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Mesa Community College REA 281
Principles of Real Estate Law study materials

Commissioner's Standards Workshop


The Commissioner's Standards are a collection of State laws laid down in the Arizona Revised Statutes, Arizona Administrative Codes, and the Arizona Constitution, which are reviewed, revised, and enforced as necessary by the real estate commissioner and advisory committee. To see these laws link to the Arizona Real Estate Law Book - click here.

The Arizona Constitution, Article XXVI, allows real estate agents to write sales contracts, as long as one of the parties is a client. However, they cannot charge a fee for services, and are not qualified to offer legal advice. Here is the exact wording:

ARTICLE XXVI. RIGHT OF LICENSED REAL ESTATE BROKERS AND SALESMEN TO PREPARE INSTRUMENTS INCIDENT TO PROPERTY TRANSACTIONS
1. Powers of real estate broker or salesman Section
1. Any person holding a valid license as a real estate broker or a real estate salesman regularly issued by the Arizona State Real Estate Department when acting in such capacity as broker or salesman for the parties, or agent for one of the parties to a sale, exchange, or trade, or the renting and leasing of property, shall have the right to draft or fill out and complete, without charge, any and all instruments incident thereto including, but not limited to, preliminary purchase agreements and earnest money receipts, deeds, mortgages, leases, assignments, releases, contracts for sale of realty, and bills of sale.


Judy Lowe is the current Arizona Real Estate Commissioner. She was appointed by Governor Janice Brewer on May 14, 2009. Her web page is: www.re.state.az.us/commish/commish.html The governor appoints the commissioner and the commissioner serves at the pleasure of the governor.





A Spectrum of Laws

Real estate agents in Arizona must comply with many sets of laws and other standards:
1) Your employer's, or brokerage, standards.
2) Professional standards, set down by the National Association of Realtors.
3) Local standards, such as zoning, local ordinances, and property covenants.
4) Federal laws, such as Fair Housing, Reg. Z, RESPA, Sherman Anti-Trust, etc.
5) City, County, State, and Federal civil law, i.e. disputes between people, usually over money.
6) City, County, State, and Federal criminal law, i.e. misdemeanors and felony crimes.
7) Federal and State constitutional law - the Arizona Constitution Article XXVI gives real estate agents the power to prepare legal documents for real estate transactions.

Commissioner's Standards are mainly set down in the Arizona Revised Statutes (A.R.S.). You can find the Arizona Revised Statutes online at website of the Arizona State Legislature (www.azleg.state.az.us/arizonarevisedstatutes.asp).

Most of the laws for Arizona real estate are covered under A.R.S. Title 32, "Professions and Occupations," Chapter 20, "Real Estate."

Title 32 covers all professions that require a state license, such as: architects, engineers, geologists, landscape architects, barbers, cosmetologists, security guards, accountants, chiropractors, dentists, doctors, nurses, pharmacies, psychologists, veterinarians, collection agencies, private investigators, funeral directors, driving schools, colleges, home inspectors, pest control, contractors, appraisers, surveyors, and many more.

A.R.S. Title 32, Chapter 20, Articles 1 - 10 govern the State of Arizona Department of Real Estate www.re.state.az.us, and they are:
Article 1 - R.E. Department operations, including how to choose a commissioner (administrator) and advisory committee
Article 2 - Rules for licensing agents and brokers
Article 3 - Regulations to curb fraud and abuse
Article 3.1 - Property management
Article 4 - Sale of subdivided lands
Article 5 - Real Estate Recovery Fund
Article 5.1 - Condominium Recovery Fund
Article 6 - Cemeteries
Article 7 - Unsubdivided land
Article 8 - repealed
Article 9 - Timeshares
Article 10 - Membership camping





A.R.S. Title 32 - Professions and Occupations
Go to original: http://www.azleg.gov/ArizonaRevisedStatutes.asp?Title=32

Chapter 20REAL ESTATE

Article 1

Real Estate Department
32-2101 Definitions
32-2102 Administration of chapter by real estate department; purpose
32-2103 Placement of monies collected; revision of fees
32-2104 Real estate advisory board; members; terms; qualifications; compensation; chairman; duties
32-2105 Meetings of the state real estate advisory board
32-2106 Real estate commissioner; appointment; qualifications
32-2107 Powers and duties of commissioner; compensation; administration of department; seal; revolving fund
32-2107.01 Recorded disclaimer of unlawful restrictions
32-2108 Powers and duties of commissioner to make investigations and require information
32-2108.01 Fingerprinting license applicants; requirements; fees; definition
32-2109 Employment; compensation
32-2110 Interest of department officer or employee in real estate company prohibited
32-2111 Attorney general as legal adviser and representative of commissioner
32-2112 Admissibility of certified copies of department records in evidence
32-2113 Recorded disclosure for territory in the vicinity of a military airport or ancillary military facility
32-2114 Recorded disclosure for land under a military training route or restricted air space
32-2114.01 Military electronics range
32-2115 Department's website; military training route map; restricted air space map; military electronics range map
32-2116 Military training routes; contacts
32-2117 Earth fissure maps; posting; immunity
32-2118 Competition with private enterprise; prohibition
32-2119 Consumer education; water supply definitions; map

