114 32 Law Book Revised

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Law Book Revised 11.02.2017 Page 1

Arizona Real Estate Laws ........................................................................................................................... 22

CONSTITUTION OF THE STATE OF ARIZONA ....................................................................................... 22

Article 26. RIGHT OF LICENSED REAL ESTATE BROKERS AND SALESMAEN TO PREPARE

INSTRUMENTS INCIDENT TO PROPERTY TRANSACTIONS ............................................................ 22

§ 1. Powers of real estate broker or salesman .................................................................................... 22

Title 32, Chapter 20 REAL ESTATE ........................................................................................................... 22

Article 1 Real Estate Department ............................................................................................................ 22

32-2101. Definitions ............................................................................................................................. 22

32-2102. Administration of chapter by real estate department; purpose ............................................. 28

32-2103. Placement of monies collected; revision of fees .................................................................. 28

32-2104. Real estate advisory board; members; terms; qualifications; compensation; chairman;

duties.................................................................................................................................................... 28

32-2105. Meetings of the state real estate advisory board .................................................................. 29

32-2106. Real estate commissioner; appointment; qualifications ....................................................... 29

32-2107. Powers and duties of commissioner; compensation; administration of department; seal;

revolving fund ....................................................................................................................................... 29

32-2107.01. Recorded disclaimer of unlawful restrictions ................................................................... 30

32-2108. Powers and duties of commissioner to make investigations and require information .......... 30

32-2108.01. License applicants; fingerprint clearance cards; definition .............................................. 31

32-2109. Employment; compensation ................................................................................................. 31

32-2110. Interest of department officer or employee in real estate company prohibited .................... 31

32-2111. Attorney general as legal adviser and representative of commissioner ............................... 31

32-2112. Admissibility of certified copies of department records in evidence ..................................... 31

32-2114. Recorded disclosure for land under a military training route or restricted air space ............ 32

32-2114.01. Military electronics range ................................................................................................. 32

32-2116. Military training routes; contacts ........................................................................................... 33

32-2117. Earth fissure maps; posting; immunity ................................................................................. 33

32-2118. Competition with private enterprise; prohibition ................................................................... 33

32-2119. Consumer education; water supply definitions; map ............................................................ 33

Article 2 Licensing ................................................................................................................................... 34

32-2121. Applicability of article; exemption ......................................................................................... 34

32-2122. License required of brokers and salespersons ..................................................................... 35

32-2123. Application for license as broker or salesperson .................................................................. 36

32-2124. Qualifications of licensees .................................................................................................... 37

32-2125. Licenses for corporations, limited liability companies or partnerships ................................. 39

32-2125.01. Issuance of license; multiple licenses; use ...................................................................... 40

32-2125.02. Nonresident licensees; service of process; employment ................................................ 40

32-2125.03. Confidentiality of licensee's residential address, electronic mail address, residential

telephone number and social security number .................................................................................... 40

32-2126. Place of business required; notice of change in location; failure to give notice as

cancellation of license; signs ............................................................................................................... 41

Law Book Revised 11.02.2017 Page 2

32-2127. Licenses for additional places of business; branch office manager; broker's temporary

absence ............................................................................................................................................... 41

32-2128. Display and possession of license certificate ....................................................................... 41

32-2129. Advance payment of license fees ......................................................................................... 42

32-2130. Renewal of licenses; education requirements; broker licensee renewal as salesperson

licensee ................................................................................................................................................ 42

32-2131. Reinstatement of license ...................................................................................................... 43

32-2132. Fees ...................................................................................................................................... 44

32-2133. Temporary broker's license .................................................................................................. 44

32-2134. Temporary cemetery salesperson's license ......................................................................... 45

32-2134.01. Membership camping salesperson certificate of convenience ........................................ 45

32-2135. Real estate schools; courses of study; instructors; certification ........................................... 45

32-2136. Broker management clinics .................................................................................................. 47

32-2137. Cancellation of license .......................................................................................................... 47

Article 3 Regulation ................................................................................................................................. 47

32-2151. Disposition of funds; trust money deposit requirements ...................................................... 47

32-2151.01. Broker requirements; record keeping requirements; definition ....................................... 48

32-2151.02. Real estate employment agreements; definition ............................................................. 49

32-2152. Action by broker or salesperson to collect compensation .................................................... 49

32-2153. Grounds for denial, suspension or revocation of licenses; letters of concern; provisional

license; retention of jurisdiction by commissioner; definitions ............................................................. 49

32-2153.01. Consent order; terms ....................................................................................................... 52

32-2154. Cease and desist orders; hearing ........................................................................................ 52

32-2155. Restriction on employment or compensation of person as broker or salesperson .............. 52

32-2156. Real estate sales and leases; disclosure ............................................................................. 52

32-2157 Written notice of changes; summary suspensions; hearing; voluntary surrender of license 53

32-2158. Hearing; witnesses; deposition; service of process.............................................................. 53

32-2159. Judicial review; costs; transcript ........................................................................................... 53

32-2160. Filing of complaint by commissioner; prosecution ................................................................ 54

32-2160.01. Civil penalties .................................................................................................................. 54

32-2161. False statements or publications concerning land, subdivision or membership camping

contract for sale or lease; classification; definition .............................................................................. 54

32-2162. Sale of cemetery property for speculation unlawful ............................................................. 55

32-2163. Unlawful acts; out-of-state broker; cooperation agreement ................................................. 55

32-2164. Unlawful subdivision lot sales ............................................................................................... 55

32-2165. Unlicensed activities; violation; classification ....................................................................... 55

32-2166. Activities while incarcerated; violation; classification ........................................................... 56

Article 3.1 Property Management ............................................................................................................ 56

32-2171. Definitions ............................................................................................................................. 56

32-2172. Scope of article ..................................................................................................................... 56

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32-2173. Property management agreements; contents, termination .................................................. 56

32-2174. Property management accounts........................................................................................... 57

32-2175. Property management records; requirements; audits .......................................................... 58

32-2176. Payment of finder fees to apartment tenants; limits; prohibited activities; civil penalty;

definitions ............................................................................................................................................. 58

Article 4 Sale of Subdivided Lands .......................................................................................................... 59

32-2181; Notice to commissioner of intention to subdivide lands; unlawful acting in concert;

exceptions; deed restrictions; definition ............................................................................................... 59

32-2181.01. Power of commissioner to exempt certain subdivisions or fractional interests by special

order ..................................................................................................................................................... 63

32-2181.02. Exempt sales and leases ................................................................................................. 63

32-2181.03. Lot reservations; expiration ............................................................................................. 65

32-2182. Examination of subdivision by commissioner; fee; time limit to determine violation ............ 66

32-2183. Subdivision public reports; denial of issuance; unlawful sales; voidable sale or lease; order

prohibiting sale or lease; investigations; hearings; summary orders ................................................... 66

32-2183.01. Advertising material; contents; order prohibiting use; costs of investigation; drawings or

contests ................................................................................................................................................ 70

32-2183.02. Recording of actions ........................................................................................................ 71

32-2183.03. Civil liabilities ................................................................................................................... 72

32-2183.04. Surety bond requirement; form; cancellation; effective date; certificate of deposit ......... 73

32-2183.05. Military training route disclosure; military electronics range disclosure; residential

property ................................................................................................................................................ 73

32-2183.06. Restricted air space disclosure; residential property ....................................................... 74

32-2184. Change of subdivision plan after approval by commissioner; notice ................................... 74

32-2185. Delivery of clear title by vendor on performance of contract by vendee .............................. 75

32-2185.01. Sale of unimproved lots or parcels; conditions precedent; methods ............................... 75

32-2185.02. Permanent access to subdivided land; rescindable sales ............................................... 76

32-2185.03. Deposit of fees ................................................................................................................. 76

32-2185.06. Contract disclosures; contract disclaimers ...................................................................... 77

32-2185.07. Jurisdiction ....................................................................................................................... 77

32-2185.08. Recordable forms of contracts ........................................................................................ 77

32-2185.09. Civil penalties; limitation .................................................................................................. 77

Article 5 Real Estate Recovery Fund ...................................................................................................... 77

32-2186. Real estate recovery fund; liability limits; definitions ............................................................ 77

32-2187. Payments to real estate recovery fund ................................................................................. 78

32-2188. Statute of limitations; service of summons; application for payment; insufficient monies;

definition ............................................................................................................................................... 78

32-2188.01. Notice of claim to judgment debtor; response ................................................................. 81

32-2188.02. Correction of deficiencies in the application .................................................................... 81

32-2188.03. Investigation and discovery ............................................................................................. 82

32-2188.04. Final decision and order on claim; notice ........................................................................ 82

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32-2188.05. Claimant's right to appeal denial of claim; service of notice of appeal; response; failure to

file response ......................................................................................................................................... 83

32-2189. Management of fund ............................................................................................................. 83

32-2191. Commissioner's standing in court ......................................................................................... 83

32-2192. Subrogation of rights; collection ........................................................................................... 83

32-2193. Waiver of rights ..................................................................................................................... 84

32-2193.01. Effect of article on disciplinary action .............................................................................. 84

32-2193.02. Surety bond requirement; form; cancellation; effective date; certificate of deposit ......... 84

Article 6 Organization and Regulation of Cemeteries ............................................................................. 84

32-2194. Exceptions ............................................................................................................................ 84

32-2194.01. Notice to commissioner of intention to sell cemetery property; exceptions; restrictions . 85

32-2194.02. Examination by commissioner; fee .................................................................................. 86

32-2194.03. Issuance or denial of certificate of authority; voidable sale; order prohibiting sale;

investigations by commissioner; public hearings; summary orders .................................................... 86

32-2194.04. Contract disclosures; contract disclaimers ...................................................................... 88

32-2194.05. Advertising material; contents; order prohibiting use ...................................................... 88

32-2194.06. Records of transactions ................................................................................................... 89

32-2194.07. Recording of actions ........................................................................................................ 89

32-2194.08. Administrative penalties................................................................................................... 89

32-2194.09. Civil liabilities ................................................................................................................... 89

32-2194.10. Change of cemetery plan after approval by commissioner; notice; fee .......................... 90

32-2194.11. Delivery of clear title by cemetery of cemetery plots ....................................................... 90

32-2194.12. Permanent access to cemetery land ............................................................................... 90

32-2194.13. Deposit of fees ................................................................................................................. 90

32-2194.14. Cemetery brokers; disclosures ........................................................................................ 90

32-2194.15. Jurisdiction ....................................................................................................................... 90

32-2194.16. Sale of undeveloped cemetery property .......................................................................... 91

32-2194.17. Transaction of cemetery business ................................................................................... 91

32-2194.18. Application for authority to open and operate cemeteries ............................................... 91

32-2194.19. Investigation of applicant before granting of certificate of authority where needed ........ 91

