32-2183 Subdivision Public Reports; Denial; Unlawful Sales +15Arizona · Real Estate · English

Unless grounds for denial exist, the commissioner issues a public report authorizing sale/lease, which the subdivider must reproduce and deliver to buyers before they sign.

• ✓Commissioner shall issue a public report authorizing sale or lease unless grounds for denial exist
• ✓Subdivider must furnish each initial buyer or lessee a copy of the public report before signing any offer to purchase or lease, taking a receipt
• ✓Reports for property near military airports, training routes, restricted air space, or electronics ranges must include required bold 12-point disclosures and maps

A subdivider may elect an expedited final public report process for improved lots with review deadlines and administrative completeness rules.

• ✓Initial filing fee is $500 or amended filing fee of $250 for the notification
• ✓Department must issue a certification or denial letter within ten business days; if not, the report is deemed administratively complete
• ✓Sales/leasing may commence only after obtaining a certificate of administrative completeness
• ✓If deficiency is immediately corrected, the commissioner shall vacate any action commenced under 32-2154 or 32-2157

The commissioner may suspend, revoke, or deny a public report on numerous enumerated grounds relating to compliance, fraud, title, financing, and principals' backgrounds.

• ✓Grounds include: failure to comply with the article/rules; misrepresentation, deceit or fraud; inability to deliver title; inadequate financial arrangements for improvements
• ✓A principal, officer, director, or 10%+ owner convicted of fraud/dishonesty crimes or enjoined/sanctioned in real estate matters is grounds for denial
• ✓Additional grounds: unable to show lots usable for intended purpose, procurement by fraud, condominium plat/declaration noncompliance, blanket encumbrance defects, no permanent access, and unreasonable health risk

Subdividers cannot sell/lease without a public report and certificate of administrative completeness; violations make the transaction rescindable by the buyer.

• ✓A subdivider shall not sell/lease or offer subdivided lands without first obtaining a public report and a certificate of administrative completeness (unless exempt)
• ✓Sale/lease before issuance or failure to deliver the public report renders the transaction rescindable by the purchaser or lessee
• ✓Rescission action must be brought within three years of execution; prevailing party is entitled to reasonable attorney fees

It is unlawful to sell a lot unless completion of promised improvements is assured through one of several acceptable methods.

• ✓Unlawful to sell a lot unless improvements are completed OR completion is assured by financial arrangements acceptable to the commissioner
• ✓Alternatively, government agrees to prohibit occupancy/escrow closing until improvements are complete, or an assurance agreement with a trustee is recorded
• ✓Financial arrangements may be phased for common community/recreation facilities in a master planned community

In active management areas and certain counties/cities, a public report or exemption is denied unless assured or adequate water supply requirements are satisfied.

• ✓In an active management area, the commissioner must deny a public report unless a certificate of assured water supply or a qualifying written commitment/exemption exists
• ✓Outside active management areas in adopting jurisdictions, an adequate water supply determination or qualifying exemption is required
• ✓Fees under sections 48-3772 and 48-3774.01 must be paid where applicable

Print/internet ads for specific lots require a disclosure, and applicants may request a hearing on denial with statutory deadlines.

• ✓Print/magazine/newspaper/internet ads for a specific lot must state 'a public report is available on the state real estate department's website'
• ✓An applicant may request a hearing within 30 days after receipt of the denial order
• ✓Hearing must be held within 20 days of the request; failure to hold it timely or render a decision within 45 days after submission rescinds denial and issues the report

The commissioner may investigate, hold hearings, issue summary orders, seek injunctions, and pursue receivers or a writ of ne exeat against violators.

• ✓Commissioner may investigate and examine subdivider books/records; subdivider must keep records of all sales transactions and funds received
• ✓Commissioner may issue summary orders, hold hearings, or bring court action for injunctions and restoration of monies/property
• ✓When a person conceals assets or is about to leave the state, the commissioner may apply ex parte for a receiver or a writ of ne exeat

Before public report approval, a deposit may be accepted for a timeshare interest reservation if requirements are met. Notice of intent and public report approval are not required to enter a reservation. The reservation deposit is capped and must be escrowed quickly.

• ✓Reservation deposit for a single timeshare interest shall not exceed 20% of the purchase price
• ✓Within one business day of acceptance, the deposit must be delivered to an independent third-party escrow/trust account in a federally insured depository
• ✓Notice of intent (32-2197.02) and public report approval (32-2197.08) are NOT required to enter a reservation
• ✓Deposits remain in escrow until cancellation/termination or execution of a purchase agreement

Before accepting reservations, the prospective seller must provide the department a hard copy or electronic notice (as approved by the commissioner) of intent to accept reservations, including specified identifying information.