Article 2

Licensing
32-2121 Applicability of article; exemption
32-2122 License required of brokers and salespersons
32-2123 Application for license as broker or salesperson
32-2124 Qualifications of licensees
32-2125 Licenses for corporations, limited liability companies or partnerships
32-2125.01 Issuance of license; multiple licenses; use
32-2125.02 Nonresident licensees; service of process; employment
32-2125.03 Confidentiality of licensee's residential address, electronic mail address, residential telephone number and social security number
32-2126 Place of business required; notice of change in location; failure to give notice as cancellation of license; signs
32-2127 Licenses for additional places of business; branch office manager; broker's temporary absence
32-2128 Display and possession of license certificate
32-2129 Advance payment of license fees
32-2130 Renewal of licenses
32-2131 Reinstatement of license
32-2132 Fees
32-2133 Temporary broker's license
32-2134 Temporary cemetery salesperson's license
32-2134.01 Membership camping salesperson certificate of convenience
32-2135 Real estate schools; courses of study; instructors; certification
32-2136 Broker management clinics

Article 3

Regulation
32-2151 Disposition of funds; trust money deposit requirements
32-2151.01 Broker requirements; record keeping requirements
32-2151.02 Real estate employment agreements; definition
32-2152 Action by broker or salesperson to collect compensation
32-2153 Grounds for denial, suspension or revocation of licenses; letters of concern; provisional license; retention of jurisdiction by commissioner; definitions
32-2153.01 Consent order; terms
32-2154 Cease and desist orders; hearing
32-2155 Restriction on employment or compensation of person as broker or salesperson
32-2156 Real estate sales and leases; disclosure
32-2157 Written notice of charges; summary suspension; hearing
32-2158 Hearing; witnesses; deposition; service of process
32-2159 Judicial review; costs; transcript
32-2160 Filing of complaint by commissioner; prosecution
32-2160.01 Civil penalties
32-2161 False statements or publications concerning land, subdivision or membership camping contract for sale or lease; classification; definition
32-2162 Sale of cemetery property for speculation unlawful
32-2163 Unlawful acts; out‑of‑state broker; cooperation agreement
32-2164 Unlawful subdivision lot sales
32-2165 Unlicensed activities; violation; classification
32-2166 Activities while incarcerated; violation; classification

Article 3.1

Property Management
32-2171 Definitions
32-2172 Scope of article
32-2173 Property management agreements; contents, termination
32-2174 Property management accounts
32-2175 Property management records; requirements; audits
32-2176 Payment of finder fees to apartment tenants; limits; prohibited activities; definitions

Article 4

Sale of Subdivided Lands
32-2181 Notice to commissioner of intention to subdivide lands; unlawful acting in concert; exceptions; deed restrictions; definition
32-2181.01 Power of commissioner to exempt certain subdivisions or fractional interests by special order
32-2181.02 Exempt sales and leases
32-2181.03 Lot reservations; expiration
32-2182 Examination of subdivision by commissioner; fee
32-2183 Subdivision public reports; denial of issuance; unlawful sales; voidable sale or lease; order prohibiting sale or lease; investigations; hearings; summary orders
32-2183.01 Advertising material; contents; order prohibiting use; costs of investigation; drawings or contests
32-2183.02 Recording of actions
32-2183.03 Civil liabilities
32-2183.04 Surety bond requirement; form; cancellation; effective date; certificate of deposit
32-2183.05 Military training route disclosure; military electronics range disclosure; residential property
32-2183.06 Restricted air space disclosure; residential property
32-2184 Change of subdivision plan after approval by commissioner; notice
32-2185 Delivery of clear title by vendor on performance of contract by vendee
32-2185.01 Sale of unimproved lots or parcels; conditions precedent; methods
32-2185.02 Permanent access to subdivided land; rescindable sales
32-2185.03 Deposit of fees
32-2185.06 Contract disclosures; contract disclaimers
32-2185.07 Jurisdiction
32-2185.08 Recordable forms of contracts
32-2185.09 Civil penalties; limitation