32-2194.20. Right of cemetery to make rules and regulations ............................................................ 91

32-2194.21. Survey of property; maps and plats ................................................................................. 91

32-2194.22. Filing maps and declaration of dedication ....................................................................... 91

32-2194.23. Nonapplication of law against perpetuities ...................................................................... 91

32-2194.24. Trust fund to be established before certificate of authority granted ................................ 91

32-2194.25. Trust fund to be established before existing cemetery can advertise as endowed-care

cemetery .............................................................................................................................................. 92

32-2194.26. Initial deposit required in endowment-care fund.............................................................. 92

32-2194.27. Restrictive use of income from endowed-care fund; obligation....................................... 92

32-2194.28. Deposit in endowed-care fund from sales ....................................................................... 93

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32-2194.29. Posting of signs by cemeteries ........................................................................................ 93

32-2194.30. Restriction on use of care funds ...................................................................................... 93

32-2194.31. Crematories ..................................................................................................................... 93

32-2194.32. Opening and closing of burial places .............................................................................. 93

32-2194.33. Cemetery property owners; address notification reclamation; abandoned cemetery plot

............................................................................................................................................................. 93

Article 7 Sale of Unsubdivided Lands ...................................................................................................... 94

32-2195. Notice to commissioner of intention before offering for sale or lease of unsubdivided land;

definition ............................................................................................................................................... 94

32-2195.01. Power of commissioner to exempt certain unsubdivided land by special order .............. 96

32-2195.02. Examination of unsubdivided land by commissioner; fee ............................................... 96

32-2195.03. Unsubdivided land reports; denial of issuance; order prohibiting sale or lease;

investigations; hearings; summary orders ........................................................................................... 96

32-2195.04. Sale of lots or parcels of unsubdivided lands; conditions precedent; methods ............... 98

32-2195.05. Advertising material; contents; order prohibiting use; costs of investigation ................. 100

32-2195.06. Civil liabilities ................................................................................................................. 100

32-2195.07. Jurisdiction ..................................................................................................................... 101

32-2195.09. Recordable forms of contracts ...................................................................................... 101

32-2195.10. Change of plan after approval by commissioner; notice ............................................... 101

32-2195.11. Civil penalties; limitation ................................................................................................ 101

32-2195.12. Recording of actions ...................................................................................................... 102

Article 9 Real Estate Timeshares .......................................................................................................... 102

32-2197. Definitions ........................................................................................................................... 102

32-2197.01. Creation of timeshare plans; ratio ................................................................................. 104

32-2197.02. Notice of intent to sell; application for timeshare plan public report; authorization for pre-

sales ................................................................................................................................................... 104

32-2197.03. Rescission of contract or agreement ............................................................................. 106

32-2197.04. Notification of material change ...................................................................................... 106

32-2197.05. Escrow or trust account; agreement; evidence of completion; financial assurance ..... 106

32-2197.06. Declaration of dedication ............................................................................................... 107

32-2197.07. Examination of plan by commissioner; fees .................................................................. 108

32-2197.08. Issuance of public report and amended public report by commissioner on timeshare

plan; denial of issuance; additional information; use of another state's public report ....................... 108

32-2197.09. Rescindable sale or lease ............................................................................................. 112

32-2197.10. Timeshare interest reservations .................................................................................... 112

32-2197.11. Developer supervisory duties ........................................................................................ 113

32-2197.12. Blanket encumbrance; lien; alternative assurance ........................................................ 114

32-2197.13. Hearing on denial of public report ................................................................................. 114

32-2197.14. Investigations; orders; hearings .................................................................................... 114

32-2197.15. Order; appointment of receiver; writ of ne exeat ........................................................... 115

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32-2197.17. Advertising and promotional requirements; telemarketing and promotional employees;

presentations and tours, drawings and contests; commissioner's authority; disclosures ................. 115

32-2197.18. Recording of actions ...................................................................................................... 118

32-2197.19. Civil liabilities; prohibitions; limitations ........................................................................... 118

32-2197.20. Civil penalty ................................................................................................................... 119

32-2197.21. Payment of finder fees; limits; prohibited activities; records; definition ......................... 119

32-2197.22. Exemptions; disclosures; exempt communications ....................................................... 119

32-2197.23. Power of commissioner to exempt timeshare plans ...................................................... 121

32-2197.24. Applicability of article ..................................................................................................... 121

Article 10 Membership Camping ........................................................................................................... 122

32-2198. Unlawful offer or sale of membership camping contract .................................................... 122

32-2198.01. Application for membership camping public report; signature; amendment ................. 122

32-2198.02. Issuance of public report; representations prohibited ................................................... 124

32-2198.03. Exemptions .................................................................................................................... 124

32-2198.04. Examination of project by commissioner ....................................................................... 124

32-2198.05. Contracts; cancellation .................................................................................................. 124

32-2198.06. Execution of notes; assignment; purchaser's defenses retained .................................. 125

32-2198.08. Denial, suspension or revocation of a public report ...................................................... 125

32-2198.09. Fees ............................................................................................................................... 127

32-2198.10. Advertising plans; disclosures; lotteries and drawings .................................................. 127

32-2198.11. Purchaser's remedies .................................................................................................... 128

32-2198.13. Construction of this article ............................................................................................. 128

32-2198.14. Advertising availability of campgrounds to campground members; blanket

encumbrances ................................................................................................................................... 128

Article 11. Administrative Hearings ....................................................................................................... 128

32-2199 Administrative Hearings ....................................................................................................... 128

32-2199.01. Hearing; rights procedures ............................................................................................ 129

32-2199.02. Orders; penalties; disposition ........................................................................................ 129

32-2199.04. Rehearing; appeal ......................................................................................................... 130

32.2199.05. Condominium and planned community hearing office fund .......................................... 130

Arizona Administrative Code, Title 4. Professions and occupations, Chapter 28. State Real Estate

Department................................................................................................................................................ 130

R4-28-101. Definitions ....................................................................................................................... 130

R4-28-102. Document Filing; Computation of Time .......................................................................... 131

R4-28-103. Licensing Time-frames ................................................................................................... 131

R4-28-104. Development Inspection Fee .......................................................................................... 132

Table 1. Time-frames (Calendar Days) ............................................................................................. 133

ARTICLE 3. LICENSURE ...................................................................................................................... 135

R4-28-301. General License Requirements; Non-resident License .................................................. 135

R4-28-302. Employing Broker's License; Non-resident Broker ......................................................... 136

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R4-28-303. License Renewal; Reinstatement; Changes of Personal Information, License, or License

Status; Professional Corporation or Professional Limited Liability Company Licensure; Administrative

Severance .......................................................................................................................................... 139

R4-28-304. Branch Office; Branch Office Manager ........................................................................... 142

R4-28-305. Temporary License, Certificate of Convenience............................................................. 143

R4-28-306. Unlawful License Activity ................................................................................................ 143

ARTICLE 4. EDUCATION ..................................................................................................................... 144

R4-28-401. Prelicensure Education Requirements; Waiver .............................................................. 144

R4-28-402. Continuing Education Requirements; Waiver; Distance Learning.................................. 145

R4-28-403. License Examinations ..................................................................................................... 148

R4-28-404. Real Estate School Requirements, Course and Instructor Approval.............................. 148

R4-28-405. Business Brokerage Specialist Designation ................................................................... 150

ARTICLE 5. ADVERTISING .................................................................................................................. 150

R4-28-502. Advertising by a Licensee ............................................................................................... 150

R4-28-503. Promotional Activities ..................................................................................................... 151

R4-28-504. Development Advertising ................................................................................................ 151

ARTICLE 7. COMPENSATION ............................................................................................................. 152

R4-28-701. Compensation Sharing Disclosure ................................................................................. 152

ARTICLE 8. DOCUMENTS ................................................................................................................... 152

R4-28-802. Conveyance Documents ................................................................................................. 153

R4-28-803. Contract Disclosures ....................................................................................................... 153

R4-28-804. Rescission of Contract .................................................................................................... 153

R4-28-805. Public Report Receipt ..................................................................................................... 154

ARTICLE 11. PROFESSIONAL CONDUCT ......................................................................................... 154

R4-28-1101. Duties to Client ............................................................................................................. 154

R4-28-1102. Property Negotiations ................................................................................................... 155

R4-28-1103. Broker Supervision and Control .................................................................................... 155

PART A. APPLICATION FOR PUBLIC REPORT, CERTIFICATE OF AUTHORITY, OR SPECIAL

ORDER OF EXEMPTION ..................................................................................................................... 156

R4-28-A1201. Development Name; Lot Sales; Applicant.................................................................. 156

R4-28-A1202. Development Map; Location; Land Characteristics ................................................... 157

R4-28-A1203. Flood and Drainage; Land Uses; Adverse Conditions ............................................... 157

R4-28-A1204. Utilities ........................................................................................................................ 158

R4-28-A1205. Water Supply .............................................................................................................. 158

R4-28-A1206. Sewage Disposal ........................................................................................................ 159

R4-28-A1207. Streets and Access .................................................................................................... 159

R4-28-A1208. Flood Protection and Drainage Improvements .......................................................... 160

R4-28-A1209. Common, Community, or Recreational Improvements .............................................. 161

R4-28-A1210. Master Planned Community ....................................................................................... 161

R4-28-A1211. Assurances for Completion and Maintenance of Improvements ............................... 161

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R4-28-A1212. Schools and Services ................................................................................................. 163

R4-28-A1213. Property Owners' Association .................................................................................... 163

R4-28-A1214. Development Use ....................................................................................................... 164

R4-28-A1215. Development Sales .................................................................................................... 164

R4-28-A1216. Title Reports and Encumbrances ............................................................................... 164

R4-28-A1217. ADEQ Approval .......................................................................................................... 165

R4-28-A1218. Property Registrations in Other Jurisdictions ............................................................. 165

R4-28-A1219. Condominium Developments ..................................................................................... 165

R4-28-A1220. Foreign Developments ............................................................................................... 165

R4-28-A1221. Cemetery Developments ............................................................................................ 165

R4-28-A1222. Membership Camping Developments ........................................................................ 165

R4-28-A1223. Affidavit ....................................................................................................................... 165

PART B. GENERAL INFORMATION .................................................................................................... 166

R4-28-B1201. Expedited Registration For Improved Subdivision Lots and Unsubdivided Lands .... 166

R4-28-B1202. Conditional Sales Exemption ..................................................................................... 166

R4-28-B1203. Material Change; Public Report Amendments ........................................................... 166

R4-28-B1204. Cemetery Notice; Amendments ................................................................................. 167

R4-28-B1205. Contiguous Parcels .................................................................................................... 167

R4-28-B1206. Filing with HUD ........................................................................................................... 167

R4-28-B1207. Subsequent Owner ..................................................................................................... 168