• ✓Notice must include the seller's name, address, and telephone number
• ✓Notice must include any retained real estate broker's information
• ✓Notice must include the timeshare property name/location, the reservation form (subject to approval), and the escrow/trust agent's name and address

Within 15 calendar days after the seller receives the approved public report, the seller must give the buyer a copy of the report and proposed purchase agreement. The parties then have 10 business days to enter a contract; otherwise the reservation automatically terminates. The buyer may cancel any time before executing a purchase agreement.

• ✓Seller must provide the public report and proposed purchase agreement within 15 calendar days of receipt
• ✓Parties have 10 business days after buyer's receipt to enter a contract or the reservation automatically terminates
• ✓A prospective buyer may cancel a reservation any time before executing a purchase agreement
• ✓Seller has no cancellation rights other than as provided in the subsection

Within five business days after termination for any reason, the seller (or escrow agent if seller is unavailable) must refund all deposits plus any interest earned, minus agreed account fees. A buyer may not transfer reservation rights without the seller's prior written consent. If the department denies the application, the seller must notify buyers and return deposits.

• ✓Refund of all deposits (plus interest, minus agreed fees) required within 5 business days after termination
• ✓A buyer may not transfer reservation rights without the seller's prior written consent
• ✓If the application is denied, the seller must notify each buyer in writing within 5 business days and return deposits

Each reservation form must contain a conspicuous statement above the purchaser's signature line disclosing that the department has not inspected or approved the property, no public report has been issued, and no offer to sell/purchase may be accepted before issuance of a public report or pre-sale authorization.

• ✓Statement must be in conspicuous type above the purchaser's signature line
• ✓Must state the department has not inspected or approved and no public report has been issued
• ✓Must state no offer may be made or accepted before issuance of a public report or pre-sale authorization

All required reservation notices must be in writing and either hand delivered or sent by certified mail, return receipt requested with postage prepaid. Mailed notices are deemed delivered on the earlier of actual receipt or seven calendar days after mailing.

• ✓Notices must be in writing, hand delivered or certified mail return receipt requested
• ✓Mailed notices deemed delivered at the earlier of actual receipt or 7 calendar days after mailing

When a public report is required, the developer must provide prospective purchasers the opportunity to review it and must obtain the purchaser's signature verifying receipt and opportunity to review. The receipt must be completed on the approved form provided with the public report.

• ✓The developer must obtain the purchaser's signature verifying receipt of a copy and opportunity to review the public report
• ✓The public report receipt must be completed on the form provided with the approved public report

When a public report is required, the developer must provide prospective purchasers an opportunity to review the public report and complete a public report receipt. The developer must obtain the purchaser's signature verifying receipt and opportunity to review, using the form provided with the approved public report.

• ✓Developer must provide an opportunity to review the public report
• ✓Developer must obtain purchaser's signature on the public report receipt
• ✓Receipt must be completed on the form provided with the approved public report

Specific fees apply to membership camping public report applications: $500 for a public report, $300 for amendment or renewal, and $100 for a special order of exemption.

• ✓Public report application fee is $500
• ✓Amendment or renewal fee is $300; special order of exemption fee is $100

Fees required for membership camping public reports: $500 for a public report application, $300 for amendment or renewal, and $100 for a special order of exemption.

• ✓Public report application fee is $500
• ✓Amendment or renewal fee is $300
• ✓Special order of exemption fee is $100

Each state agency must annually publish the names of employees designated to assist the public. In written communications demanding payment, denying applications, or requesting corrections, the agency must provide employee contact information.

• ✓Agencies must annually publish designated assistance employees' names in the register, state directory, and a Maricopa county telephone directory
• ✓Written communications demanding payment, denying a permit/license, or requesting corrections must provide the name, telephone number, and email of an authorized employee
• ✓The authorized employee must reply within five business days after the agency receives the communication

An agency inspector, auditor, or regulator entering premises must present ID, state the purpose and legal authority, disclose fees, and afford the regulated person accompaniment and various procedural rights.

• ✓Inspectors must present photo identification on entry and state the purpose and legal authority for the inspection/audit
• ✓A regulated person is responsible only for the direct and reasonable costs of the inspection/audit and is entitled to a detailed billing statement
• ✓Inspectors must allow an authorized on-site representative to accompany them (except during confidential interviews) and inform persons when conversations are being tape recorded

Persons interviewed during inspections have several rights, including notice that participation is voluntary, time to review witness statements, and the right to have an attorney or expert present.

