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