R4-28-B1208. Public Report Correction ............................................................................................ 168

R4-28-B1209. Options; Blanket Encumbrances; Releases ............................................................... 168

R4-28-B1210. Earnest Money ........................................................................................................... 168

R4-28-B1211. Recordkeeping ........................................................................................................... 169

ARTICLE 13 ADMINISTRATIVE PROCEDURES................................................................................. 169

R4-28-1302. Service of Pleadings Subsequent to Complaint and Notice ......................................... 169

R4-28-1303. Information Obtained in an Investigation ...................................................................... 169

R4-28-1304. Response; Default ........................................................................................................ 169

R4-28-1305. Notice of Appearance of Counsel ................................................................................. 169

R4-28-1310. Rehearing or Review of Decision; Response; Decision ............................................... 169

R4-28-1313. Correction of Clerical Mistakes ..................................................................................... 170

SUBSTANTIVE POLICY STATEMENTS .................................................................................................. 171

No. 2017.01 Unlicensed Assistants ................................................................................................... 171

No. 2016.01 Acceptable Forms of Payment ...................................................................................... 172

No. 2015.01 Short Title: Instructor Professional Development Requirements .................................. 173

No. 2013.01. Short Title: Multifamily Housing Records Retention .................................................... 175

No. 2012.01. Short Title: Broker Management Clinic Course/Instructor Requirements .................... 176

No. 2010.03. Short Title: Real Estate School Audit Declaration ....................................................... 178

No. 2010.02. Short Title: Distance Learning Guidelines .................................................................... 178

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No. 2010.01. Short Title: Guidance for using Electronic Real Estate Transaction Management and/or

Document Storage Programs ............................................................................................................ 180

No. 2008.06 rev. Short Title: Preventing Mortgage Fraud through Disclosure .................................. 182

No. 2008.05 rev. Short Title: Continuing Education Requirements for Renewal of 4-Year License

(REPEALED effective January 29, 2014) .......................................................................................... 183

No. 2008.04 rev. Short Title: Business Brokers; License Requirement Clarification (REPEALED

effective January 27, 2011) ............................................................................................................... 183

No. 2008.03 rev. Short Title: Acceptable Forms of Payment ............................................................ 183

No. 2008.02 rev. Short Title: Subsequent Owners/Subdivision Disclosure Reports (Public Reports)

(REPEALED effective September 13, 2013). .................................................................................... 183

No. 2008.01 rev. Short Title: Pre-license Education Waiver (REPEALED effective March 3, 2011) 183

No. 2007.18 rev. Short Title: Real Estate Licensee Advertising ........................................................ 183

No. 2007.17. Short Title: Electronic License Certificate Complies with Statutory Requirement ....... 184

No. 2006.16 rev. (REPEALED) .......................................................................................................... 184

No. 2005.15. Short Title: Broker Home Office ................................................................................... 185

No. 2005.14. Short Title: Fair Housing Course Substitute ................................................................. 185

No. 2005.13. Short Title: Agent Responsibility to Client .................................................................... 186

No. 2005.12. Short Title: Continuing Education and the Residential Resale Purchase Contract

(REPEALED effective January 27, 2011) .......................................................................................... 186

No. 2005.11. Short Title: Subdivision Public Report Application Form, Changes ............................. 186

No. 2005.10. Short Title: Electronic Signatures ................................................................................. 187

No. 2005.09 rev. Short Title: Non-commercial Requests to Inspect Department Records & Fees for

Copies ................................................................................................................................................ 187

No. 2005.07. Short Title: Department Investigation of Cases Involving Civil Litigation ..................... 189

No. 2005.06. Short Title: Electronic Record Keeping ........................................................................ 190

No. 2005.05. Short Title: Access to Arizona Real Estate Law Book on the World Wide Web .......... 191

No. 2005.04. Short Title: Unlicensed Assistants ............................................................................... 191

No. 2005.03. Short Title: Disclosure of Licensee’s Home Address ................................................... 192

No. 2005.02. Short Title: Attendance Requirements for Credit & Enforcement ................................ 192

No. 2005.01.Short Title: Acceptable Forms of Payment ................................................................... 193

Title 11, Chapter 8 DEVELOPMENT FEES .............................................................................................. 194

Article 2 Real Estate Transfer Affidavit and Fee ................................................................................... 194

11-1131. Definitions ........................................................................................................................... 194

11-1132. Real estate transfer fee; collection; disposition of proceeds .............................................. 194

11-1133. Affidavit of legal value ......................................................................................................... 194

11-1134. Exemptions ......................................................................................................................... 195

11-1135. Transmitting affidavit or data to county assessor, Arizona state library, archives and public

records and department of revenue ................................................................................................... 196

11-1136. Administrative and enforcement powers of department ..................................................... 196

11-1137. Violations; classification ...................................................................................................... 196

Title 32, Chapter 36 STATE BOARD OF APPRAISAL ............................................................................. 196

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Article 1 General Provisions .................................................................................................................. 196

32-3601. Definitions ........................................................................................................................... 196

32-3602. Applicability of chapter ........................................................................................................ 198

32-3603. Registration, license or certificate use; exception .............................................................. 198

32-3605. Superintendent; duties; powers; immunity ......................................................................... 198

32-3606. Executive director; duties ................................................................................................... 200

32-3607. Fees; use of credit cards .................................................................................................... 200

32-3608. Board of appraisal fund ...................................................................................................... 200

32-3609. Confidential records ............................................................................................................ 201

32-3610. Uniform standards of professional appraisal practice; state standards; exception ............ 201

Article 2 Registration, Licensure, and Certification ............................................................................... 201

32-3611. Registration, licensure and certification process ................................................................ 201

32-3612. Classifications of licensure, registration and certification ................................................... 201

32-3613. Application and qualification requirements for issuance of license .................................... 202

32-3614. Application and qualification requirements for certification ................................................ 202

32-3614.01. Application for registered trainee appraiser certificates ................................................ 202

32-3614.02. Application for supervisory appraiser designation ......................................................... 202

32-3615. Experience requirement for licensure or certification ......................................................... 202

32-3616. Terms of license or certificate............................................................................................. 203

32-3617. Nonresident temporary licensure or certification ................................................................ 203

32-3618. Reciprocity .......................................................................................................................... 203

32-3619. Renewal of license or certificate; fees ................................................................................ 203

32-3620. Basis for denial of a license or certificate ........................................................................... 204

32-3621. Addresses; telephone numbers; notification of change ..................................................... 204

32-3622. Licenses and certificates .................................................................................................... 204

32-3623. Use of term ......................................................................................................................... 204

32-3624. Professional corporations and partnerships ....................................................................... 204

32-3625. Continuing education .......................................................................................................... 205

32-3626. Scarcity determination; resident temporary licenses and certificates; exemption .............. 205

32-3627. Inactive license or certificate status; reactivation application; renewal application and fee;

continuing education .......................................................................................................................... 206

32-3628. Inactive license or certificate status during military duty; reactivation application; renewal

application and fee; continuing education ......................................................................................... 206

Article 3 Regulation ............................................................................................................................... 207

32-3631. Disciplinary proceedings ..................................................................................................... 207

32-3632. Hearing and judicial review ................................................................................................. 208

32-3633. Undue influence; classification ........................................................................................... 208

32-3634. Prohibition against discrimination ....................................................................................... 208

32-3635. Standards of practice .......................................................................................................... 208

32-3636. Contingent fees .................................................................................................................. 209

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32-3637. Retention of records; definition ........................................................................................... 209

32-3638. Violation; classification ....................................................................................................... 209

32-3639. Damages; injunctive relief .................................................................................................. 209

32-3640. Prohibition; indemnification agreement .............................................................................. 209

Article 4 Property Tax Agents ................................................................................................................ 209

32-3651. Definitions ........................................................................................................................... 209

32-3652. Registration; renewal; fees ................................................................................................. 210

32-3653. Property tax agent conduct ................................................................................................. 210

32-3654. Disciplinary actions ............................................................................................................. 210

32-3655. Rules ................................................................................................................................... 211

32-3656. Confidential records ............................................................................................................ 211

Article 5 Appraisal Management Companies ........................................................................................ 211

32-3661. Definitions ........................................................................................................................... 211

32-3662. Registration......................................................................................................................... 212

32-3663. Exemptions ......................................................................................................................... 213

32-3664. Registration forms .............................................................................................................. 213

32-3665. Expiration of registration ..................................................................................................... 213

32-3666. Consent to service of process ............................................................................................ 213

32-3667. Fee; bond ............................................................................................................................ 213

32-3668. Owner requirements ........................................................................................................... 213

32-3669. Controlling person .............................................................................................................. 213

32-3670. Employee requirements ...................................................................................................... 214

32-3671. Agreements with independent appraisers; limitations ........................................................ 214

32-3672. Annual certifications ........................................................................................................... 214

32-3673. Disclosure of fees ............................................................................................................... 214

32-3674. Appraiser independence; prohibitions ................................................................................ 214

32-3675. Payment .............................................................................................................................. 215

32-3676. Appraisal reports; alteration; use ........................................................................................ 215

32-3677. Adjudication of disputes ...................................................................................................... 215

32-3678. Enforcement ....................................................................................................................... 216

32-3679. Disciplinary hearings .......................................................................................................... 216

32-3680. Rule making authority ......................................................................................................... 216

ARIZONA ADMINISTRATIVE CODE, Title 4. Professions and Occupations, Chapter 46. Board of

Appraisal. .................................................................................................................................................. 216

Article 1. General Provisions ................................................................................................................. 216

R4-46-101. Definitions ....................................................................................................................... 216

R4-46-102. Powers of Board ............................................................................................................. 218

R4-46-103. Board Records; Public Access; Copying Fees ............................................................... 218

R4-46-106. Fees ................................................................................................................................ 219

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Article 2 Licensing and Certification ...................................................................................................... 219

R4-46-201. Appraiser Qualification Criteria ....................................................................................... 219

R4-46-202. Application for License or Certificate .............................................................................. 221

R4-46-203. Procedures for Processing Applications ......................................................................... 221

R4-46-204. Appraiser Examinations .................................................................................................. 221

R4-46-205. Issuance of a License or Certificate ............................................................................... 221

R4-46-206. Hearing on Denial of a License or Certificate ................................................................. 222

R4-46-207. Renewal of a License or Certificate ................................................................................ 222

R4-46-209. Replacement License or Certificate ................................................................................ 222

Article 3 Hearings and Disciplinary Proceedings................................................................................... 222

R4-46-301. Complaints; Investigations; Informal Proceedings; Summary Suspensions; Refusal to

Appear ............................................................................................................................................... 222

R4-46-302. Formal Hearing Procedures ............................................................................................ 225

R4-46-303. Rehearing or Review of the Board’s Decisions .............................................................. 225

R4-46-304. Conviction and Judgment Disclosure ............................................................................. 226

