Arizona Broker Exam Law Flashcards
1
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CHAPTER 1 PROPERTY RIGHTS - PRIVATE AND GOVT.: Bundle of Rights
A
PUEET or TEEUP Possession, Use, Encumbrance, Exclusion. Transfer
2
Q
Corporeal
A
Real Property - Physical or Tangible
3
Q
Incorporeal Attachments
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Hereditaments (rights of inheritance, rights of way, etc.
4
Q
Mineral Rights
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Owner owns - common for buyer to cede to state
5
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Fixture
A
MARIA: Method of attachment, Agreement, Relationship, Intent, Adapability
6
Q
Physical characteristics of Real Property
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Immobility, indestructability, non-homogeneity (no two parcels alike), law of situs (governed by laws where it is located)
7
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Real Property Econimic characteristics
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Scarcity, modification, fixity (frozen, not liquid) situs (location influences value)
8
Q
Transfer of property
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Requires Deed
9
Q
Personal Property
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Chattel or personalty is moveable - tangible and intangible
10
Q
Trade Fixtures
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Personal property - can be removed by tenant before lease expires
11
Q
Right of Emblements
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Gives tenants (farmers) right to harvest money crops that mature after their departure (industrial fruits)
12
Q
Title Transfer of Personal Property
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Requires Bill of Sale - if anchored to earth it is affidavit of affixture
13
Q
Ground or Surface Water in AZ
A
Controlled by Dept. of Water Resources. Groundwater Permit requires to tap into subsurface water
14
Q
Exempt domestic well
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Max. pump capacity of 35 gal/min and water less than 2 acres.Requires Notice of Intent to Drill
15
Q
Surface Water
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Requires user’s permit
16
Q
Riparian Rights
A
Not in AZ i.e. where owners adjacent or abutting bodies of water may use it unimpeded.But does cover ownership - Property adjacent or abutting navigable body of water stops at high water mark. Property next to a non-navigable body extends to low-water line (in desert it is mid-stream)
17
Q
Prior Appropriation
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Downstream property owners may claim water rights by this. Permits issued on a first in time is first in sight basis - ie.earliest applicants served first.
18
Q
Measure for flowing water
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cubic feet/sec - for non-flowing water it is acre foot (43,560 cu. ft.)
19
Q
Government Rights, Regs. and Controls
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PETE - Police Power, Eminent Domain, Taxation, Escheat
20
Q
Zoning
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Regulates structures and uses of property - duty of counties and municipalities. Enforced through building permits.
21
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Basic land use zoning categories
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Residential, Agrilcultural, Planned Area Development. Commercial, Industrial
22
Q
Code enforcement
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Issuance of building permits and Certs. of Occupancy and Inspections.
23
Q
City Planning
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Master Plans to regulate overall community growth
24
Q
Taxation of RE
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State and local jurisdiction not Fed. Govt.
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Property Taxes
Levied Annually, paid twice a year
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Ad Valorem taxes
Based on value of property - Primary lien as if first Monday in Jan. followed by special assessments and other liens in order of recordation.
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Property Tax Periods
Jan. 1-June 30 - Due Oct. 1 and late Nov. 1 or July 1- Dec. 31 due March 1 and late May 1 with 16% interest if late per annum.
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Taxes not paid
Tax Lien for sale in Feb. following owner notification of delinquency
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Tax Lien
Sold at public auction - winner gets "Certificate of Purchase" and pays tax due with interest. Goes to bidder who accepts lowest interest from 16-0%. If no bids Certificate of Purchase issued to state and can be purchased year round by investors.. Property owner has 3 years to redeem or Certificate of Purchase holder may foreclose
30
Special Assessment Taxes
No Ad Valorem - pro rata basis - paid in installments and due Nov. 1 (first half) and May 1 (second half)
31
Tax Appeal
Can appeal classificaiton of property or assessed valuation but not tax itself
32
Escheat
Reversion to state of property after death - usually personal property - state can sell in 5 years if no heirs appear - money into state general fund.
33
CHAPTER 2 - REAL ESTATE INTERESTS AND OWNERSHIP:
| Estate
Degree, quantity, nature and extent of ownership interest in RE. One's legal position of ownership, not the amount of property owned. Must be possessory with ownership measured in terms of duration.
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Freehold Estates
Characterized by property ownership and indeterminate duration. Includes fee estates (inheritable) and life estates (not inheritable)
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Less than Freehold estate
Leasehold Estate - tenants possess but do not own property
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Fee Estate (Freehold) - Fee Simple Absolute
Fee Simple Absolute - wholly owned, transferable and inheritable -most common and complete form
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Fee Estate - Fee Simple Absolute
If stipulations of deed not adhered to by grantee, property can revert to original grantor. Can be Fee Determinable ("as long as..otherwise ownership terminated automatically and reverts to grantor) OR Fee Conditional ("provided that or On the condition that..." which controls function of property and if condition violated, property reverts to grantor or heirs by court action.
Fee Tall - limits heirs to lineal descendants and not legal in AZ
38
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Life Estate (Freehold) - real and PP Less than Fee
Ordinary
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Ordinary - limited to life of owner or to life of designated person - upon death of designated person, estate reverts to grantee or another.
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Life Estate
Future Estate holder - B grants Harry Life Estate. H dies, B gets.
Estate in Reversion - B dies, property reverts to B's heirs when H dies. H can sell, encumber, but not pass to heirs or make waste (damage) as there is always a second future estate to B.
Reversionary Interest - K grants to son A reserving life estate for self - when M dies, property reverts to A but not considered an inheritance.
Remainder Estate - concurrent future estate created by grantor for a third party. J conveys life estate to H and upon H dies, automatically goes to C who is vested remainder.
Pur Autre Vie - (for the life of another). J gives life estate to B for life of M. B has life estate as long as M lives and when M dies, estate ends and revert back to J or go to named vested remainderman. If B dies first, estate continues and goes to B's heirs as Contingent Remainder Interest until M dies.
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Life Estate - Statutory
Dower or Curtesy not in AZ
AZ is community property - spouses share equal interest in property acquired during marriage - separate property acquired before marriage, in inheritance, will or gift is exempt.