• ✓Interviewed persons must be told participation is voluntary unless legally compelled, and that statements may appear in the inspection report
• ✓A person must be allowed at least 24 hours to review and revise any written witness statement drafted by the inspector before signing
• ✓Inspectors may not prohibit the regulated person from having an attorney or expert present during the interview

On initiation of an audit/inspection, inspectors must provide the regulated person written notice of rights, contact information, due process/appeal rights, and time limits, and must obtain the person's signature.

• ✓Inspectors must provide written notice of rights, a contact person, due process/appeal rights, and the statute of limitations for compliance actions
• ✓Inspectors must obtain the signature of the regulated person or on-site representative acknowledging receipt of the notice; refusal or absence must be noted on the writing
• ✓A regulated person may redact trade secrets and proprietary/confidential information if documents become public records, unless confidential by statute

Agencies must give a copy of the inspection report and generally provide the regulated person an opportunity to correct alleged deficiencies unless certain exceptions apply.

• ✓The agency must provide the inspection report at the time of inspection, within 30 working days, or as required by federal law
• ✓Agencies must allow correction of deficiencies unless documented in writing that deficiencies were intentional, not correctable in reasonable time, show a pattern of noncompliance, or pose significant risk
• ✓If unsure whether exemptions apply, the agency must provide an opportunity to correct; an agency decision under subsections E or G is not an appealable agency action

Evidence gathered in violation of section 41-1009 may be excluded in civil/administrative proceedings, and this section applies to all state agencies conducting inspections/audits with certain exceptions.

• ✓Evidence gathered in violation of this section may be excluded in a civil or administrative proceeding, but NOT in a criminal proceeding
• ✓This section governs if a conflict arises between rights afforded here and rights under another statute
• ✓The section does not apply to criminal investigations, undercover investigations, or where there is reasonable suspicion of criminal activity

A person must disclose their name when reporting an alleged violation of law or rule. The complainant's name is generally a public record during investigation or enforcement.

• ✓A person must disclose their name during the course of reporting an alleged violation of law or rule
• ✓The complainant's name is a public record unless the affected agency determines release may result in substantial harm to any person or the public health or safety

If it appears a person has engaged, is engaging, or is preparing to engage in a violation of the chapter or a rule/order, the commissioner may order the person to cease and desist, make restitution, or take affirmative corrective action within a reasonable time. Aggrieved persons may request a hearing, and the commissioner may seek an injunction in court.

• ✓Commissioner may issue cease and desist orders for actual or preparing violations
• ✓Orders may require restitution or affirmative corrective action
• ✓Aggrieved person may request a hearing under title 41, chapter 6, article 10

If an application fails to comply substantially with requirements, the commissioner must mail an itemized list of deficiencies within 30 calendar days of receipt. 'Comply substantially' means filing minimally necessary documents including a certified copy of the judgment, legible documents establishing the transaction and losses, and a statement of amounts recovered.

• ✓Itemized deficiency list must be mailed within 30 calendar days of receiving the application
• ✓Substantial compliance requires a certified copy of the judgment
• ✓Substantial compliance requires documents establishing the transaction and losses
• ✓Substantial compliance requires a statement of amounts recovered from the debtor

The claimant must respond within 60 calendar days after receiving the deficiency list. Failure to correct deficiencies within 60 days results in the department closing the file unless a written extension is requested. A claimant with a closed file may submit a new application.

• ✓Claimant must respond within 60 calendar days to the deficiency list
• ✓File is closed if deficiencies are not corrected within 60 days
• ✓A written extension request can prevent file closure
• ✓The 32-2188.04 decision deadline is suspended from mailing of the deficiency list until information is received

An applicant for a temporary broker's license under A.R.S. § 32-2133 must submit a copy of the death certificate/notice (or letter advising of the broker's illness or disability) and a letter from the surviving spouse, attorney, personal representative, or responsible party appointing an individual to serve as temporary broker for 90 days to close down the business or install a new designated broker per A.R.S. § 32-2125(c).

• ✓Temporary broker serves 90 days to close the business or install a new designated broker
• ✓Requires death certificate/illness letter plus an appointment letter from a responsible party

An individual applying for a temporary cemetery salesperson's license, temporary broker's license, or membership camping certificate of convenience must submit the type of license, name/address/phone/date of birth of applicant, mailing address if different, the employing broker's name/address of record/email/phone and license number, and the branch office information where employed if different, plus the applicable fee.

• ✓Temporary license applications require applicant date of birth and employing broker details
• ✓Applicable fee must accompany the application

The designated broker must submit an affidavit under A.R.S. § 32-2134 or 32-2134.01 stating that a temporary cemetery license applicant has been trained in cemetery and contract law, or that a membership camping certificate applicant will be trained in membership camping and contract laws.