R4-46-305. Terms and Conditions of Reapplication After Revocation .............................................. 226

R4-46-306. Complaint Information Availability .................................................................................. 226

Article 4 Standards of Practice .............................................................................................................. 226

R4-46-401. Standards of Appraisal Practice ..................................................................................... 226

Article 5 Course Approval ...................................................................................................................... 227

R4-46-501. Course Approval ............................................................................................................. 227

R4-46-503. Hearing on Denial of Course Approval ........................................................................... 230

Article 6 Property Tax Agents ................................................................................................................ 230

R4-46-601. Standards of Practice ..................................................................................................... 230

R4-46-602. Disciplinary Proceedings; Board Action; Notice Requirements ...................................... 230

Article 7 General Provisions- Fees ........................................................................................................ 230

R4-46-704. Fee .................................................................................................................................. 230

Title 33, Chapter 7 LIENS ......................................................................................................................... 230

Article 10 Commercial Real Estate Broker Liens .................................................................................. 230

33-1071. Commercial real estate broker lien; definition .................................................................... 230

33-1072. Lien attachment; notice of commercial real estate broker lien; notice to owner ................ 231

33-1073. Contents of notice of lien; verification ................................................................................. 232

33-1074. Foreclosure; limitation of action; attorney fees ................................................................... 232

33-1075. Satisfaction of lien; damages .............................................................................................. 232

33-1076. Discharge of commercial real estate broker's liens; bond; limitations of actions; discharge of

surety; judgment ................................................................................................................................ 233

Title 33, Chapter 8 HOMESTEAD AND PERSONAL PROPERTY EXEMPTION .................................... 234

Article 1 Homesteads and Homestead Exemption ................................................................................ 234

33-1101. Homestead exemptions; persons entitled to hold homesteads .......................................... 234

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33-1102. Exemption by operation of law; designation of multiple properties on creditor’s request;

recording ............................................................................................................................................ 234

33-1103. Effective date of homestead exemption; extent of exemption; exceptions ........................ 234

33-1104. Abandonment of homestead; encumbrance of homestead ............................................... 235

33-1105. Sale by judgement creditor of property subject to homestead exemption ......................... 235

Article 2 Personal Property Exemption .................................................................................................. 235

33-1121. Definitions ........................................................................................................................... 235

33-1121.01. Availability of exemptions .............................................................................................. 236

33-1122. Debtor’s property not exempt from process ....................................................................... 236

33-1123. Household furniture, furnishings and appliances ............................................................... 236

33-1124. Food, fuel and provisions ................................................................................................... 236

33-1125. Personal items .................................................................................................................... 236

33-1126. Money benefits or proceeds; exception .............................................................................. 236

33-1127. School equipment ............................................................................................................... 238

33-1128. Fire fighting equipment ....................................................................................................... 238

33-1129. Public property or property of a public character ................................................................ 238

33-1130. Tools and equipment used in a commercial activity, trade, business or profession .......... 238

33-1131. Definition; wages; salary; compensation ............................................................................ 238

33-1132. Waiver of exemption rights void ......................................................................................... 239

33-1133. Other exemption laws ......................................................................................................... 239

Article 3 Exemption From Execution of Foreign Judgement ................................................................. 239

33-1151. Exemption from execution .................................................................................................. 239

33-1152. Recording; effect ................................................................................................................ 239

33-1153. Abandonment of exemption; maintenance of residency .................................................... 239

Title 33, Chapter 9 CONDOMINIUMS ...................................................................................................... 239

Article 1 General Provisions .................................................................................................................. 239

33-1201. Applicability ......................................................................................................................... 239

33-1202. Definitions ........................................................................................................................... 239

33-1203. Variation .............................................................................................................................. 241

33-1204. Separate titles and taxation ................................................................................................ 241

33-1205. Applicability of local ordinances, rules and building codes ................................................ 241

33-1206. Eminent domain .................................................................................................................. 241

33-1207. Severability ......................................................................................................................... 242

Article 2 Creation, Alteration, and Termination of Condominiums ........................................................ 242

33-1211. Creation of condominium .................................................................................................... 242

33-1212. Unit boundaries .................................................................................................................. 242

33-1213. Construction and validity of declaration and bylaws........................................................... 243

33-1214. Description of units ............................................................................................................. 243

33-1215. Contents of declaration ....................................................................................................... 243

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33-1216. Leasehold condominiums ................................................................................................... 244

33-1217. Allocation of common element interests, votes and common expense liabilities ............... 244

33-1218. Limited common elements .................................................................................................. 245

33-1219. Plat ...................................................................................................................................... 245

33-1220. Exercise of development rights .......................................................................................... 245

33-1221. Alterations of units .............................................................................................................. 246

33-1222. Relocation of boundaries between adjoining units ............................................................. 246

33-1223. Subdivision of units ............................................................................................................. 247

33-1224. Easement for encroachments ............................................................................................. 247

33-1225. Use for sale purposes ......................................................................................................... 247

33-1226. Easement to facilitate exercise of special declarant rights ................................................. 247

33-1227. Amendment of declaration .................................................................................................. 247

33-1228. Termination of condominium .............................................................................................. 248

33-1229. Rights of secured lenders ................................................................................................... 249

33-1230. Merger or consolidation of condominiums .......................................................................... 249

Article 3 Management of the Condominium .......................................................................................... 249

33-1241. Organization of unit owners' association ............................................................................ 249

33-1242. Powers of unit owners' association; notice to unit owner of violation ................................. 249

33-1243. Board of directors and officers; conflict; powers; limitations; removal; annual audit;

applicability ........................................................................................................................................ 251

33-1244. Transfer of special declarant rights .................................................................................... 253

33-1245. Termination of contracts and leases of declarant; applicability .......................................... 253

33-1246. Bylaws ................................................................................................................................ 253

33-1247. Upkeep of the condominium ............................................................................................... 254

33-1248. Open meetings; exceptions ................................................................................................ 254

33-1249. Quorums; applicability ........................................................................................................ 256

33-1250. Voting; proxies; absentee ballots; applicability; definition .................................................. 256

33-1251. Tort and contract liability ..................................................................................................... 257

33-1252. Conveyance or encumbrance of common elements .......................................................... 257

33-1252.01. Conveyance of certain real property ............................................................................. 258

33-1253. Insurance ............................................................................................................................ 258

33-1254. Surplus monies ................................................................................................................... 259

33-1255. Assessments for common expenses; applicability ............................................................. 260

33-1256. Lien for assessments; priority; mechanics' and materialmen's liens; applicability ............. 260

33-1257. Other liens affecting the condominium ............................................................................... 261

33-1258. Association financial and other records; applicability ......................................................... 262

33-1259. Association as trustee ........................................................................................................ 262

33-1260. Resale of units; information required; fees; civil penalty; applicability; definition ............... 262

33-1260.01. Rental property; unit owner and agent information; fee; disclosure .............................. 264

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33-1261. Flag display; for sale, rent or lease signs; political signs and activities; applicability

(Amended by Laws 2014, Ch. 83) ..................................................................................................... 265

Article 4 Administration of the Condominium Act .................................................................................. 266

33-1270. Department of real estate; enforcement ............................................................................. 266

Title 33, Chapter 16 PLANNED COMMUNITIES ...................................................................................... 267

Article 1 General Provisions .................................................................................................................. 267

33-1801. Applicability; exemption ...................................................................................................... 267

33-1802. Definitions ........................................................................................................................... 267

33-1803. Assessment limitations; penalties; notice to member of violation ...................................... 267

33-1804. Open meetings; exceptions ................................................................................................ 268

33-1805. Association financial and other records .............................................................................. 270

33-1806. Resale of units; information required; fees; civil penalty; definition ................................... 270

33-1806.01. Rental property; member and agent information; fee; disclosure ................................. 272

33-1807. Lien for assessments; priority; mechanics’ and materialmen’s liens.................................. 273

33-1808. Flag display; political signs; caution signs; for sale, rent or lease signs; political activities 274

33-1810. Board of directors; annual audit.......................................................................................... 275

33-1811. Board of directors; contracts; conflict ................................................................................. 275

33-1812. Proxies; absentee ballots; definition ................................................................................... 276

33-1813. Removal of board member; special meeting ...................................................................... 276

33-1814. Slum property; professional management .......................................................................... 277

33-1815. Association authority; commercial signage ........................................................................ 277

33-1816. Solar energy devices; reasonable restrictions; fees and costs .......................................... 277

33-1817. Declaration amendment; design, architectural committees; review ................................... 278

33-1818. Community authority over public roadways; applicability ................................................... 279

Title 33, Chapter 18 HOMEOWNERS’ ASSOCIATION DWELLING ACTIONS ....................................... 279

Article 1 General Provisions .................................................................................................................. 279

33-2001. Definitions ........................................................................................................................... 279

33-2002. homeowners’ association dwelling actions; conditions ...................................................... 280

33-2003. Applicability ......................................................................................................................... 281

Title 10, Chapter 24 GENERAL PROVISIONS-NONPROFIT CORPORATIONS .................................... 281

Article 1 Short Title ................................................................................................................................ 281

10-3101. Short Title ........................................................................................................................... 281

10-3102. Reservation of power to amend or repeal .......................................................................... 281

Article 2 Filing Documents and Fees-Nonprofit Corporations ............................................................... 281

10-3120. Filing Requirements ............................................................................................................ 281

10-3121. Forms .................................................................................................................................. 282

10-3122. Filing, service and copying fees; public access fund; expedited report filing and access;

same day and next day services ....................................................................................................... 282

10-3123. Effective time and date of document .................................................................................. 284

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10-3124. Correcting filed document; articles of incorporation; application for authority to conduct

affairs ................................................................................................................................................. 284

10-3125. Filing duty of commission ................................................................................................... 284

10-3127. Evidentiary effect of copy of filed document ....................................................................... 285

10-3128. Certificate of good standing ................................................................................................ 285

Article 3 Arizona Corporation Commission ............................................................................................ 285

10-3130. Powers ................................................................................................................................ 285

Article 4 Definitions, Notice, Private Foundations, Judicial Relief and Religious Organizations ........... 285

10-3140. Definitions ........................................................................................................................... 285

10-3141. Notice .................................................................................................................................. 288

10-3150. Private foundations; definition ............................................................................................ 289

10-3160. Judicial relief ....................................................................................................................... 289

10-3180. Religious corporations; constitutional protections .............................................................. 289

Title 10, Chapter 25 INCORPORATION-NONPROFIT CORPORATIONS .............................................. 290

Article 1 Incorporation ............................................................................................................................ 290

10-3201. Incorporators....................................................................................................................... 290

10-3202. Articles of incorporation; violation; classification ................................................................ 290

10-3203. Incorporation ....................................................................................................................... 292