41
Homestead Exemption Protection
Protects up to 150,000 in property equity from liens, judgments, bankruptcy but not voluntary liens, mortgages RE taxes or mechanic liens. Covers principle residence not commercial, rental or vacation home. Terminated if move to another state, sell, convert to rental or not primary residence, or abandon.. Can possibly continue for 18 mos. after a sale. One homestead at a time
42
Leasehold Estates - less than freehold
Estate for years - specific time period
Estate from period to period - indefinite no. of periods (usually 30-day segments)
Estate at Will - as long as lessor and tenant wll it. Either can cancel at will
Estate at Sufferance - Runs until landlord takes action like when tenant in arrears - weakest type of estate.
43
Valid lease
Must have landlord signature, intent to "let and demise" (transfer leasehold), time period of occupancy, consideration, landlord's right of reversion where property reverts to lessor at expiration. Possession must be be delivered by landlord and accepted by tenant.
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Gross Lease
Landlord pays taxes, assessments, operating costs out of rent. Usually short-term
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Net Lease
Tenant pays overhead expenses. Usually long-term
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Percentage Lease
Retail - Tenant pays minimum rent against a % of gross sales (monthly sales) whichever greater. Bigger the tenant, smaller the percentage
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Index and Graduated Lease
Use Consumer Price Index or wholesale price index. Start at fixed low rate but increase at intervals. Good for beginning entrepreneurs and landlords seeking tax breaks.
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Ground Lease
One owns land and other owns improvements up to 99 years. Common in commercial
49
Sale and Leaseback
Sells RE but not business and leases back RE on long term net lease. Frees up fixed capital of seller and rent is business expense. Investor has tax shelter.
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Subletting
Renter (lessee) subleases to another (sublessee).who pays lessee and lessee still bound by original lease and responsible to pay lessor.Landlord consent needed
51
Assignment
Renter (assignor) transfers entire interest and contractual obligation to another renter (assignee) who is responsible with landlord to terms of lease.
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Terminating Lease
Expiration
Agreement
Abandonment - if tenant in arrears for 10 days
Total destruction
Condemnation - eminent domain
Merger of leasehold and fee estate through sale, marriage or inheritance
Death of landlord if lease based on life estate
53
Rent terminology
Contract rent - per contract
Economic Rent - what it should rent for
Positive leasehold - contract rent less than economic rent
Negative leasehold - contract rent exceeds economic rent
54
License
Personal permission to perform act on land or property of another. No easement
License has no interest in land itself and is revocable. Terminates upon sale of property or death o either party
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Easement
Non-revocable right which one has in land of another, permitting him use or enjoy land for a specific purpose.
56
Easement Appurtenant
Multiple parcels. Servient tenement is land against which the easement exists. Dominant tenement enjoys continued use of easement since it passes with land - Easement Appurtenant is inseparable from dominant and cannot be conveyed separately
57
Easement in Gross
One parcel - gives one right to use land of another. Cannot be sold, terminates with death of holder if natural person. If held by legal person (corporation) for rights of way may be mortgaged or sold. Not revocable, creates interest in RE unlike a license
58
Creation of Easements
By Express Agreement - usually deeds and contracts. Landowner may have to grant easement if eminent domain (called easement by condemnation)
By Implication - Owner of 2 or more adjacent lots and sells part - grants by implication to grantee all easements necessary for reasonable use of property granted
By Necessity - easement is indispensable to enjoyment of dominant estate
Easement by Prescription - created by open, continuous, exclusive use (10 years). Right lost after 5 years of non-use.
59
Termination of Easement
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Abandonment
Merger
Release
Cessation of the purpose for easement
If owner of easement purchases servient, no more easement as he owns all now
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60
Ownership Holdings (Tenancies)
Tenancy - mode, manner, quality and way that ownership is held
Severalty - one person
Co-tenants - share undivided interest that cannot be separated from whole
61
Types of Tenancies:
| Joint Tenancy
Fee simple, for life, for years or at will. Arises by purchase or grant to 2 or more natural persons.
Unity of Time (vested at same time),
Title (hold by same title vs. Tenants in Common that can take property under several different titles
Interest (equal interest - no JT can have greater interest than other JTs)
Possession (JTs hold same undivided possession of whole and same rights until death of one)
62
Joint Tenancy - Survivorship
Entire tenancy on death of a JT passes to survivors and, at last to last survivor. AZ law abolishes JT right of survivorship at death of JT the share goes to heirs or those named in will but if deed says property goes to surviving grantee the right of survivorship created and realty passes to surviving co-tenants without probate
63
Joint Tenancy Selling
All owners must join as sellers. JT can sell portion of interest they own without consent of other JTs.
New owner joins other JTs as a Tenant in Common due to unity of time not met. AZ Community Property system wants grantees in a JT deed to endorse acceptance individually
64
Termination of Joint Tenancy with ROS
Involuntary or voluntary transfer of title
Sale or conveyance of one JTs interest to third person when only 2 JTs exist
Partition Decree
Sale of land and dividing of proceeds by husband and wife following divorce or separation
Destruction of any of the unities of title
65
Tenancy in Common
2 or more persons with undivided interest which may be voluntarily transferred by alienation, devise, descent and not subject to any right of survivership. Ownership need not be equal.
Interest of each TIC passes under terms of his will. If no will, pass to laws of intestate succession
66
Tenancy in Common Transfer
Terminates interest by transfer to third person creating tenancy in common between new tenant and remaining tenant(S)
67
Community Property
All property acquired during marriage (except gift, devise, descent or earned by one spouse and minor children while living separately) is community property of both. Equal interest.
Community Property with Right of Survivorship transfers title to other spouse upon death of one without probate.
68
Community Property
Title held as "Sole and Separate". If married person acquires title as sale and separate, spouse must sign Disclaimer Deed. Can hold title in a Corp or other entitly (LLC, etc.
