming the validity/enforceability of covenants based on race, religion, color, disability status, or national origin, declaring such recorded restrictions void. This does not affect other lawful covenants, conditions, or restrictions.

• ✓Covenants based on race, religion, color, disability status, or national origin are invalid and unenforceable and declared void
• ✓The disclaimer does not affect any other lawful covenant, condition, or restriction

The commissioner may investigate on their own motion and must investigate on a verified written complaint concerning brokers, salespersons, or developers. The commissioner may examine books/records, take testimony, copy documents, and issue subpoenas (enforceable via superior court). A certification and enforcement unit is established.

• ✓The commissioner MUST investigate upon a verified written complaint and MAY investigate on their own motion
• ✓The commissioner may issue subpoenas and apply to superior court to compel compliance
• ✓A certification and enforcement unit must be established for investigative duties

The commissioner may require additional information about applicants/holders, including criminal records, a valid fingerprint clearance card, and an affidavit on convictions, license actions, injunctions, adverse judgments, bankruptcy, and control interests. For entities, this covers officers, directors, 10%+ beneficiaries/stockholders, and controlling persons.

• ✓The commissioner may require prior criminal records, a fingerprint clearance card, and disclosure affidavits
• ✓For entities, disclosure applies to controlling persons and holders of 10% or more beneficial interest or stock

The department must provide earth fissure maps to the public and post them online with a required accuracy-disclaimer notice. A subdivider, owner, or licensee is not liable for earth fissure disclosure if they provide written disclosure or public report notice referencing the map/website, or had no actual knowledge before the map was posted.

• ✓Earth fissure maps must be posted online with a state-provided accuracy disclaimer notice
• ✓Licensees/owners/subdividers gain immunity by providing written disclosure or public report notice referencing the earth fissure map and website
• ✓Written disclosure/notice does not create an independent cause of action

The real estate advisory board has ten members appointed by the governor for six-year terms (terms of three expire January 31 of each odd year). Membership includes brokers/salespersons, commercial/multifamily managers, timeshare/cemetery, subdivider, educator, and three public members.

• ✓The board has ten members appointed by the governor serving six-year terms
• ✓Three public members must not be related within the third degree to any broker/salesperson licensee
• ✓Not more than five members from any one county may serve concurrently

The board must meet at least once each quarter-year at a designated location and may hold additional meetings on five days' written notice. A majority constitutes a quorum, and a vacancy does not impair the powers of remaining members.

• ✓The board must meet at least once each quarter (four times per year)
• ✓A majority of the board constitutes a quorum

A real estate department education revolving fund is established from sales of educational matter and grants, used for printing real estate laws/rules and other education. Monies are not subject to reversion except amounts over $25,000 at fiscal year end revert to the general fund.

• ✓Fund monies are used for educational publications and seminars for licensees and the public
• ✓Any fund monies exceeding $25,000 at fiscal year end revert to the state general fund

The commissioner must record documents in county recorders' offices disclosing property in the vicinity of military airports/ancillary facilities (potential increased noise/accident potential), under military training routes, restricted air space, or military electronics ranges, with legal/geospatial descriptions. The department posts related maps on its website.

• ✓The commissioner must record disclosures for property near military airports, training routes, restricted air space, and electronics ranges
• ✓The department must post military training route, restricted air space, and electronics range maps on its website

The department must post information advising prospective home buyers to investigate water availability before purchasing, with a link to the department of water resources for definitions of adequate/inadequate water supply and provider designations for areas outside active management areas. It must also display a current map of areas outside active management areas.

• ✓The department must post water availability information and a link to water supply definitions for areas outside active management areas
• ✓The department must display a current map of all areas outside active management areas

The department shall not create, endorse, or sponsor any activity legally performable by a licensee in a way that competes with the private sector unless no capable and willing licensee exists. This does not apply to license approval processes or educational activities under 32-2107.

• ✓The department may not compete with the private sector on activities a licensee can perform unless no capable licensee is willing
• ✓The prohibition does not apply to license approval procedures or educational activities