10-3204. Liability for noncorporate transactions ................................................................................ 292

10-3205. Organization of corporation ................................................................................................ 292

10-3206. Bylaws ................................................................................................................................ 292

10-3207. Emergency Bylaws ............................................................................................................. 292

Title 10, Chapter 26 PURPOSES AND POWERS-NONPROFIT CORPORATIONS ............................... 292

Article 1 General Provisions .................................................................................................................. 293

10-3301. Purposes ............................................................................................................................. 293

10-3302. General powers .................................................................................................................. 293

10-3303. Emergency powers ............................................................................................................. 294

10-3304. Validity of actions ................................................................................................................ 294

Title 10, Chapter 27 NAME-NONPROFIT CORPORATIONS .................................................................. 294

Article 1 General Provisions .................................................................................................................. 294

10-3401. Corporate name .................................................................................................................. 295

10-3402. Reserved name .................................................................................................................. 295

10-3403. Registered name ................................................................................................................ 295

Title 10, Chapter 28 OFFICE AND AGENT-NONPROFIT CORPORATIONS ......................................... 296

Article 1 Place of Business and Agent .................................................................................................. 296

10-3501. Known place of business and statutory agent .................................................................... 296

10-3502. Change of known place of business and statutory agent ................................................... 296

10-3503. Resignation of statutory agent ............................................................................................ 296

10-3504. Service on corporation ........................................................................................................ 297

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Title 10, Chapter 29 MEMBERS AND MEMBERSHIP-NONPROFIT CORPORATIONS ........................ 297

Article 1 Admission of Members ............................................................................................................ 297

10-3601. Admission ........................................................................................................................... 297

10-3602. Consideration...................................................................................................................... 297

10-3603. No requirement of members ............................................................................................... 297

Article 2 Types of Memberships-Members’ Rights and Obligations...................................................... 297

10-3610. Difference in rights and obligations of members ................................................................ 297

10-3611. Transfers ............................................................................................................................. 298

10-3612. Member’s liability to third parties ........................................................................................ 298

10-3613. Member’s liability for dues, assessments and fees ............................................................ 298

10-3614. Creditor’s action against member ....................................................................................... 298

Article. 3 Resignation and Termination ................................................................................................. 298

10-3620. Resignation ......................................................................................................................... 298

10-3621. Termination, expulsion and suspension ............................................................................. 298

10-3622. Purchase of memberships .................................................................................................. 299

Article 4 Derivative Suits ........................................................................................................................ 299

10-3630. Definitions ........................................................................................................................... 299

10-3631. Standing .............................................................................................................................. 299

10-3632. Demand .............................................................................................................................. 299

10-3633. Stay of proceedings ............................................................................................................ 300

10-3634. Dismissal ............................................................................................................................ 300

10-3635. Discontinuance or settlement ............................................................................................. 300

10-3636. Payment of expenses ......................................................................................................... 300

10-3637. Applicability to foreign corporations .................................................................................... 301

Article 5 Delegates ................................................................................................................................ 301

10-3640. Delegates ............................................................................................................................ 301

Title 10, Chapter 30 MEMBERS' MEETINGS AND VOTING-NONPROFIT CORPORATIONS .............. 301

Article 1 Meetings and Action Without Meetings ................................................................................... 301

10-3701. Annual and regular meetings; exceptions .......................................................................... 301

10-3702. Special meeting .................................................................................................................. 301

10-3703. Court ordered meeting; costs; attorney fees ...................................................................... 302

10-3704. Action by written consent; definition ................................................................................... 302

10-3705. Notice of meeting ................................................................................................................ 303

10-3706. Waiver of notice .................................................................................................................. 303

10-3707. Record date; determining members entitled to notice and vote ......................................... 303

10-3708. Action by written ballot ........................................................................................................ 304

Article 2 Voting ...................................................................................................................................... 304

10-3720. Members’ list for meeting ................................................................................................... 304

10-3721. Voting entitlement generally ............................................................................................... 305

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10-3722. Quorum requirements ......................................................................................................... 305

10-3723. Voting requirements ........................................................................................................... 305

10-3724. Proxies ................................................................................................................................ 305

10-3725. Cumulative voting for directors ........................................................................................... 306

10-3726. Other methods of electing directors ................................................................................... 306

10-3727. Corporation’s acceptance of votes ..................................................................................... 306

Article 3 Voting Agreements of Trusts ................................................................................................... 307

10-3730. Voting trusts ........................................................................................................................ 307

10-3731. Voting agreements ............................................................................................................. 307

10-3732. Member agreements .......................................................................................................... 307

Title 10, Chapter 31 DIRECTORS AND OFFICERS-NONPROFIT CORPORATIONS ........................... 309

Article 1 Board of Directors.................................................................................................................... 309

10-3801. Requirement for and duties of board .................................................................................. 309

10-3802. Qualifications of directors ................................................................................................... 309

10-3803. Number of directors ............................................................................................................ 309

10-3804. Election, designation and appointment of directors ........................................................... 309

10-3805. Terms of directors generally ............................................................................................... 309

10-3806. Staggered terms for directors ............................................................................................. 310

10-3807. Resignation of directors ...................................................................................................... 310

10-3808. Removal of directors elected by members or directors ...................................................... 310

10-3809. Removal of designated or appointed directors ................................................................... 311

10-3810. Removal of directors by judicial proceeding ....................................................................... 311

10-3811. Vacancy on board ............................................................................................................... 311

10-3812. Compensation of directors .................................................................................................. 311

Article 2 Meetings and Action of the Board ........................................................................................... 311

10-3820. Regular and special meetings ............................................................................................ 312

10-3821. Action without meeting ....................................................................................................... 312

10-3822. Call and notice of meetings ................................................................................................ 312

10-3823. Waiver of notice .................................................................................................................. 312

10-3824. Quorum and voting ............................................................................................................. 312

10-3825. Committees of the board .................................................................................................... 313

Article 3 Standards of Conduct .............................................................................................................. 314

10-3830. General standards for directors .......................................................................................... 314

10-3833. Liability for unlawful distributions ........................................................................................ 314

Article 4 Officers .................................................................................................................................... 315

10-3840. Officers ............................................................................................................................... 315

10-3841. Duties and authority of officers ........................................................................................... 315

10-3842. Standards of conduct for officers ........................................................................................ 315

10-3843. Resignation and removal of officers ................................................................................... 316

Law Book Revised 11.02.2017 Page 19

10-3844. Contract rights of officers .................................................................................................... 316

10-3845. Officers’ authority to execute documents ........................................................................... 316

Article 5 Indemnification ........................................................................................................................ 316

10-3850. Definitions ........................................................................................................................... 316

10-3851. Authority to indemnify ......................................................................................................... 317

10-3852. Mandatory indemnification .................................................................................................. 317

10-3853. Advance for expenses ........................................................................................................ 318

10-3854. Court ordered indemnification ............................................................................................ 318

10-3855. Determination and authorization of indemnification ........................................................... 318

10-3856. Indemnification of officers ................................................................................................... 319

10-3857. Insurance ............................................................................................................................ 319

10-3858. Application of article ........................................................................................................... 319

Article 6 Director’s Conflicting Interest Transactions ............................................................................. 319

10-3860. Definitions ........................................................................................................................... 319

10-3861. Judicial action ..................................................................................................................... 320

10-3862. Directors’ action; definition ................................................................................................. 321

10-3863. Members’ action; definition ................................................................................................. 321

10-3864. Conflict of interest policy; exceptions ................................................................................. 322

Title 10, Chapter 33 AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS-NONPROFIT

CORPORATIONS ..................................................................................................................................... 322

Article 1 Articles of Incorporation ........................................................................................................... 322

10-11001. Authority to amend ........................................................................................................... 322

10-11002. Amendment by board of directors .................................................................................... 323

10-11003. Amendment by board of directors and members ............................................................. 323

10-11004. Class voting by members on amendments ...................................................................... 324

10-11006. Articles of amendment ...................................................................................................... 324

10-11007. Restated articles of incorporation ..................................................................................... 324

10-11008. Amendment pursuant to reorganization ........................................................................... 325

10-11009. Effect of amendment and restatement ............................................................................. 325

Article 2 Bylaws ..................................................................................................................................... 325

10-11020. Amendment by board of directors .................................................................................... 325

10-11021. Amendment by board of directors or members ................................................................ 325

10-11022. Class voting by members on amendments ...................................................................... 326

10-11023. Bylaw increasing quorum or voting requirement for members ......................................... 326

10-11024. Bylaw increasing quorum or voting requirement for directors .......................................... 326

Article 3 Articles of Incorporation and Bylaws ....................................................................................... 326

10-11030. Approval by third persons ................................................................................................. 326

10-11031. Amendment terminating members or redeeming or canceling memberships .................. 326

Title 10, Chapter 34 MERGERS AND OTHER RESTRUCTURING TRANSACTIONS-NONPROFIT

CORPORATIONS ..................................................................................................................................... 326

Law Book Revised 11.02.2017 Page 20

Article 1 General Provisions .................................................................................................................. 326

10-11101. Definitions ......................................................................................................................... 326

10-11102. Entity restructuring transactions ....................................................................................... 327

10-11103. Action on plan ................................................................................................................... 327

10-11105. Statement of merger or interest exchange; publication .................................................... 328

10-11108. Requests, devises and gifts .............................................................................................. 328

Title 10, Chapter 35 SALE OF ASSETS-NONPROFIT CORPORATIONS .............................................. 328

Article 1 General Provisions .................................................................................................................. 328

10-11201. Sale of assets in regular course of activities and mortgage of assets ............................. 328

10-11202. Sale of assets other than in regular course of activities ................................................... 328

Title 10, Chapter 35.1 HOSPITAL AND COMMUNITY HEALTH CENTER MERGERS AND OTHER

TRANSACTIONS ...................................................................................................................................... 330

Article 1 General Provisions .................................................................................................................. 330

10-11251. Definitions ......................................................................................................................... 330

10-11252. Scope; included transactions; excluded transactions ...................................................... 331

10-11253. Public hearing; notice; requirements; summary report ..................................................... 331

10-11254. Applicability ....................................................................................................................... 332

Title 10, Chapter 36 DISTRIBUTIONS-NONPROFIT CORPORATIONS ................................................. 332

Article 1 General Provisions .................................................................................................................. 332

10-11301. Prohibited distributions ..................................................................................................... 332

10-11302. Authorized distributions .................................................................................................... 332

Title 10, Chapter 37 DISSOLUTION-NONPROFIT CORPORATIONS .................................................... 333

Article 1 Voluntary Dissolution ............................................................................................................... 333

10-11401. Dissolution by incorporators or directors and third persons ............................................. 333

10-11402. Dissolution by directors and third persons ....................................................................... 333

10-11403. Articles of dissolution ........................................................................................................ 334