69
CHAPTER 3 TRANSFER OF TITLE AND TITLE INSURANCE
| Four methods of transfer to title
Voluntary Alienation by choice (effected through public and private grants
Involuntary Alienation - against owner's will (foreclosure, eminent domain, escheat, adverse possession)
70
Descent
Heirs but no will - Probate court appoints administrator
71
Escheat
No will, no heirs
72
Will
Executor was appointed before death
73
Grantor
Gives the deed (seller)
74
Grantee
Buyer who receives deed
75
Deed in Writing
Statute of Frauds
76
Other requirements of deed
Competent Grantor
Identifiable grantee and status
Granting Clause affirms grantor giving up ownership and what being given up
Habendum Clause - To have and hold - reaffirms extent of ownership being transferred if less than what owned. Granting clause prevails over Habendum.
Legal Description
Exceptions or Reservations - mineral rights exception or reservations for life estate, deed restrictions, zoning
Legal Consideration - Valuable is money, goods, relinquishment. Good Consideration is love and affection (difficult to enforce)
Signature of Grantor (grantee signature not always needed unless deed restriction or as part of joint tenancy
Acknowledgement - identifies correct party and attests grantor's action is voluntary - must be notarized.
Delivery to Grantee - and accepted to be valid. In AZ delivery by escrow agent is legal delivery and unaffected by death of a grantor prior to close of escrow.
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Covenants and Warranties
Present in all conveying deeds
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Covenant of Seizen
Grantor owns and has right to convey
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Covenant of Quiet Enjoyment
Grantor will defend grantee's title against claims by third party and compensate grantee if title turns out to be invalid or defective
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Covenant Against Further Encumbrances
Grantor promises property free from encumbrances other than those revealed or grantee can sue.
81
Warranty of Further Assurance
Special and General Warranty Deeds. Grantor agrees to perfect or correct title if nexessary during their lifetime
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Warranty Forever
General Warranty Deed. Grantor agrees to defend grantee's title against all other claims forever. If third party wrests title, grantee can sue for damages up to value to property at time of sale
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Patent Deed
First deed in chain of title from state or Fed. to individuals
84
Conveying Deed
Bargain and Sale, Special Warranty and General Warranty Deed
85
Bargain and Sale Deeds
Sheriffs Deed (Foreclosure default on Mortgage)
Treasurer's Deed (Foreclosure for non-payment of property taxes)
Executors or Adminstrators Deed (settling of estate by probate after death)
Trustees Deeds (Property placed in trustee hands for disposal due to bankruptcy or Deed of Trust foreclosure
86
Special Warranty Deed
Grantor responsible for defects during his ownership. 3 covenants and Warranty of Further Assurance. Used in land contract transactions and conveyance of property by trustee or relocation
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General Warranty Deed
Grantor fully guarantees clear title but not physical condition - 3 Covenants, 2 Warranties and greatest protection to purchaser
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Quit Claim Deed
Pass only right, title and interest grantor has at time of release, not any subsequent title or interest acquired. To remove defects in title. NO covenants or warranties, little protection to grantees. Can convey but not designed for that - used to release minor interests in RE
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Gift Deed
Between relatives - Good consideration only, hard for grantor to enforce promises
90
Disclaimer Deed
denies legal responsibility. Used in marriage to deny spouse's interest in property to prevent future claims on property. Signed at time of purchase. No Covenants or Warranties
91
Correction Deed
Re-recording of deed to correct mistakes of original deed
92
Fiduciary Deed
When one person represents another to hold or manage money or property. (Attorney, Broker) Confidentiality forever
93
Recordation
Provides constructive notice and establish buyer's priority. Not mandatory and does not guarantee validity of title but lends enforceability of claim to title. Becomes part of Chain of title
94
Affidavit of Value
When deed recorded it must have notarized Affidavit of Value, attests purchase price, signed by buyer, seller or their agent. Sent to county assessor's office for taxes.
95
Affirmation of Value
If for personal or religious reasons, they oppose sworn statements, this can be used in writing instead of Affidavit of Value
96
Involuntary Alienation - Natural Causes
Erosion - Gradual wearing away of soil
Avulsion - Violent, sudden loss of land Acts of God
Accretion - acquire land by soil deposits by movement of rivers, streams and actual soil deposited is Alluvium .
Reliction of receding of water from usual watermark in rivers, streams, littoral bodies of navigable lakes and oceans and recipients own added land.
97
Involuntary Alienation - Operation of Law
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Use Bargain and Sale Deeds:
Property Tax Foreclosure (Treasurer's Deed)
Bankruptcy (Trustee's Deed)
Mortgage Foreclosure ( Sheriff's Deed)
Trustee's Sale (Trustee's Deed)
Judgment Execution (Sheriff's Deed)
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98
Escheat
With no will or heirs, property reverts to state
99
Eminent Domain
Govt acquires through condemnation Proceedings if owner refuses to sell
100
Adverse Possession - rare
Prescriptive suit files against existing property owner. Claimant must prove possession of land was open, hostile (without permission), notorious, active, continuous (Tacking) for 10 years. Suit claims "by right of claim" i.e. person has no legal title but claims the right.
101
Descent
No will. Administrator by probate to closest relatives: spouse, children, parents, siblings, grandparents, uncles and aunts. subject to probate approval.
102
Will
Executor with probate supervising transfer. Exception is JT with ROS.
103
Devise
Real Property in will. Donor is devisor, recipient is devisee.
104
Bequest
Personal Property. Giver is bequestor, recipient is bequestee.
105
Legacy
Cash in will. Giver is legator, receiver is legatee.
106
Types of Wills
Formal - requires signature of maker and 2 witnesses who are not heirs
Holographic - must be handwritten by testator and requires only testator signature
Nuncupative Will - not recognized in AZ for conveyance of real property, oral will when death is imminent
Codicil - Supplement seldom revokes original will, requires signature of maker and two witnesses.
107
Title - Constructive notice
Legal notice to world at large - carries the most weight
108
Title - Actual Notice
Direct knowledge already known - person is living on a specific parcel of land
109
Quality of buyer's claim to title
Recorded Deed and Actual Notice - strongest claim and has constructive notice in recorded deed and actual notice
110
Evidence of Title Seller Offers to Buyer
Abstract of Title and attorney opinion called Certificate of Title
Torrens Certificate - not used in AZ as they have title insurance
Title Insurance - most widespread evidence.
