2 State Specific

Question 0

Advisory Board

Answer 0

Comprised of 10 members. Term of office is 6 years. Provides commissioner with recommendations based on best interest of public. Provides reports to governor on commissioners performance. Meet once every 3 months.

2 members are brokers with 5 years.
3 members are brokerage with 5 years.
1 must be a property manager broker.
2 subdividers
3 public members not related to a person holding a license.

Question 1

ADRE

Answer 1

Arizona Department of Real Estate. Purpose is to protect the public through licensure and regulation. Real estate brokers must be licensed by the ADRE. Commissioner is appointed by the governor, at the pleasure of the governor.

Question 2

Recovery Fund

Answer 2

ADRE maintains fund for benefit of public for wrongdoing. Never dips below 600k or $10 from agent and $20 from broker upon renewal, not just one time. You have to sued, and lose, and not be able to pay the fine for fund to pay back settlement. Max payout per transaction is $30k. Max individual liability is $90k. Statute of Limitations is 5 years. License is terminated. 2 years until you can reapply. If you ask for reinstatement, you must pay back the fund debt plus interest.

Question 3

Licensing

Answer 3

A license is required when someone, with the intent or upon promise of compensation attempts or performs the services of a licensee, or holds oneself out as a real estate licensee. Class 6 felony. Cemetery and membership camping allow working for 2 brokers.

Question 4

Exemptions for Licensing

Answer 4

FSBO
Property manager of no more than 1 property.
Bank owned property the transactions, like foreclosures
Corporations, like McDonald’s
An executor or Executrix named in the will

Question 5

Did you know?

Answer 5

All licensee must disclose agency before signing any docs when selling.
Arizona does not have reciprocity agreements with any states.
Brokers may work on a referral basis with out of state brokers.
After expiration, pay $10 per month up to a year to reinstate, after a year retake test.
If a brokers license expires, all licenses are severed.
10 day notice for change of address, felony, misdemeanor, restrictions, name change, most everything else.

Question 6

Salesperson Qualifications

Answer 6

Has not had license denied in lash 1 year, or revoked within 2 years preceding application. Is 18. Completed 90 hours and passed school and state exam. Take 6 hour contract writing or contract law.

Question 7

Brokers License Reqirements

Answer 7

3 years of active experience as a licensed salesperson or broker during the 5 years preceding application.
Must pass exam which is exacting and stringent than that of a salesperson.
Must have 3 three hour broker management clinic classes before activating license.

Question 8

Broker Price Opinion

Answer 8

A license authorizes a broker to prepare an opinion as to the price or real estate for the purposes of listing or sale.

Question 9

Advertising

Answer 9

The broker is responsible for accuracy of all advertising. Brokers name must be on home page (entity) without scrolling down regardless of size or computer. Each web page must also show brokers name. Team advertising must use team or group. All team ads must show brokers name.

Question 10

Trust Accounts

Answer 10

Broker does not need one. Broker may have $3k of their own money in account. Salesperson may be signer on account, but may not write commission or property manager checks. Sales trust accounts - deposits ‘no later than the next banking day’. Can be interest bearing with disclosure. Interest must be removed every 12 months.

Question 11

Contracts

Answer 11

Article 26 of AZ constitution allows real estate salespeople and brokers to write contracts without charge. In effect since 1962. Broker must review and initial all contracts submitted by employed licensees within 10 days. All completed transactions are kept by broker for 5 years. Rejected offers kept for 1 year.

Question 12

Spouses

Answer 12

To sell a property both husband and wife must sign contract for community property.

Question 13

Electronic Transactions

Answer 13

In AZ everything can be done electronically. Parties must agree to conduct the transaction via computer.

Question 14

Statute of Frauds

Answer 14

All real estate contracts must be in writing to be considered enforceable except for leases of 1 year or less or broker to broker agreements.

Question 15

Agreements

Answer 15

All agreements must be in writing, and have a beginning and an end date.

Question 16

Bed Bugs

Answer 16

Not applicable for SFR’s.

Question 17

Slum Property

Answer 17

Owners of rental property must submit name, address and phone to county where rental is located. Owner has responsibility to take reasonable steps to deter crime.

Question 18

Subdivisions

Answer 18

An improved lot - A structure will be built within 2 years of the contract date.
Master Plan Community - 2 or more platted subs sharing same CCRs
Subdivided Land - 6 or more parcels all under 36 acres.
Unsubdivided Land - 6 or more parcels over 36 acres but less than 160 acres. 6 month recession without inspection, 7 days with inspection.

Question 19

Subdivided Land Advertising

Answer 19

Cannot advertise land ‘endorsed by the commissioner’ or ‘no risk’.

Question 20

Subdivision Approval Exempt List

Answer 20

The sale or or lease or offer for sale or lease of any lots, parcels or fractional interests in a sub without first obtaining a public report.
The sale or lease of lots of 160 acres or more.
The sale or lease of lots or parcels located in a single platted sub by a subdivider if a public report has been issued within the past 2 years.

Question 21

Public Report

Answer 21

Blessing from the commissioner. Subdivider cannot sell land without public report. Must be kept for 5 years. Must also give potential buyers a public report before contract signing. 3 year voidable contract if public report not shown.

Question 22

Time Shares

Answer 22

Must have license. 7 day recision.

Question 23

Property Taxes

Answer 23

Calendar year. First half is due 10/1, and late 11/1. Second half is due 3/1, and late 5/1. Paid AL VALOREM (on assessed value).
Residential 10%
Vacant Land 16%
Commercial 19%, 18.5% in 2015, and 18% 2016 and beyond.

Question 24

Property Taxes Delinquency

Answer 24

Delinquent rates are 16%. Tax foreclosure sales are held in February. County treasurer holds property as trustee for the state and county. Delinquent taxpayer has 3 years redemption period. TREASURERS DEED is issued to new owner if previous owner does not redeem.

Question 25

Water Rights

Answer 25

No one owns band state controls water. Water doctrine - prior appropriation. 2 water classes, ground and surface. Permit required to drill well.

Question 26

Wetlands

Answer 26

Areas where water covers the soil or is present at or near the surface of the soil all year or varying parts of the year. Less than 1% of Arizona is wetland.

Question 27

ADEQ

Answer 27

Arizona Department of Environmental Quality. In charge of environment.

Question 28

WQARF

Answer 28

Water quality assurance revolving fund sites are the state superfund sites which must be disclosed because it is a material fact according to CIRCLA.

Question 29

Mechanics Liens

Answer 29

LIS PENDENS. (Lawsuit pending) Specific and voluntary. Lawsuit must be filed within 6 months of lien. Lien must be recorded (priority date) 120 days from completion of job including 20 day notice sent to homeowner, which must be in the same county where the work was performed. Contractor must have contract with homeowner. Effective date is day work was started.

Question 30

Errors and Omissions

Answer 30

Not mandatory but recommended. Covers listings or sellings, property managers, estimating market values, counseling clients and referrals.

Question 31

HOA

Answer 31

Within 10 days after receipt of a pending sale notice, seller (less than 50), or association (50 or more units) must provide CCR’s.

Question 32

Affidavit of Property Value

Answer 32

Arizona law requires all buyer and sellers or real property or their agents to complete and attest to this affidavit. Failure is a misdemeanor. Needed at recording of deed.

Question 33

Anti-Deficiency Statutes

Answer 33

1. Property must be a duplex or SFR.
2. Property must be 2.5 acres or less.
3. The loan must be a purchase money mortgage.

Question 34

Affidavit of Disclosure

Answer 34

Deals with unincorporated land. Seller of 5 or fewer parcels (not subdivided) must furnish 7 days before transfer of property.