Article 5

Real Estate Recovery Fund
32-2186 Real estate recovery fund; liability limits; definitions
32-2187 Payments to real estate recovery fund
32-2188 Statute of limitations; service of summons; application for payment; insufficient monies; definition
32-2188.01 Notice of claim to judgment debtor; response
32-2188.02 Correction of deficiencies in the application
32-2188.03 Investigation and discovery
32-2188.04 Final decision and order on claim; notice
32-2188.05 Claimant's right to appeal denial of claim; service of notice of appeal; response; failure to file response
32-2189 Management of fund
32-2191 Commissioner's standing in court
32-2192 Subrogation of rights; collection
32-2193 Waiver of rights
32-2193.01 Effect of article on disciplinary action
32-2193.02 Surety bond requirement; form; cancellation; effective date; certificate of deposit

Article 5.1

Condominium Recovery Fund
32-2193.31 Definitions
32-2193.32 Condominium recovery fund; award limits
32-2193.33 Payments to the condominium recovery fund
32-2193.34 Statute of limitations; service of summons; application for payment; insufficient monies; definition
32-2193.35 Notice of claim to judgment debtor; written response
32-2193.36 Correction of deficiencies in the application
32-2193.37 Investigation and discovery
32-2193.38 Final decision and order on claim; notice
32-2193.39 Claimant's right to appeal denial of claim; service of notice of appeal; response; failure to file response
32-2193.40 Management of fund
32-2193.41 Commissioner's standing in court
32-2193.42 Subrogation of rights
32-2193.43 Waiver of rights

Article 6

Organization and Regulation of Cemeteries
32-2194 Exceptions
32-2194.01 Notice to commissioner of intention to sell cemetery property; exceptions; restrictions
32-2194.02 Examination by commissioner; fee
32-2194.03 Issuance or denial of certificate of authority; voidable sale; order prohibiting sale; investigations by commissioner; public hearings; summary orders
32-2194.04 Contract disclosures; contract disclaimers
32-2194.05 Advertising material; contents; order prohibiting use
32-2194.06 Records of transactions
32-2194.07 Recording of actions
32-2194.08 Administrative penalties
32-2194.09 Civil liabilities
32-2194.10 Change of cemetery plan after approval by commissioner; notice; fee
32-2194.11 Delivery of clear title by cemetery of cemetery plots
32-2194.12 Permanent access to cemetery land
32-2194.13 Deposit of fees
32-2194.14 Cemetery brokers; disclosures
32-2194.15 Jurisdiction
32-2194.16 Sale of undeveloped cemetery property
32-2194.17 Transaction of cemetery business
32-2194.18 Application for authority to open and operate cemeteries
32-2194.19 Investigation of applicant before granting of certificate of authority where needed
32-2194.20 Right of cemetery to make rules and regulations
32-2194.21 Survey of property; maps and plats
32-2194.22 Filing maps and declaration of dedication
32-2194.23 Nonapplication of law against perpetuities
32-2194.24 Trust fund to be established before certificate of authority granted
32-2194.25 Trust fund to be established before existing cemetery can advertise as endowed‑care cemetery
32-2194.26 Initial deposit required in endowment‑care fund
32-2194.27 Restrictive use of income from endowed‑care fund; obligation
32-2194.28 Deposit in endowed-care fund from sales
32-2194.29 Posting of signs by cemeteries
32-2194.30 Restriction on use of care funds
32-2194.31 Crematories
32-2194.32 Opening and closing of burial places
32-2194.33 Cemetery property owners; address notification reclamation; abandoned cemetery plot

Article 7

Sale of Unsubdivided Lands
32-2195 Notice to commissioner of intention before offering for sale or lease of unsubdivided land; definition
32-2195.01 Power of commissioner to exempt certain unsubdivided land by special order
32-2195.02 Examination of unsubdivided land by commissioner; fee
32-2195.03 Unsubdivided land reports; denial of issuance; order prohibiting sale or lease; investigations; hearings; summary orders
32-2195.04 Sale of lots or parcels of unsubdivided lands; conditions precedent; methods
32-2195.05 Advertising material; contents; order prohibiting use; costs of investigation
32-2195.06 Civil liabilities
32-2195.07 Jurisdiction
32-2195.09 Recordable forms of contracts
32-2195.10 Change of plan after approval by commissioner; notice
32-2195.11 Civil penalties; limitation
32-2195.12 Recording of actions