111
Title Insurance -
Covers past instead of future
112
Owner's Policy
Benefit of buyer (vendee) but paid by seller
Issued in amount of purchase price
Remains valid as long as buyer or heirs own property
Void when owner sells property
Insures against error by title company and undiscovered defects like forgeries. Defects must
be taken care of before closing or shown as exception and excluded from title insurance
113
Lender's Policy
ALTA, Broad Form, Extended Coverage for benefit of lender (mortgagee, beneficiary)
Paid by borrower
Paid at close of escrow
Covers more than Owner Policy - rights of parties in possession, unrecorded documents and interests such as mechanics liens, questions of survey and encroachment. Requires physical inspection of property (Owner's policy does not)
Issued in amount of original loan, not purchase price
Valid as long as property is collateral, even if sold and loan assumed by another.
Becomes void when loan paid off
Purpose to ensure lender has enforceable lien against the property
114
Subrogation
Exchange of claim for money waiving future rights, or substitution of one party for another so substitute party has same rights as the former
115
Title Examiner
Employee of Title Co. examines public records
116
Title Plant
Storage for documents
117
Schedule A
Sets forth property to be insured, legal description, name of insured (grantee or lender) type of estate (fee simple, etc.)
118
Schedule B
Standard and special exceptions not covered by policy. Items never covered include property tax, loan being assumed, deed restrictions.
119
CHAPTER 9 HOUSING REGULATIONS AND PROPERTY INSURANCE
| Civil Rights Act of 1866
Banned discrimination of any kind based on race - banned in 1883
120
Fair Housing Act of 1968
Race, color, religion, national origin (except churches, private clubs, private property owners up to a 4-plex)
121
Jones vs. Mayer
1968 - erased exceptions and reaffirms CRA of 1866 prohibiting all racial discrimination, private or public, in sale or rental of property
122
Equal Credit Opportunity Act of 1974
Lendor cannot discriminate against race, color, religion, national origin AND ADDS sex, marital status and age.
123
Housing and Community Development Act of 1974
Forbids discrimination in housing based on sex
124
Steering
Specific Areas HUD-enforced
125
Blockbusting
Minorities into neighborhood - panic selling. Against FHA of 1968
126
Redlining
Refuse to make loans or insurance policies in certain areas (race) regardless of economic qualifications
127
1988 Fair Housing Amendments Act
Adds physically and mentally handicapped plus families with children. Includes alcoholism and AIDS. Excludes drug abusers or persons with prior felony drug convictions.
Apartments built after 3/13/91 to be handicapped-accessible
128
Handicapped- Accessible
Multi-family housing of 4 or re units with elevator or first floor units in other buildings consisting of 4 or more units:
accessible route in and through
Light switches, electrical outlets, thermostats, environmental controls accessible
Reinforcement in bathroom walls to allow later installation of Grab bars
Usable kitchen and bathroom for wheelchairs. Owner's refusal to let handicapped person pay and do modifications is discrimination. Tenant may have to restore at end of lease
129
Protection of Families with children under 18
Cannot charge higher deposit for families with children and all facilities open to children (may have to have adult with them)
130
All Adult Communities
Allowed if all residents are at least 62 or 80% of units occupied by one person at least 55. Until 1995 community had to provide facilities to meet physical, social needs. Deed restrictions stating no one under 55 no longer enforceable unless community qualifies based on exemptions above.
131
1988 Amendments Act
Enforce by administrative law judge within HUD or Fed. Court
132
Administrative Judge Fines
$16,000 first, $37,500 second within 5 years, $65,000 third within 7 years. Can issue injunction. Violations dropped after 7 years.
133
Federal Court
Injunctions can be issued, actual and punitive damages can be awarded with no dollar limit. DOJ can sue if pattern persists, Fines are $25,000 first, $50,000 second, $100,000 subsequent. AZ complaints files with Attorney General Office and mediated or heard in Fed. Court
134
Americans with Disabilities Act 1990 Title 1
Every employer with 15 or more full-time employees
| Reasonable accommodation without undue hardship on business
135
Americans with Disabilities Act 1990 Title 111
Removal of architectural and communications barriers in private owned places of public accommodation and private entities that own, lease or operate such public accommodation.
136
Arizona Residential Landlord and Tenant Act ARLTA
Cannot charge security deposit more than 1 1/2 times normal monthly rent
Must specify what non-refundable amounts are included in cleaning deposit
Not obligated to deposit in interest bearing account
Obligated to maintain fit and safe premises
Must give tenants 2 day notice for remodeling, improvements work
137
Tenants moving in after 1/1/96
Must provide tenant upon move-in with signed copy of lease, Move-in Form showing existing damages, written notice of tenant's right to be present at move-out inspection (except eviction)
138
Effective 1/1/2013
Landlord must provide notice that Tenant can get ARLTA from AZ Dept. of Housing, and Bedbug Educational materials
139
Tenant Responsibilities
Use unit as called for in lease
Abide by Rules and Regs
Grant landlord access with 2 day notice and time is reasonable with tenant
Pay rent when specified or be subject to late charge day 3-6 after due late fee is often a daily percentage
140
When Landlord not complying, tenant remedies:
Failure to deliver possession - money back, terminate lease. Sue landlord within 5 days for failure to deliver possession
Self-help for minor defects - tenant spends up to $300 or half month rent (whichever greater). Landlord has 10 days to make repairs after notified
Failure to supply essential services - like utilities - tenant can move out until service restored and reimbursed for rent or contract for such services
Fire and Casualty - If not caused by renter, can move out until corrected
Constructive Eviction - Renter moves out at no fault of thier own vs. Actual Eviction where tenants at fault
Failure to return security deposit - Landlord can withhold portion for damages but itemized list of damages to tenant. Landlord can be charged double the amount of security deposit wrongfully held if it is not returned within 14 days of tenant demand
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When tenant not in compliance, Landlord remediess
Noncompliance with rental agreement - written notice to tenant specifying acts of breach and rental agreement terminates in 10 days if breach not remedied in 10 days. If matter of health and safety, notice is 5 days to terminate and 5 days to remedy.