• ✓Cemetery applicant must have been trained in cemetery and contract law
• ✓Membership camping applicant must be (future) trained in membership camping and contract laws

The Department restricts issuing or amending public reports for lots subject to options or blanket encumbrances where cross-default provisions could prevent release. Developers must disclose provisions allowing buyers to obtain clear title.

• ✓Department shall not issue/amend a public report for a lot subject to a blanket encumbrance if a cross-default provision means the lot will not be released when the encumbrance is in default
• ✓Developer may require payment of a premium to permit acquisition or release of the lot
• ✓When a blanket encumbrance clouds title, the developer must place a written statement from the encumbrance holder in the application quoting provisions enabling a buyer to acquire title free of the encumbrance

Each state agency must publicly identify employees designated to help the public and must provide a specific contact in certain written communications, with a required reply timeframe.

• ✓Each agency must publish annually in the register, state directory, and Maricopa county phone directory the names of designated assistance employees
• ✓An agency must provide the employee's name, phone, and email in written communications that demand payment, deny a permit/license, or request corrections/additional information
• ✓The authorized employee must reply within five business days after the agency receives the communication

A party may file a motion for rehearing or review within thirty days after service of the final administrative decision; opposing parties may respond within fifteen days. After a hearing and final decision, a party need not file a rehearing motion to exhaust administrative remedies.

• ✓Motion for rehearing/review must be filed within 30 days after service
• ✓Opposing party may respond within 15 days after the motion is filed
• ✓A rehearing motion is not required to exhaust administrative remedies after a hearing

A party to an action with a self-supporting regulatory board must file a motion for rehearing within thirty days to be eligible for judicial review. The board must notify parties that failure to file prohibits judicial review. Service is complete on personal service or five days after mailing.

• ✓Self-supporting board rehearing motion must be filed within 30 days to preserve judicial review
• ✓Board must notify parties that failure to file bars judicial review
• ✓Service is complete on personal service or 5 days after mailing
• ✓Agency must rule on the motion within 15 days after response is filed

Under Arizona's legislative sunset review, the State Real Estate Department terminates on July 1, 2030, and Title 32, Chapter 20 (the real estate statutes) along with this section are repealed on January 1, 2031, unless the legislature reauthorizes the agency.

• ✓The State Real Estate Department terminates on July 1, 2030
• ✓Title 32, chapter 20 and section 41-3030.05 are repealed on January 1, 2031

The State Real Estate Department terminates on July 1, 2030, subject to legislative sunset review. Title 32, chapter 20 (governing real estate) and this section are repealed on January 1, 2031, unless continued by the legislature.

• ✓The State Real Estate Department terminates on July 1, 2030
• ✓Title 32, chapter 20 and this section are repealed on January 1, 2031

No advertising, communication, or sales literature (including oral statements) may contain untrue statements or omissions of material fact, representations that lots are without risk or that loss is impossible, or depictions of proposed improvements/nonexistent scenes without clear indication. Claims of suitability as homesites require potable water and sewage availability or clear disclosure of facts to the contrary.

• ✓No untrue statements or material omissions in any advertising
• ✓No representation that lots are risk-free or loss is impossible
• ✓Proposed improvements/nonexistent scenes must be clearly indicated as such
• ✓Homesite suitability claims require potable water and sewage availability or contrary disclosure

Within ten days after request by the commissioner, the subdivider must file advertising material used in sales. All advertising must be consistent with the notice of intention and public report. Copies must be retained and available for department review for three years after last use.

• ✓Advertising material must be filed within 10 days of commissioner request
• ✓Advertising must be consistent with notice of intention and public report
• ✓Advertising copies retained and available for 3 years after last use

A subdivider may hold a drawing or contest to induce visits only if: a current public report is in effect; not subject to an ongoing investigation (unless permitted); details submitted for department approval; limited in time/scope/location; material terms disclosed in writing; no fee charged; no required sales presentation or tour; compliance with other laws; and the subdivider is responsible for lawful conduct.

• ✓Drawing/contest requires a current public report in effect
• ✓No fee may be charged to participate in a drawing/contest
• ✓Participants cannot be required to attend a sales presentation or take a tour
• ✓Details must be submitted to department for approval before holding

Sales of unsubdivided land lots must comply with one of three methods: recording a deed conveying marketable title; escrow with a real estate sales contract and executed deed; or a deed to a trustee with a trust agreement.