10-11404. Revocation of dissolution .................................................................................................. 334

10-11405. Effect of dissolution .......................................................................................................... 334

10-11406. Known claims against dissolved corporation .................................................................... 335

10-11407. Unknown claims against dissolved corporation................................................................ 335

Article 2 Administrative Dissolution ....................................................................................................... 336

10-11420. Grounds for administrative dissolution ............................................................................. 336

10-11421. Procedure for and effect of administrative dissolution ..................................................... 336

10-11422. Reinstatement following administrative dissolution .......................................................... 337

Article 3 Judicial Dissolution .................................................................................................................. 337

10-11430. Grounds for judicial dissolution......................................................................................... 337

10-11431. Procedure for judicial dissolution ...................................................................................... 338

10-11432. Receivership ..................................................................................................................... 338

10-11433. Decree of dissolution ........................................................................................................ 338

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Article 4 Miscellaneous .......................................................................................................................... 338

10-11440. Deposit with department of revenue ................................................................................. 338

Title 10, Chapter 38 FOREIGN CORPORATIONS-NONPROFIT CORPORATIONS .............................. 339

Article 1 Grant of Authority .................................................................................................................... 339

10-11501. Authority to conduct affairs required ................................................................................. 339

10-11502. Consequences for conducting affairs without authority .................................................... 339

10-11503. Application for certificate of authority ............................................................................... 340

10-11504. Delivery of changes; changes requiring amendment to application for authority ............. 340

10-11505. Effect of grant of authority ................................................................................................ 341

10-11506. Corporate name of foreign corporation ............................................................................ 341

10-11507. Known place of business and statutory agent of foreign corporation .............................. 342

10-11508. Change of known place of business or statutory agent of foreign corporation ................ 342

10-11509. Resignation of statutory agent of foreign corporation ...................................................... 342

10-11510. Service on foreign corporation ......................................................................................... 343

Article 2 Withdrawal ............................................................................................................................... 343

10-11520. Withdrawal of foreign corporation ..................................................................................... 343

10-11521. Withdrawal by directors or members; foreign corporations .............................................. 344

Article 3 Revocation of Certificate of Authority ...................................................................................... 344

10-11530. Grounds for revocation ..................................................................................................... 344

10-11531. Procedure for and effect of revocation; reinstatement ..................................................... 345

Title 10, Chapter 39 RECORDS AND REPORTS-NONPROFIT CORPORATIONS ............................... 346

Article 1 Records ................................................................................................................................... 346

10-11601. Corporate records ............................................................................................................. 346

10-11602. Inspection of records by members; applicability............................................................... 346

10-11603. Scope of inspection rights; charge ................................................................................... 347

10-11604. Court ordered inspection .................................................................................................. 347

10-11605. Limitations on use of membership list; applicability ......................................................... 348

Article 2 Reports .................................................................................................................................... 348

10-11620. Financial statements for members ................................................................................... 348

10-11621. Report of indemnification to members .............................................................................. 348

10-11622. Annual report .................................................................................................................... 348

10-11623. Statement of bankruptcy or receivership; interrogatories before subsequent incorporation;

violation; classification; definition ....................................................................................................... 349

Article 3 Miscellaneous Provisions ........................................................................................................ 350

10-11630. Certificate of good standing; license and registration renewal ......................................... 350

10-11631. Civil liability for false statements ...................................................................................... 350

10-11632. Interrogatory or signature violations; corporate records; classification ............................ 350

10-11633. Interrogatories by the commission ................................................................................... 350

10-11634. information disclosed by interrogatories ........................................................................... 351

Law Book Revised 11.02.2017 Page 22

10-11635. Certified copies received in evidence ............................................................................... 351

10-11636. Civil liability for false or misleading filings; exceptions ..................................................... 351

Title 10, Chapter 40 TRANSITION PROVISIONS-NONPROFIT CORPORATIONS ............................... 351

Article 1 General Provisions .................................................................................................................. 351

10-11701. Application to existing domestic corporations .................................................................. 351

10-11702. Application to qualified foreign corporations ..................................................................... 352

This Real Estate Law Book is intended for use solely as a desk reference tool and should not be used as

a substitute for the Arizona Revised Statutes.

Arizona Real Estate Laws

CONSTITUTION OF THE STATE OF ARIZONA

Article 26. RIGHT OF LICENSED REAL ESTATE BROKERS AND SALESMAEN 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.

Title 32, Chapter 20 REAL ESTATE

Article 1 Real Estate Department

32-2101. Definitions

In this chapter, unless the context otherwise requires:

1. "Acting in concert" means evidence of collaborating to pursue a concerted plan.

2. "Advertising" means the attempt by publication, dissemination, exhibition, solicitation or

circulation, oral or written, or for broadcast on radio or television to induce directly or indirectly

any person to enter into any obligation or acquire any title or interest in lands subject to this

chapter including the land sales contract to be used and any photographs, drawings or artist's

presentations of physical conditions or facilities existing or to exist on the property. Advertising

does not include:

(a) Press releases or other communications delivered to newspapers, periodicals or other

news media for general information or public relations purposes if no charge is made by

the newspapers, periodicals or other news media for the publication or use of any part of

these communications.

(b) Communications to stockholders as follows:

(i) Annual reports and interim financial reports.

(ii) Proxy materials.

(iii) Registration statements.

(iv) Securities prospectuses.

(v) Applications for listing of securities on stock exchanges.

(vi) Prospectuses.

(vii) Property reports.

Law Book Revised 11.02.2017 Page 23

(viii) Offering statements.

3. "Affiliate" means a person who, directly or indirectly through one or more intermediaries,

controls, is controlled by or is under common control with the person specified.

4. "Associate broker" means a licensed broker employed by another broker. Unless otherwise

specifically provided, an associate broker has the same license privileges as a salesperson.

5. "Barrier" means a natural or man-made geographical feature that prevents parcels of land from

being practicably, reasonably and economically united or reunited and that was not caused or

created by the owner of the parcels.

6. "Blanket encumbrance" means any mortgage, any deed of trust or any other encumbrance or

lien securing or evidencing the payment of money and affecting more than one lot or parcel of

subdivided land, or an agreement affecting more than one lot or parcel by which the subdivider

holds the subdivision under an option, contract to sell or trust agreement. Blanket encumbrance

does not include taxes and assessments levied by public authority.

7. "Board" means the state real estate advisory board.

8. "Broker", when used without modification, means a person who is licensed as a broker under

this chapter or who is required to be licensed as a broker under this chapter.

9. "Business broker" means a real estate broker who acts as an intermediary or agent between

sellers or buyers, or both, in the sale or purchase, or both, of businesses or business

opportunities where a lease or sale of real property is either a direct or incidental part of the

transaction.

10. "Camping site" means a space designed and promoted for the purpose of locating any trailer,

tent, tent trailer, pickup camper or other similar device used for camping.

11. "Cemetery" or "cemetery property" means any one, or a combination of more than one, of the

following in a place used, or intended to be used, and dedicated for cemetery purposes:

(a) A burial park, for earth interments.

(b) A mausoleum, for crypt or vault entombments.

(c) A crematory, or a crematory and columbarium, for cinerary interments.

(d) A cemetery plot, including interment rights, mausoleum crypts, niches and burial

spaces.

12. "Cemetery broker" means a person other than a real estate broker or real estate salesperson

who, for another, for compensation:

(a) Sells, leases or exchanges cemetery property or interment services of or for another,

or on the person's own account.

(b) Offers for another or for the person's own account to buy, sell, lease or exchange

cemetery property or interment services.

(c) Negotiates the purchase and sale, lease or exchange of cemetery property or

interment services.

(d) Negotiates the purchase or sale, lease or exchange, or lists or solicits, or negotiates a

loan on or leasing of cemetery property or interment services.

13. "Cemetery salesperson" means a natural person who acts on the person's own behalf or

through and on behalf of a professional limited liability company or a professional corporation

engaged by or on behalf of a licensed cemetery or real estate broker, or through and on behalf of

a corporation, partnership or limited liability company that is licensed as a cemetery or real estate

broker, to perform any act or transaction included in the definition of cemetery broker.

14. "Commissioner" means the state real estate commissioner.

15. "Common promotional plan" means a plan, undertaken by a person or a group of persons

acting in concert, to offer lots for sale or lease. If the land is offered for sale by a person or group

of persons acting in concert, and the land is contiguous or is known, designated or advertised as

a common unit or by a common name, the land is presumed, without regard to the number of lots

covered by each individual offering, as being offered for sale or lease as part of a common

promotional plan. Separate subdividers selling lots or parcels in separately platted subdivisions

within a master planned community shall not be deemed to be offering their combined lots for

sale or lease as part of a common promotional plan.

16. "Compensation" means any fee, commission, salary, money or other valuable consideration

for services rendered or to be rendered as well as the promise of consideration whether

contingent or not.

Law Book Revised 11.02.2017 Page 24

17. "Contiguous" means lots, parcels or fractional interests that share a common boundary or

point. Lots, parcels or fractional interests are not contiguous if they are separated by either of the

following:

(a) A barrier.

(b) A road, street or highway that has been established by this state or by any agency or

political subdivision of this state, that has been designated by the federal government as

an interstate highway or that has been regularly maintained by this state or by any

agency or political subdivision of this state and has been used continuously by the public

for at least the last five years.

18. "Control" or "controlled" means a person who, through ownership, voting rights, power of

attorney, proxy, management rights, operational rights or other rights, has the right to make

decisions binding on an entity, whether a corporation, a partnership or any other entity.

19. "Corporation licensee" means a lawfully organized corporation that is registered with the

Arizona corporation commission and that has an officer licensed as the designated broker

pursuant to section 32-2125.

20. "Department" means the state real estate department.

21. "Designated broker" means the natural person who is licensed as a broker under this chapter

and who is either:

(a) Designated to act on behalf of an employing real estate, cemetery or membership

camping entity.

(b) Doing business as a sole proprietor.

22. "Developer" means a person who offers real property in a development for sale, lease or use,

either immediately or in the future, on the person's own behalf or on behalf of another person,

under this chapter. Developer does not include a person whose involvement with a development

is limited to the listing of property within the development for sale, lease or use.

23. "Development" means any division, proposed division or use of real property that the

department has authority to regulate, including subdivided and unsubdivided lands, cemeteries,

condominiums, timeshares, membership campgrounds and stock cooperatives.

24. "Employing broker" means a person who is licensed or is required to be licensed as a:

(a) Broker entity pursuant to section 32-2125, subsection A.

(b) Sole proprietorship if the sole proprietor is a broker licensed pursuant to this chapter.