Failure to pay - Landlord delivers "Notice to Quit" and if tenant refuses to accept, landlord sends by registered or certified mail. If tenant fails to pick up, considered legally delivered within 5 days
Forcible entry and detainer - Landlord can file with court if rent not paid in 5 days. Court mails "Detainer Document" to tenant ordering premises be vacated
Actual Eviction - Landlord returns to court to ask for Writ of Restitution. Sheriff tapes eviction notice to tenant door. If tenant not out by 5pm, sheriff steps in.
Landlord can keep security deposit and sue for breach but must prove harm and efforts to re-rent failed.
May store tenant property 10 days after abandonment and may apply sale proceeds to rent and mail excess to tenant at last known address. Must hold excess proceeds for tenant for 1 year even if returned as non-deliverable.
Tenant has no right to access of property until fully paid unless needed for work or financial documents.
142
Mobile Homes
Personal Property and cannot be sold by RE agents unless immobilized. Lenders ad landlords required to have non-disturbance clause guaranteeing mobile home tenants renting space and not evicted through foreclosure. In case of foreclosure, tenant bypasses landlord and pays lender directly in Assignment of Rents.
143
Property Management Agreement
Description of Services and Fees, work manager will perform for owner and for how much.
Should establish when relationship ends and on what conditions. Flat fee per service based on time and effort. for income-producing property, could be incentive fee tied to objective standard for increasing revenues resulting from manager's costs.
144
Commissioner Rule 4-28-801
Property Management Agreement in writing, have definite commencement and termination date.
145
Owner Can terminate
If he sells asset, property manager becomes insolvent (bankruptcy laws) or is violating any law or a key employee leaves manager's enploy
146
Trust Account
Payments may be made by licensed sales persons permitted as signors, Accounts can bear interest but does not have to be shared with tenants.
147
Property Manager Other
Monitor tenant activities
Let contractors know he is hired help
If contractor not paid he can file mechanics lien. Owner can sue tenant for breach of contract or Property Manager for mismanagement
Screen prospective tenants for financial reliability
Enforce clear collection policy
148
Condominium
Horizontal rights - no rights above or below premises. Own undivided interest in common areas. May sell to whomever they wish. Possess deed and fee simple title. Taxed and assessed separately based on combined value of their unit and proportionate ownership of common areas. Can be separately foreclosed on. COA usually non-profit but taxed as corporation on rental and investment income
149
Townhouse
Vertical rights everything above and below premises, usually 2 stories. Fee simple title and deed. All common areas owned by HOA. Owners taxed and assessed as individuals.
150
Cooperative
Owned by corporations in which tenants buy stock. Tenants occupy but do not own.
They are proprietors, sharing pro-rata share of corporate expenses including taxes. Can deduct their share of interest and taxes on individual level. If tenant defaults on lease, other tenants must cure the defect. Tenant's interest in co-op and his own unit is undivided. When moves out, Corporation has First right of refusal or approval of new tenant
151
Timeshare
Interval ownership. Owners may possess deed or lease
| Right to rescind within 7 days of signing.
152
CHAPTER 10 LAW OF REAL ESTATE BUSINESS:
| RULES AND REGS. OF REAL ESTATE DEPT,
Legislative Branch - make laws (statutes)
Judicial Branch - court system - interprets laws and decisions are case law
Executive Branch - State level run by Governor and makes commissioner.s rules which apply to every broker and salesperson but not for a FSBO
153
Common Law
How we do things - based on tradition ad court cases
154
Real Estate Commissioner
Appointed by Governor - 5 years experience in banking, title or RE and 3 years in administration - can overlap. May not hold active RE license while commissioner. Formulation of commissioner's rules that apply to all licensees active or not. Issues RE licenses but not take away without formal hearing. RE Dept. obligated to investigate any written and signed complaint. Commissioner may investigate a licensee at any time. Administers Recovery Fund, disseminates educational information (RE Bulletin) and hires/fires RE Dept. employees.
155
RE Advisory Board
Appointed by Governor - 9 members - Advises Commissioner on RE issues and annual evaluation of Commissioner to Governor.. 1/3 of appointments expire every 2 years.
2 brokers from different counties
2 brokers in land sales/subdivisions
2 brokers in residential RE
3 people from public (not licensees)
Meet quarterly - not paid but expenses reimb.
156
Arizona Constitution Article XXVI
Permits licensed active agents and brokers to prepare all RE documents but not legal advice. May not charge fee for document prep.
157
Arizona Statute of Frauds
Requires all RE contracts in writing to be enforceable. Lease of one year or less may be oral and still enforceable
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Conducting RE without license is OK if:
buying and selling own property - no matter how many
Attorney - but if doing RE as a broker, must have RE license
Trustee selling under Deed of Trust
Govt employees carrying out official duties
Guardian, executor, administrator, receiver or any person carrying out court order
Attorney-in-fact as long a POA is for isolated transaction
Property Manager, if managing or leasing only one property at a time
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RE License
Valid 24 months, active license to broker, inactive to Dept. of RE. Must renew every 2 years if active or inactive. Expires last day of month, 24 hours MCE. Intro to Contract Writing is 6 of 24 hours for first renewal
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Broker License
BMC - 9 hours for new candidates prior to license. Valid 2 years, expires end on month , 30 hours MCE. Designated, Self-employed or associate broker . One designated per firm no matter no, of branches.
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Broker Temporary Absence
If unable to act for 24 hours.- Associate broker or salesperson working for broker or designated broker of competing broker In writing, retain paperwork for 1 year. Attach copy to any hire/fire/renewal and send to ADRE. /Not to exceed 30 days. If longer, must relinquish position
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Temporary Brokers License
Winding down - person can be unlicensed. Due to death, disabled, long tern illness, injured, insane, incompetent by court. Spouse, next of kin, other responsible indiv., employee of broker. Cannot e used to continue business- would need to hire new designated broker
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Subdivision Law
Land divided into 6 or more parcels, each less than 36 acres whether improved or unimproved. Part of common plan carved from same parcel or ones that touch along boundaries. Not for land for commercial, agril., retail or transient housing
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Improved land
Structure built or will be built within 2 years. does not mean streets or utilities.