Article 9

Real Estate Timeshares
32-2197 Definitions
32-2197.01 Creation of timeshare plans; ratio
32-2197.02 Notice of intent to sell; application for timeshare plan public report; authorization for pre‑sales
32-2197.03 Rescission of contract or agreement
32-2197.04 Notification of material change
32-2197.05 Escrow or trust account; agreement; evidence of completion; financial assurance
32-2197.06 Declaration of dedication
32-2197.07 Examination of plan by commissioner; fees
32-2197.08 Issuance of public report by commissioner on timeshare plan; denial of issuance; additional information; use of another state's public report
32-2197.09 Rescindable sale or lease
32-2197.10 Timeshare interest reservations
32-2197.11 Developer supervisory duties
32-2197.12 Blanket encumbrance; lien; alternative assurance
32-2197.13 Hearing on denial of public report
32-2197.14 Investigations; orders; hearings
32-2197.15 Order; appointment of receiver; writ of ne exeat
32-2197.17 Advertising and promotional requirements; telemarketing and promotional employees; presentations and tours, drawings and contests; commissioners authority; disclosures
32-2197.18 Recording of actions
32-2197.19 Civil liabilities; prohibitions; limitations
32-2197.20 Civil penalty
32-2197.21 Payment of finder fees; limits; prohibited activities; records; definition
32-2197.22 Exemptions; disclosures; exempt communications
32-2197.23 Power of commissioner to exempt timeshare plans
32-2197.24 Applicability of article

Article 10

Membership Camping
32-2198 Unlawful offer or sale of membership camping contract
32-2198.01 Application for membership camping public report; signature; amendment
32-2198.02 Issuance of public report; representations prohibited
32-2198.03 Exemptions
32-2198.04 Examination of project by commissioner
32-2198.05 Contracts; cancellation
32-2198.06 Execution of notes; assignment; purchaser's defenses retained
32-2198.08 Denial, suspension or revocation of a public report
32-2198.09 Fees
32-2198.10 Advertising plans; disclosures; lotteries and drawings
32-2198.11 Purchaser's remedies
32-2198.13 Construction of this article
32-2198.14 Advertising availability of campgrounds to campground members; blanket encumbrances





Title 33 and other Laws

ARS 33 - Property
33-1071 - Commercial real estate broker lien; definition
33-1072 - Lien attachment; notice of commercial real estate broker lien; notice to owner
33-1073 - Contents of notice of lien; verification
33-1202 - Definitions
33-1219 - Plat
33-1220 - Exercise of development rights
33-1228 - Termination of condominium
33-1075 - Satisfaction of lien; damages
33-1244 - Transfer of special declarant rights
33-1270 - Department of real estate; enforcement
33-411.01 - Recording real estate documents; indemnification by transferor
33-457 - Fraudulent representation by married person of ability to convey realty; classification
33-1074 - Foreclosure; limitation of action; attorney fees
33-1076 - Discharge of commercial real estate broker's liens; bond; limitations of actions; discharge of surety; judgment
33-1204 - Separate titles and taxation
33-1205 - Applicability of local ordinances, rules and building codes
33-1215 - Contents of declaration
33-1802 - Definitions
33-422 - Land divisions; recording; disclosure affidavit
33-1256 - Lien for assessments; priority; mechanics' and materialmen's liens; applicability
33-1807 - Lien for assessments; priority; mechanics' and materialmen's liens
33-417 - Law governing validity of instruments; recording of instruments valid when executed; validity of instruments recorded prior to October 1, 1913
33-741 - Definitions
33-803 - Trustee of trust deed; qualifications
33-1216 - Leasehold condominiums
33-1260 - Resale of units; information required; applicability; definition
33-1806 - Resale of units; information required; definition
33-1902 - Residential rental property; recording with the assessor; agent designation; civil penalty; fee
33-1903 - Appointment of temporary receiver; term; duties, accounting
33-2001 - Definitions
33-423 - Disclosure; reports; indemnity; applicability; violation; classification

A.R.S. 34 - Public Buildings and Improvements
These statutes concern real estate, but not buying and selling it.