25. "Fractional interest" means an undivided interest in improved or unimproved land, lots or

parcels of any size created for the purpose of sale or lease and evidenced by any receipt,

certificate, deed or other document conveying the interest. Undivided interests in land, lots or

parcels created in the names of a husband and wife as community property, joint tenants or

tenants in common, or in the names of other persons who, acting together as part of a single

transaction, acquire the interests without a purpose to divide the interests for present or future

sale or lease shall be deemed to constitute only one fractional interest.

26. "Improved lot or parcel" means a lot or parcel of a subdivision upon which lot or parcel there

is a residential, commercial or industrial building or concerning which a contract has been entered

into between a subdivider and a purchaser that obligates the subdivider directly, or indirectly

through a building contractor, to complete construction of a residential, commercial or industrial

building on the lot or parcel within two years from the date on which the contract of sale for the lot

is entered into.

27. "Inactive license" means a license issued pursuant to article 2 of this chapter to a licensee

who is on inactive status during the current license period and who is not engaged by or on behalf

of a broker.

28. "Lease" or "leasing" includes any lease, whether it is the sole, the principal or any incidental

part of a transaction.

29. "License" means the whole or part of any agency permit, certificate, approval, registration,

public report, charter or similar form of permission required by this chapter.

30. "License period" means the two year period beginning with the date of original issue or

renewal of a particular license and ending on the expiration date, if any.

31. "Licensee" means a person to whom a license for the current license period has been granted

under any provision of this chapter, and, for purposes of section 32-2153, subsection A, shall

include original license applicants.

Law Book Revised 11.02.2017 Page 25

32. "Limited liability company licensee" means a lawfully organized limited liability company that

has a member or manager who is a natural person and who is licensed as the designated broker

pursuant to section 32-2125.

33. "Lot reservation" means an expression of interest by a prospective purchaser in buying at

some time in the future a subdivided or unsubdivided lot, unit or parcel in this state. In all cases, a

subsequent affirmative action by the prospective purchaser must be taken to create a contractual

obligation to purchase.

34. "Master planned community" means a development that consists of two or more separately

platted subdivisions and that is either subject to a master declaration of covenants, conditions or

restrictions, is subject to restrictive covenants sufficiently uniform in character to clearly indicate a

general scheme for improvement or development of real property or is governed or administered

by a master owner's association.

35. "Member" means a member of the real estate advisory board.

36. "Membership camping broker" means a person, other than a salesperson, who, for

compensation:

(a) Sells, purchases, lists, exchanges or leases membership camping contracts.

(b) Offers to sell, purchase, exchange or lease membership camping contracts.

(c) Negotiates or offers, attempts or agrees to negotiate the sale, purchase, exchange or

lease of membership camping contracts.

(d) Advertises or holds himself out as being engaged in the business of selling, buying,

exchanging or leasing membership camping contracts or counseling or advising

regarding membership camping contracts.

(e) Assists or directs in the procuring of prospects calculated or intended to result in the

sale, purchase, listing, exchange or lease of membership camping contracts.

(f) Performs any of the foregoing acts as an employee or on behalf of a membership

camping operator or membership contract owner.

37. "Membership camping contract" means an agreement offered or sold in this state evidencing

a purchaser's right or license to use the camping or outdoor recreation facilities of a membership

camping operator and includes a membership that provides for this use.

38. "Membership camping operator" means an enterprise, other than one that is tax exempt

under section 501(c)(3) of the internal revenue code of 1986, as amended, that solicits

membership paid for by a fee or periodic payments and has as one of its purposes camping or

outdoor recreation including the use of camping sites primarily by members. Membership

camping operator does not include camping or recreational trailer parks that are open to the

general public and that contain camping sites rented for a per use fee or a mobile home park.

39. "Membership camping salesperson" means a natural person who acts on the person's own

behalf or through and on behalf of a professional limited liability company or a professional

corporation engaged by or on behalf of a licensed membership camping or real estate broker, or

by or on behalf of a corporation, partnership or limited liability company that is licensed as a

membership camping or real estate broker, to perform any act or participate in any transaction in

a manner included in the definition of membership camping broker.

40. "Partnership licensee" means a partnership with a managing general partner who is licensed

as the designated broker pursuant to section 32-2125.

41. "Permanent access", as required under article 4 of this chapter, means permanent access

from the subdivision to any federal, state or county highway.

42. "Perpetual or endowed-care cemetery" means a cemetery wherein lots or other burial spaces

are sold or transferred under the representation that the cemetery will receive "perpetual" or

"endowed" care as defined in this section free of further cost to the purchaser after payment of

the original purchase price for the lot, burial space or interment right.

43. "Perpetual-care" or "endowed-care" means the maintenance and care of all places where

interments have been made of the trees, shrubs, roads, streets and other improvements and

embellishments contained within or forming a part of the cemetery. This shall not include the

maintenance or repair of monuments, tombs, copings or other man-made ornaments as

associated with individual burial spaces.

44. "Person" means any individual, corporation, partnership or company and any other form of

multiple organization for carrying on business, foreign or domestic.

Law Book Revised 11.02.2017 Page 26

45. "Private cemetery" means a cemetery or place that is not licensed under article 6 of this

chapter, where burials or interments of human remains are made, in which sales or transfers of

interment rights or burial plots are not made to the public and in which not more than ten

interments or burials occur annually.

46. "Promotion" or "promotional practice" means advertising and any other act, practice, device or

scheme to induce directly or indirectly any person to enter into any obligation or acquire any title

or interest in or use of real property subject to this chapter, including meetings with prospective

purchasers, arrangements for prospective purchasers to visit real property, travel allowances and

discount, exchange, refund and cancellation privileges.

47. "Real estate" includes leasehold-interests and any estates in land as defined in title 33,

chapter 2, articles 1 and 2, regardless of whether located in this state.

48. "Real estate broker" means a person, other than a salesperson, who, for another and for

compensation:

(a) Sells, exchanges, purchases, rents or leases real estate, businesses and business

opportunities or timeshare interests.

(b) Offers to sell, exchange, purchase, rent or lease real estate, businesses and business

opportunities or timeshare interests.

(c) Negotiates or offers, attempts or agrees to negotiate the sale, exchange, purchase,

rental or leasing of real estate, businesses and business opportunities or timeshare

interests.

(d) Lists or offers, attempts or agrees to list real estate, businesses and business

opportunities or timeshare interests for sale, lease or exchange.

(e) Auctions or offers, attempts or agrees to auction real estate, businesses and business

opportunities or timeshare interests.

(f) Buys, sells, offers to buy or sell or otherwise deals in options on real estate,

businesses and business opportunities or timeshare interests or improvements to real

estate, businesses and business opportunities or timeshare interests.

(g) Collects or offers, attempts or agrees to collect rent for the use of real estate,

businesses and business opportunities or timeshare interests.

(h) Advertises or holds himself out as being engaged in the business of buying, selling,

exchanging, renting or leasing real estate, businesses and business opportunities or

timeshare interests or counseling or advising regarding real estate, businesses and

business opportunities or timeshare interests.

(i) Assists or directs in the procuring of prospects, calculated to result in the sale,

exchange, leasing or rental of real estate, businesses and business opportunities or

timeshare interests.

(j) Assists or directs in the negotiation of any transaction calculated or intended to result

in the sale, exchange, leasing or rental of real estate, businesses and business

opportunities or timeshare interests.

(k) Incident to the sale of real estate, businesses and business opportunities negotiates

or offers, attempts or agrees to negotiate a loan secured or to be secured by any

mortgage or other encumbrance upon or transfer of real estate, businesses and business

opportunities or timeshare interests subject to section 32-2155, subsection C. This

subdivision does not apply to mortgage brokers as defined in and subject to title 6,

chapter 9, article 1.

(l) Engages in the business of assisting or offering to assist another in filing an application

for the purchase or lease of, or in locating or entering upon, lands owned by the state or

federal government.

(m) Claims, demands, charges, receives, collects or contracts for the collection of an

advance fee in connection with any employment enumerated in this section, including

employment undertaken to promote the sale or lease of real property by advance fee

listing, by furnishing rental information to a prospective tenant for a fee paid by the

prospective tenant, by advertisement or by any other offering to sell, lease, exchange or

rent real property or selling kits connected therewith. This shall not include the activities

of any communications media of general circulation or coverage not primarily engaged in

Law Book Revised 11.02.2017 Page 27

the advertisement of real estate or any communications media activities that are

specifically exempt from applicability of this article under section 32-2121.

(n) Engages in any of the acts listed in subdivisions (a) through (m) of this paragraph for

the sale or lease of other than real property if a real property sale or lease is a part of,

contingent on or ancillary to the transaction.

(o) Performs any of the acts listed in subdivisions (a) through (m) of this paragraph as an

employee of, or in behalf of, the owner of real estate, or interest in the real estate, or

improvements affixed on the real estate, for compensation.

(p) Acts as a business broker.

49. "Real estate sales contract" means an agreement in which one party agrees to convey title to

real estate to another party upon the satisfaction of specified conditions set forth in the contract.

50. "Real estate salesperson" means a natural person who acts on the person's own behalf or

through and on behalf of a professional limited liability company or a professional corporation

engaged by or on behalf of a licensed real estate broker, or by or on behalf of a limited liability

company, partnership or corporation that is licensed as a real estate broker, to perform any act or

participate in any transaction in a manner included in the definition of real estate broker subject to

section 32-2155.

51. "Sale" or "lease" includes every disposition, transfer, option or offer or attempt to dispose of or

transfer real property, or an interest, use or estate in the real property, including the offering of the

property as a prize or gift if a monetary charge or consideration for whatever purpose is required.

52. "Salesperson", when used without modification, means a natural person who acts on the

person's own behalf or through and on behalf of a professional limited liability company or a

professional corporation licensed under this chapter or any person required to be licensed as a

salesperson under this chapter.

53. "School" means a person or entity that offers a course of study towards completion of the

education requirements leading to licensure or renewal of licensure under this chapter.

54. "Stock cooperative" means a corporation to which all of the following apply:

(a) The corporation is formed or used to hold title to improved real property in fee simple

or for a term of years.

(b) All or substantially all of the shareholders of the corporation each receive a right of

exclusive occupancy in a portion of the real property to which the corporation holds title.

(c) The right of occupancy may only be transferred with the concurrent transfer of the

shares of stock in the corporation held by the person having the right of occupancy.

55. "Subdivider" means any person who offers for sale or lease six or more lots, parcels or

fractional interests in a subdivision or who causes land to be subdivided into a subdivision for the

subdivider or for others, or who undertakes to develop a subdivision, but does not include a public

agency or officer authorized by law to create subdivisions.

56. "Subdivision" or "subdivided lands":

(a) Means improved or unimproved land or lands divided or proposed to be divided for

the purpose of sale or lease, whether immediate or future, into six or more lots, parcels or

fractional interests.

(b) Includes a stock cooperative, lands divided or proposed to be divided as part of a

common promotional plan and residential condominiums as defined in title 33, chapter 9.