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Unimproved land
not building now or in 2 years
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Public Report
Buyer gets prior to signing contract. 3 years to rescind contract if did not get. Will not get without ingress, egress, marketable title, or if in poor financial condition. Cannot state "no risk", or "endorsed by RE Dept.
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Lot Reservations
May be taken prior to Public Report. Obligates seller to sell but not buyer to buy until they review Public Report. Not more than $5000 per lot. Placed in neutral account in 1 business day. Cannot hold in any broker or trust account. Fully refundable until buyer signs contract.. When issued, must send to buyer within 15 calendar days. 7 days to review and sign contract by buyer. After 7 days, reservation automatically terminates and buyer refunded and seller can sell to another.
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Unsubdivided land
Require Public Reports. Already divided or will be into 6 or more lots. Either improved or unimproved in common plan.Parcels at least 36 acres or more but less than 160 acres
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Affidavit of Disclosure
When Public Report not needed. If property in unincorporated area (not city or town) property not a subdivision, 5 or fewer parcels All properties not just land and residential. MIni-public report. To buyer at least 7 days before closing - buyer has 5 days to rescind. Must be recorded with deed
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Timeshare
selling units of time (Interval - usually 1 week). Public Report needed if 12 or more intervals of time being sold. 7 days to rescind after signing contract and need no reason. If no Public Report, 3 years to rescind after date of contract
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Recission Rights
Not for improved, subdivided land
for unimproved or unsubdivided, if buyer buys sight unseen he has 6 months to rescind contract. If viewed he has 7 days to rescind. If no Public Report, 3 years to rescind
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Exemptions to Public Report
Bulk Sale of 6 or more lots to one buyer in single transaction or sale or lease of 160 acres or more or parcels for commercial, industrial, non-residential
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Trust Account
Broker not required unless hold OPM - may have title company hold it. If Property Management, would likely have Trust Account
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Conversion
Misappropriation of OPM or property - illegal
175
Commingling
Mixing OPM with broker's in same account. Unlawful.
Can have $3000 of own money in trust account to avoid bank charges is not violation
Can be interest bearing - interest can be paid to any party even broker if client agrees.
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Other Facts of Law
Must be displayed. Sales Person licenses have to be available. Commissions property of broker. Broker may pay another legal broker a referral fee even if not AZ licensed. Agent transfers report to Dept. of RE within 10 day.s Licenses never given to salesperson - either with broker or Dept. of RE.
Old broker can pay commission to sales person after they leave if earned while still employed with broker.
Branch office must have separate license and broker must appoint branch office manager either AB or sales person (but SP would have limitations)
Change of address reported within 10 days to Dept. of RE. Selling broker must present offers through listing broker as soon as possible. If cannot reach within 24 hours, can speak directly to seller but get written permission from seller before presenting to seller.
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Administrative Fines
$1000 per infraction of Commissioner's Rules
Practice with license is Felony Class 6 with up to $150,000 and/or jail up to 1 1/2 years
Fines for entities that receive money for unlicensed activity up to $1,000,000 and up to 1 1/2 years in jail for the guilty.
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CHAPTER 11 REAL ESTATE BROKERAGE: LAW OF AGENCY AND PUBLIC PROTECTION
Recovery Fund
Brokers $20 Salesperson $10 when get license
| Balance less than $600,000 at 6/30 each year, same amounts paid at renewal
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Recovery Fund Process
Notify RE Commissioner
Petition court within 5 years of incident
Seek judgment against broker and win
Seek to collect from Broker
If fails, apply to Dept of RE for payment
$30,000 per transaction (one contract)
Max. $90,000 per licensee
Injured party exchanges claim for money paid by state through subrogation of rights
When paid, license of agent terminated.
Not eligible to receive new license until repaid in full plus interest - after 5 years.
Not eligible for claim against recovery fund: Corporations. LLCs, real estate licensees.
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Agent
Authorized by another (principle.client) to act on his behalf (broker in RE transaction)
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Fiduciary
Relationship of Trust and confidence - responsible for money or property of another
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Customer
Unrepresented principle. Work with vs. client you work for. Third party could be escrow agent or another broker - entitled to truthful information and must be treated fairly and honestly
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Cooperating Brokers
Has buyer. No direct agreement with seller. Listing broker is intermediary for offers and payment of compensation offered by seller.
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Special Agent
Performs one specific transaction. Listing broker hired to find buyer
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General Agent
performs variety of transactions for principle on a continuing basis.
Property Manager or salesperson to their broker
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Subagent
Agent in employ of another agent or coop broker. Represent seller
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Dual Agent
agent representing buyer shows listing of another agent licensed with same broker. Salespersons in AZ considered to be extensions of broker.
Prior written informed consent of both parties whether buyer/seller or lessor/lessee
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Attorney in fact
Unlicensed with POA to act on behalf of another in specific transaction.
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Creation of Agency - Voluntary
Expressed/voluntary orally or written. Listings and property management agreements.
If unauthorized person acts as agent, principle can ratify (create) that agency by performing act that acknowledges conduct of the person, such as signing purchase agreement.
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Creation of Agency - Involuntary
Implied as result of acts and conduct. Ostensible as outward appearances imply agency relationship. Can be created out of necessity.
In ostensible agency, if person relies on person misidentified as agent, agency can be created by estoppel which stops principle or ostensible agent from later denying that agency relationship existed. Consumer could be responsible for some of the things you say
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Agent coupled with interest
Agent receives interest in property being listed. Cannot be revoked by principle or terminated upon principle's death.
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Duties of Parties
Loyalty
Confidentiality
Accountability - funds deposited 24-48 hours
Obedience
Disclosure (material fact) - but not death or felony on property, disease that cannot be caught by living in RE, if sex offender lives nearby
Reasonable skill and care - to customer and client
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Employment Agreements
Establishes relationship and rights of broker and principle
| Listing Agreements and Buyer Broker Agreements.