• ✓Method 1: Deed conveying merchantable and marketable title recorded within sixty days of purchaser execution
• ✓Method 2: Escrow deposit of a real estate sales contract within sixty days, with preliminary title report and executed deed
• ✓Method 3: Deed to a trustee with trust agreement, with the sales contract recorded within sixty days

Purchasers may rescind unsubdivided land contracts within seven calendar days without cause. Buyers who have not inspected the parcel have a six-month period to inspect and unilaterally rescind.

• ✓Purchaser may rescind without cause by written notice by midnight of the seventh calendar day after executing the contract
• ✓A buyer who has not inspected has a six-month period after execution to inspect and unilaterally rescind
• ✓At inspection the buyer must sign an affidavit stating the property was inspected

All required documents must be recorded in the county and state where the land is located. Any sale or assignment of a mortgage, deed of trust, or sales contract must be recorded and noticed to the commissioner within 60 days.

• ✓Documents must be recorded in the county and state where the unsubdivided land is located
• ✓Sale/assignment of a mortgage, deed of trust, or contract must be recorded and noticed to commissioner within sixty days of execution
• ✓Blanket encumbrance releases must accompany the applicable sale method

Only specific institutions may act as trustee under the trust deed sale method, including banks, savings and loan associations, and qualified title insurance companies doing business under applicable laws.

• ✓Only a bank, savings and loan association, or qualified title insurance company may act as trustee
• ✓Persons or firms authorized to receive escrows under applicable state law may act as trustee
• ✓This subsection does not extend trustee authority unless otherwise provided by law

Advertising, communications, sales literature, or oral statements must not contain untrue material statements or omissions, representations that contracts are risk-free, or depictions of proposed improvements without clearly noting they are proposed and nonexistent scenes do not exist.

• ✓No untrue statement or omission of material fact that misleads
• ✓No statement that contracts are offered without risk or loss is impossible
• ✓Proposed improvements and nonexistent scenes must be clearly disclosed as such

The commissioner may permit lotteries/drawings to induce prospective buyers to attend sales presentations. Requirements include prior approval, financial assurances, escrow of prizes, disclosure of odds and terms, no participation fee, and broker responsibility for proper conduct.

• ✓No lottery or drawing may be held unless approved in advance by the commissioner
• ✓No fee may be charged to any lottery or drawing participant
• ✓Prizes must be held by the department or in neutral escrow pending award; odds and terms must be disclosed in writing

The advertising restrictions do not apply to newspaper/magazine owners, publishers, or radio/television station owners who disseminate an advertisement without knowledge of the advertiser's intent, design, or purpose.

• ✓Publishers and broadcasters without knowledge of the advertiser's intent are exempt from advertising liability
• ✓It is unlawful for owners, developers, agents, or employees to aid advertising that violates this section

Advertising, communications, sales literature, and oral statements cannot contain untrue material statements or misleading omissions, cannot state contracts are offered without risk or that loss is impossible, and must clearly indicate when improvements are proposed or scenes are nonexistent.

• ✓No untrue statements of material fact or misleading omissions
• ✓Cannot represent contracts as offered without risk or that loss is impossible
• ✓Proposed improvements and nonexistent scenes must be clearly labeled as such
• ✓It is unlawful to authorize, use, or aid in violating advertising

The commissioner may permit lotteries/drawings to induce sales presentations or tours. Operators need a recorded nondisturbance agreement or financial assurance, advance approval, an application fee ($100-$250), prizes held in escrow, disclosed odds/terms in writing, and no participation fee.

• ✓Operator must have nondisturbance agreement, bond, letter of credit, or financial assurance
• ✓No lottery/drawing may be held without advance commissioner approval
• ✓Application fee is at least $100 and not more than $250
• ✓No fee may be charged to lottery/drawing participants
• ✓Odds and terms must be disclosed in writing; prize held in neutral escrow
• ✓Membership camping broker is responsible for lawful conduct of any lottery/drawing

No campground facility may be advertised or promoted in a way appearing to guarantee unimpeded use or access if a blanket encumbrance exists, unless a nondisturbance or acceptable agreement has been recorded, filed and accepted by the department under 32-2198.14.

• ✓Cannot advertise guaranteed access if blanket encumbrance exists
• ✓Requires recorded/filed/accepted nondisturbance agreement under 32-2198.14

The advertising rules do not apply to newspaper/magazine publishers or radio/TV station owners who disseminate an advertisement without knowledge of the advertiser's intent, design, or purpose.

• ✓Media publishers/broadcasters exempt if no knowledge of advertiser's intent
• ✓Exemption requires lack of knowledge of the intent, design, or purpose