(c) Does not include:

(i) Leasehold offerings of one year or less.

(ii) The division or proposed division of land located in this state into lots or

parcels each of which is or will be thirty-six acres or more in area including to the

centerline of dedicated roads or easements, if any, contiguous to the lot or

parcel.

(iii) The leasing of agricultural lands or apartments, offices, stores, hotels, motels,

pads or similar space within an apartment building, industrial building, rental

recreational vehicle community, rental manufactured home community, rental

mobile home park or commercial building.

(iv) The subdivision into or development of parcels, plots or fractional portions

within the boundaries of a cemetery that has been formed and approved

pursuant to this chapter.

Law Book Revised 11.02.2017 Page 28

(v) A sale or lease of a lot, parcel or fractional interest that occurs ten or more

years after the sale or lease of another lot, parcel or fractional interest if the other

lot, parcel or fractional interest is not subject to this article and is treated as an

independent parcel unless, upon investigation by the commissioner, there is

evidence of intent to subdivide.

57. "Timeshare" or "timeshare property" means real property ownership or right of occupancy in

real property pursuant to article 9 of this chapter. For the purposes of this chapter, a timeshare is

not a security unless it meets the definition of a security under section 44-1801.

58. "Trustee" means:

(a) A person designated under section 32-2194.27 to act as a trustee for an endowment-

care cemetery fund.

(b) A person holding bare legal title to real property under a subdivision trust. A trustee

shall not be deemed to be a developer, subdivider, broker or salesperson within this

chapter.

59. "Unimproved lot or parcel" means a lot or parcel of a subdivision that is not an improved lot or

parcel.

60. "Unsubdivided lands":

(a) Means land or lands divided or proposed to be divided for the purpose of sale or

lease, whether immediate or future, into six or more lots, parcels or fractional interests

and the lots or parcels are thirty-six acres or more each but less than one hundred sixty

acres each, or that are offered, known or advertised under a common promotional plan

for sale or lease, except that agricultural leases shall not be included in this definition.

(b) Includes any land that is sold that would otherwise constitute the sixth lot, parcel or

fractional interest if the sale occurs ten or more years after the earliest of the previous

five sales and if all of the sales consist of property that was originally contained within the

same parcel that is thirty-six acres or more and less than one hundred sixty acres.

32-2102. Administration of chapter by real estate department; purpose

This chapter shall be administered by the state real estate department under the direction of the real

estate commissioner. The purpose of the department in administering this chapter is to protect the public

interest through licensure and regulation of the real estate profession in this state.

32-2103. Placement of monies collected; revision of fees

A. The department shall deposit, pursuant to sections 35-146 and 35-147, all monies collected under the

provisions of this chapter in the state general fund unless otherwise prescribed by law.

B. Each year the commissioner shall revise all fees collected under this chapter within the limits

prescribed by this chapter in such a manner that the revenue derived from such fees equals at least

ninety-five per cent but not more than one hundred ten per cent of the anticipated appropriated budget for

the department for the succeeding fiscal year. If the revenue derived from the fees exceeds one hundred

ten per cent of the anticipated appropriated budget for the department for the succeeding fiscal year, the

commissioner shall lower the fees in the succeeding year in proportion to the excess.

32-2104. Real estate advisory board; members; terms; qualifications; compensation; chairman;

duties

(Amended by Laws 2014, Ch. 74)

A. The real estate advisory board is established composed of ten members who are appointed by the

governor. The term of office of each member is six years, and the terms of three members expire on

January 31 of each odd numbered year. Appointment to fill a vacancy occurring other than by expiration

of term shall be filled by appointment for the unexpired portion of the term only.

B. The membership of the board shall consist of:

1. Two members, each of whom is a real estate broker with at least five years of brokerage

experience in this state. Not more than one member shall be appointed from any one county.

2. Three members, two of whom have been engaged in residential real estate brokerage for the

five years immediately preceding appointment, and one of whom has been engaged in multifamily

residential rental property management with a real estate broker license for the five years

immediately preceding appointment.

Law Book Revised 11.02.2017 Page 29

3. Two members who are primarily engaged in subdividing real property.

4. Three public members who are not related within the third degree of consanguinity or affinity to

any person holding a broker's or salesperson's license from this state.

C. Members of the board shall receive no compensation but shall be reimbursed for subsistence

expenses pursuant to section 38-624 and travel expenses pursuant to section 38-623.

D. The board annually shall select from its membership a chairperson for the board.

E. The board shall provide the commissioner with such recommendations as it deems necessary and

beneficial to the best interests of the public. The board shall also provide recommendations on specific

questions or proposals as the board deems necessary or as requested by the commissioner.

F. The board annually shall present to the governor an evaluation of the performance of the real estate

commissioner and the real estate department.

G. Not more than five members of the board from any one county may serve concurrently.

32-2105. Meetings of the state real estate advisory board

A. The board shall meet for the transaction of business not less than once each quarter-year at a place

within the state it designates. The board may hold other meetings it deems advisable upon five days'

written notice of the time and place of the meeting, signed by the commissioner or a majority of the

members of the board.

B. A majority of the board shall constitute a quorum. A vacancy on the board shall not impair the rights or

powers of the remaining members.

32-2106. Real estate commissioner; appointment; qualifications

A. The real estate commissioner shall be appointed by the governor, pursuant to section 38-211. The real

estate commissioner shall serve at the pleasure of the governor.

B. To be a candidate for the position of real estate commissioner a person shall have at least five years'

experience in the real estate industry, title insurance industry, banking or mortgage broker industry and

three years' administrative experience and shall not at the date of acceptance of appointment be

financially interested in any real estate or brokerage firm, nor act as a broker, and salesman or agent

therefor except through a trust over which the applicant has no control.

32-2107. Powers and duties of commissioner; compensation; administration of department; seal;

revolving fund

A. The commissioner shall have charge of the department with power to administer it in accordance with

the provisions of and to carry out the purposes of this chapter. The commissioner shall adopt a seal

which shall bear the words "real estate commissioner, state of Arizona", which shall be used for the

authentication of proceedings of the department and the official documents thereof. The commissioner's

principal office shall be at the state capitol. The commissioner may have branch offices the commissioner

deems necessary in other cities.

B. The commissioner shall receive compensation as determined pursuant to section 38-611.

C. The commissioner shall prepare and cause to be produced and circulated among the licensees and

the general public educational matter the commissioner deems helpful and proper for the guidance and

assistance of both licensees and the public. The commissioner may assess a fee for each of these

educational products that does not exceed a level reasonably estimated to be sufficient to recover

production and distribution costs.

D. In cooperation with industry educators, content experts and other professionals, the commissioner may

develop, sponsor or hold educational seminars and workshops for the benefit of licensees.

E. A real estate department education revolving fund is established consisting of monies received from

the sale of educational matter under subsection C of this section and grants of monies to be used in the

production of educational products. Monies in the fund shall be used for the printing of a compilation of

real estate laws and rules and other educational publications and for other educational efforts the

commissioner deems helpful and proper for the guidance and assistance of licensees and the public,

including sponsoring and holding educational seminars or workshops for educators and other licensees.

The department shall establish the revolving fund as a separate account. The department shall make a

full accounting of its use to the department of administration annually or as required by the department of

administration. Expenditures from the fund and reimbursement to the fund shall be as prescribed by rules

of the department of administration. Monies received in the real estate department education revolving

Law Book Revised 11.02.2017 Page 30

fund are not subject to reversion, except that all monies in the fund in excess of twenty-five thousand

dollars at the end of the fiscal year revert to the state general fund.

F. The commissioner shall adopt rules, in accord with this chapter, as the commissioner deems

necessary to carry out this chapter.

G. The commissioner may approve standardized legal forms for use in the sale or lease of real estate for

the purpose of recognizing compliance of the forms with this chapter and the rules adopted pursuant to

this chapter.

32-2107.01. Recorded disclaimer of unlawful restrictions

A. The commissioner shall execute and record in the office of the county recorder in each county in this

state a document that disclaims the validity and enforceability of certain restrictions and covenants. The

document shall contain a disclaimer in substantially the following form:

It is the law of this state that any covenants or restrictions that are based on race, religion, color, disability

status or national origin are invalid and unenforceable. If the invalid covenant or restriction is contained in

a document that is recorded in this county, it is hereby declared void.

B. The document that is executed and recorded by the commissioner shall include the legal description

specified by title 11, chapter 1, article 1 for the appropriate county.

C. This section does not affect any other covenant, condition or restriction.

32-2108. Powers and duties of commissioner to make investigations and require information

A. The commissioner on the commissioner’s own motion may, and upon a verified complaint in writing

shall, investigate the actions of any natural person or entity engaged in the business or acting in the

capacity of a broker, salesperson or developer and may at any time examine the books and records used

in connection with the business insofar as the commissioner reasonably believes the books or records

pertain to the transfer, sale, rental, lease, use or management of real property. In connection with an

investigation, the commissioner or the commissioner's representative may take testimony and may

examine and copy documents and other physical evidence that relate to the investigation. If necessary,

the commissioner or the commissioner's representative may issue subpoenas to compel the testimony of

witnesses and the production of documents and other evidence. If a person refuses to comply with a

subpoena, the commissioner or the commissioner’s representative may apply to the superior court for an

order to compel compliance.

B. The commissioner shall establish a certification and enforcement unit that is charged with investigative

duties relevant to the rules of the commissioner and the laws of this state, including applications for

certification, investigations and enforcement and other duties as the commissioner prescribes.

C. The commissioner may require any additional information and documents that are reasonably

necessary to determine the good moral character of an applicant for or holder of a license or public report

or renewal or amendment of a license or public report. For the purposes of this subsection, "applicant" or

"holder" means a person and, if an entity, any officer, director, member, manager, partner, owner, trust

beneficiary holding ten per cent or more beneficial interest, stockholder owning ten per cent or more stock

and person exercising control of the entity. The information may include:

1. Prior criminal records.

2. A valid fingerprint clearance card issued pursuant to section 41-1758.03.

3. An affidavit setting out whether the applicant or holder has:

(a) Been convicted of a felony or a misdemeanor.

(b) Had any business or professional license denied, suspended or revoked or had any

other disciplinary action taken or administrative order entered against the applicant or

holder by any regulatory agency.

(c) Had a public report denied or suspended.

(d) Been permanently or temporarily enjoined by order, judgment or decree from

engaging in or continuing any conduct or practice in connection with the sale or purchase

of real estate, cemetery property, time-share intervals, membership camping

campgrounds or contracts or securities or involving consumer fraud or the racketeering

laws of this state.

(e) Had any adverse decision or judgment entered against the applicant or holder arising

out of the conduct of any business in or involving a transaction in real estate, cemetery

Law Book Revised 11.02.2017 Page 31

property, time-share intervals