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Open Listing
Several brokers - broker making sell gets paid. If owner sells, brokers not paid. Does not offer cooperation to other brokers, not listed in MLS. Mostly used by builders and contractors
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Exclusive Agency
One broker to list - owner pays commission is broker or coop sells but if seller personally sells, broker not paid. Put in MLS - mostly residentlal
196
Exclusive Right to Sell
One broker - seller pays commission regardless of who sells.
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Net Listing
Owner receives net amount from sale with excess proceeds going to broker. Subject to fraud and owner dissatisfaction. Or broker loses if seller sells too low. Legal in AZ
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Brokerage Commissions
Earned when contract signed.and paid at close of escrow.
Agent who takes seller to court for commission needs evidence properly licensed at time commission earned, agent had signed, written agreement with party responsible for commission and was procuring cause in securing contract (primary contribution)
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Broker Protection Clause
90-day clause protects broker if buyer that broker introduced to seller and seller try to exclude broker. Seller can be taken to court.
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Agency Termination - bilateral
Bilateral agency can be terminated by acts of parties, mutual agreement and completion of purpose (sale of property)
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Agency termination - unilateral
Revocation - seller fires agent - must have cause but not because agent did not find buyer Renunciation - agent fires seller for non-cooperation
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Agency termination -other
Destruction of property, operation of law, like condemnation, eminent domain, zoning changes, bankruptcy or illegality.
Because listings are personal service contracts, death, incompetence or insanity of seller or self-employed broker would terminate agreement
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Listing Requirements per AZ
Identify property being sold but not need legal description
To be valid, need terms and conditions including broker compensation, specific beginning and ending dates with no automatic extension, must be in writing, signed by seller and broker or salesperson. Agent must provide legible copy to each party. Broker must review and initial within 10 days.
Non-assignable unless written agreement from client and broker. Broker can transfer listing to another salesperson. Cannot solicit other broker listings.
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CHAPTER 12 CONTRACTS
| Unilateral Contract
One-sided - one party promises something in exchange for an act (not a promise) from another.
Open Listing, Options, Rights of furst Refusal
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Bilateral Contract
Two-sided where both parties exchange promises to perform acts. Neither party is liable to other until performance or tendering of performance, Most RE contracts
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Expressed Contract
Parties express terms and intentions in written or oral format. Most RE Contracts
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Implied Contract
By acts and conduct.
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Executory vs Executed
Executory not completed,
Executed is completed i.e. close of escrow.
Execute is signing (different from executed)
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Legal Effects of Contracts Valid
Valid - contract agreed to by all parties and meets standards of contract law - legal, binding, enforceable good
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Void
Does not meet criteria for contract law or has illegal intent and thus unenforceable
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Voidable
appears to be legal but fails some legal requirements giving one or both parties right to rescind within a prescribed period of time. Is valid and can be either voidable or enforced. Minor can choose either but adult party has no option.
Or made under duress or undue influence
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Unenforceable
Appears to be valid but cannot be enforced through lawsuit - usually oral. Owner who sells own house when neither he nor buyer knows how to draw up contract.
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Enforceable
Contains all legal requirements and enforceable by at least one of the parties.
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Six Essential Elements for Valid Enforceable RE Contracts
```
In writing
Competent parties
Mutual assent
Legal consideration
Lawful Object
Legal Description
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Steps to Enforceable Contract
Offer - buyer is offeror, Recipient (seller) is offeree
Counteroffer - new offer from offeree, who becomes counter-offeror and offeror becomes counter offeree. Must be in writing.
Acceptance - signed by offeree.
Communication to offeror with copy of accepted offer
Earnest Money - not mandatory for valid contract
but must indicate form of money and where it will be deposited. Immediately deposited.
Buyer gets equitable interest and seller gets claim on earnest money. Broker is trustee to both parties and can turn money over to seller with written consent of buyers.
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Purchase Contract for Sales or Purchase of Real property
Offer + Acceptance + Communication = Contract
Becomes bilateral
Commissioner rules require name of person who prepared offer and give signed copies to all parties immediately with original to broker with earnest deposit. Broker must review in 10 days as proof of licensee supervision. Broker must keep copy of contract for 5 years. Copies of rejected offers must be kept for 1 year.
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Contract status IF
Buyer or seller dies = valid even if both die. Now an obligation of estate
Material facts misrepresented = contract voidable
Property destroyed = contract voidable or unenforceable
Contingency provision not met = contract voidable
Property condemned = contract unenforceable
Broker license suspended or revoked = no effect on contract, Contract between buyer and seller and broker interest is only beneficial
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Contract Clauses/Assignability
Time of Essence
Clear Title Clause -
Assignee vs. Nominee - assignee is third party to whom contractual rights are transferred. Nominee is third party designated to act on behalf of another within certain limits ie. strawman.
Assigned by assignor to natural person or legal entity acting as assignee. Assignee given same title, rights and interest as assignor and is primarily responsibile for performance. Assignor has secondary liability.
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Contract Termination
```
Performance
Expiration of time
Mutual release
Alteration of offer
Impossibility of performance ( death or incapacitation of person that provides service that cannot be duplicated by another or change in law after creation of contract that makes it illegal, Destruction of property
Operation of Law
Acceptance of a Breach
Mutual Mistake
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Breach of contract
Seller can keep earnest money as liquidated damages, seek more money, cancel contract, sue for compensatory damages, sue for specific performance
Buyer can sue for specific performance compelling seller to carry out contract, sue for compensatory damages and retrieve earnest money.
Statute of limitations on suit to force specific performance is 4 years from date of contract.
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Options and First Right of Refusal
Optionor (Seller) and Optionee (buyer) gives buyer right to buy in agreed time period. Unilateral contract . Needs valuable consideration to enforce. buyer can assign rights to third party.