Real estate is also mentioned under the following titles:
(look up these laws at this link - click here)

A.R.S. 6 - Banks and Financial Institutions
6-1301 - Definitions
6-454 - Appraisal of real estate owned
6-811 - Exemptions
6-840 - Prohibitions; definitions
6-852 - Exemptions and permitted activities
6-901 - Definitions
6-906 - Required accounting practices and records; escrow of monies; disclosure
6-909 - Prohibited acts
6-941 - Definitions
6-946 - Required accounting practices and records; refundable deposits; periodic impoundment payments; disclosure
6-947 - Prohibited acts
6-984 - Prohibited acts
6-991 - Definitions
6-991.02 - Prohibited acts

A.R.S. 20 - Insurance
20-1541 - Definitions
20-1564 - Investments
20-1568 - Unearned premium reserve

A.R.S. 28 - Transportation
28-8484 - Military airport disclosure; residential property

A.R.S. 36 - Public Health and Safety
36-1404 - Housing authority; employees

A.R.S. 37 - Public Lands
37-102 - State land department; powers and duties
37-803 - Disposition of real property by state agency

A.R.S. 38 - Public Officers and Employees
38-273 - Recording notice of ownership of real property; lien of judgment

A.R.S. 41 - State Government
41-1491.20 - Residential real estate related transaction; definition
41-1512.01 - Military installation fund; report; definition
41-2178 - Exemptions
41-3012.05 - State real estate department; termination July 1, 2012
41-603 - Powers and duties

A.R.S. 42 - Taxation
42-11001 - Definitions
42-17154 - Attachment of lien to real and personal property, improvements and severed mineral rights

A.R.S. 44 - Trade and Commerce
Article 3.1 - Trade Names
44-1460 - Registration of trade name, title or designation
44-1460.01 - Issuance of certificate; restrictions
44-1460.02 - Effective term of registration; renewal; expiration notice
44-1460.03 - Assignment and recording of rights
44-1460.04 - Public examination of records
44-1460.05 - Exclusive rights; common law rights
44-1460.06 - Electronic filing; acceptance
44-1460.07 - Trade name registration cancellation

A.R.S. 45 - Waters
45-108 - Evaluation of subdivision water supply; definition
45-108.02 - Exemption from adequate water supply requirements for city, town or county based on substantial capital investment; application; criteria; expiration

A.R.S. 47 - Uniform Commercial Code
47-2A309 - Lessor's and lessee's rights when goods become fixtures

A.R.S. 48 - Special Taxing Districts
48-2978 - General powers of board of directors
48-4202 - Formation of district
48-6412 - Exemption from adequate water supply requirements based on substantial capital investment; application; criteria; expiration

A.R.S. 49 - The Environment
49-356 - Water systems; designating lead agency; coordinating council





Arizona Administrative Code

A.A.C. Title 4 (Professions and Occupations), Chapter 28 (State Real Estate Department) sets out the basic rules for record keeping, license requirements, exemptions, commission payments, recovery fund provisions, development rules, processes for public reports for and sale of subdivided and unsubdivided land, etc., and grounds for disciplinary action and hearings.





GTK ("good to know") About A.R.S. Title 32
Professions and Occupations, Chapter 20 "Real Estate"


Article 1 - Real Estate Department
Defines the purpose and administration of the Arizona Real Estate Department.
Appointment, qualifications, duties, etc., of the real estate commissioner.
Members, terms, qualifications, chairman, duties, and meetings of the advisory board.

Article 2 - Licensing
Qualifications and application for licensing brokers and salespersons.
Places of business required, electronic mail, phone numbers, addresses, etc.
Branch offices, designated broker's temporary absence.

Licensing
Applicability of article; exemption
License required of brokers and salespersons, license display requirements.
Application for license as broker or salesperson.
Qualifications of licensees.
Licenses for corporations, limited liability companies or partnerships.
Renewal, reinstatement of licenses.
Real estate schools, courses of study, instructors. certification.

Article 3 - Regulation
How to handle money.
Agreements between broker and employees.
How to collect compensation if agreements broken.
Grounds for denial, suspension or revocation of licenses.
Punishments, fines, consent orders, hearings.
Filing complaints, civil penalties.
Other unlawful acts, unlicensed activity, other violations.
Punishments may range from having to take an extra classes to fines up to $150,000.

Article 4 - Sale of Subdivided Lands
How to lawfully subdivide lands.
Deed restrictions.
Exempt sales and leases.
Lot reservations and requirements, voidable sale or lease.
Subdivision public reports.
Advertising rules and restrictions.
Bond requirements, certificate of deposit.
Changes to subdivision plans.
Delivery of clear title.
Access to land, rescindable sales.
Contract disclosures and disclaimers.
Civil penalties for breaking rules.

Article 5 - Real Estate Recovery Fund
Describes the recovery fund, payments into, what it covers, limitations.
Statute of limitations, investigation, discovery, decisions.
Claimant's right to appeal denial of claim.

Article 7 - Sale of Unsubdivided Lands
Notice to commissioner of intention before offering unsubdivided land for sale or lease.
Unsubdivided land reports.
Sale of unsubdivided lots or parcels.
Requirements and restrictions for advertising.
Recordable forms of contracts, process of recording.
Civil penalties, limitations.





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