First right of Refusal gives buyer first opportunity to purchase. If third party makes offer, holder of Frist Right can match it. Holder of First Right cannot purchase until owner puts it up for sale or considers offers from third parties (no promise) . vs. option where seller promises to sell to option holder.
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CHAPTER 13 LISTING AND CONTRACT FORMS AND PROCEDURES
Review sample forms
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CHAPTER 15 LEGAL LAND DESCRIPTIONS
Rectangular Survey System
Principle Meridian
Gila and Salt River Meriidian - North and south line
| principle Meridian through initial point
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Principle Base Line
East and west from initial point - perpendicular to principle meridian
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Townships
Contain 6 miles square = 36 square miles - boundary lines 6 miles long and run north-south and east-west.
24 miles perimeter
23,040 acres (640 ac per section
36 sections x 36 sections = 23,040
Quadrangle - every 24 miles - contains 16 townships
Standard Parallels and Guide Meridian
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Range
Strip or column of townships running north and south
227
Tier
Row of townships running east-west
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Location of township
Described in terms of the number of units running north or south of the baseline and east or west of the principle meridian
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Section
Each township divided into 36 sections, approx. 1 mile square and containing 640 acres, 4 miles perimeter.
Numbered 1-36 starting in northeast corner moving alternately right to left then left to right, ending in southeast section.
A section normally marked on ground by 8 monuments - one at each corner and one midway between each corner monument. Exact location of the corner is stamped into a brass cap on top of the monument.
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Quarter Section
Each section divided into quarter sections. Each quarter section (160 acres) is identified by its compass direction - NE, SE, SW, NW.
A quarter section can be divided into quarter-quarters of 40 acres
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Correction lines or check lines
Range lines are adjusted every fourth township (every 24 miles) to maintain townships as close to 6 miles square as possible. Correction lines are absorbed by certain townships along their north and west edges creating "fractional sections". Correction lines are always adjusted on the side of a quadrangle (containing 16 townships) farthest from the initial point. Because of earth's curvature, no township contains exactly 36 square miles.
Fractional Sections = 25 standard (full) and 11 fractional
On west and north side of township
Government lot = government owns part of lot that are affected by river or lake or any land owned by government that keeps you from owning it all.
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Rectangular Survey System
Very easy to describe and locate any one parcel of land since there cannot be another parcel of land with the same identification. It allows land to be described by very small legal subdivisions without actual detailed survey
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N 1/2, NE 1/4, SW 1/4, Section 14, T2N, R3W
| 20 40 160 640
Work backwards = 20 acres
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Multiple parcels different sections -
| "and the" refers to the entire section i.e. 640 acres
```
Indicated the the word "and the"
N1/2, NW1/4, SW1/4 and the
20 40 160 640
NE 1/4, NW1/4, SW1/4, section 10
10 40 160 640
```
20 + 10 = 30 acres
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Multiple Parcels same sections
| ";" also refers to the entire section i.e. 640 acres
Indicated by the symbol ";"
NW1/4, SW1/4;, E1/2, NE 1/4, SE1/4, SW1/4;
40 160 640 5 10 40 160 640
S1/2, N1/2,Section 23
160 320 640
40+5+160 = 205 acres
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Lots
The quarter-sections along the north and west boundaries of a township made irregular by discrepancies of measurements and convergence of the range lines are usually numbered and sold s lots. In sections made fractional by rivers, lakes or other bodies of water, lots are formed bordering on the body of water and numbered consecutively through the section
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Metes and Bounds
Before rectangular survey system was established, all land was described by measurements and boundary markers (usually called metes and bounds descriptions). Still used in US.
US and Canada are only countries that have rectangular systems of survey. Metes and bounds
and used everywhere else.
Description begins at a certain well-defined point and then follows the exterior boundaries by courses (directions) and distances. the starting point is described in relation to a survey marker or monument, or to a natural marker such as mouth of a stream and in plainly marked on the ground. If no marker, latitude and longitude should be given.
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Block and Lot System
For subdivisions and in large cities
The subdivider is required to file a map or plat of a tract with the county clerk in the county where the property is located. The plat shows the type and location of monuments, size of lots and other pertinent information such as the dedication of streets..
239
Recorded plat system
Short and unique means of describing property for tax purposes as well as for transfer
240
Monument Description
Man-made or natural objects - older form of land description - used in rural areas using trees, rocks, etc. to indicate corners and boundary lines of the property. Susceptible to deterioration so more permanent ones are now used (eg. concrete)
241
Recorded Instruments
A deed may describe conveyed property by reference to another instrument containing adequate description, such as a recorded deed or plat. But a proper description of the property in the conveying deed is prefereable to any reference to other document
242
Street Addresses
Most unsatisfactory method of property description. Streets and numbers subject to change and may be duplicated in large metro areas and do not give the precise dimensions or quantity of land conveyed. Should only be used in conjunction with one of the more definitive methods of land description
243
Plat Map
Has lot #, lot dimensions, easements. Does not have buildings or structures
244
Point of beginning; Angles and arcs
Used in Metes and Bounds
245
Rod
5 1/2 yards or 16 1/2 feet
| 1 mile = 320 rods 1760 yards 5280 feet
246
Other measurements
1 sq. ft = 144 sq. inches
1 sq. yd = 9 sq. ft
1 sq. rod = 30 1/4 sq yards 272 1/4 sq ft
1 acre = 160 sq. rods 4840 sq. yards 43,560 sq. ft
1 acre square = 208.71 ft sq.
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CHAPTER 18 DISCLOSURES AND WARRANTIES, LAND DEVELOPMENT AND CONSTRUCTION
Environmental impact statements
Required where public institutions and government property are involved. Financing can hinge on results
248
Environmental Assessments
Disclose toxic hazards - core samples 30 inches deep, testing for radon gas and making title check to see how property used previously
249
Toxic Hazard Cleanup
Owner of record initially responsible
All owners from time problem originated PLUS
seller, lender, builder, developer, real estate agent - almost everyone connected with property can be held liable
250
Dump Areas
In-ground water, landfills, toxic waste dumps, illegal dumps
251
Water Pollution
Contaminated by industrial gases and effluence
252
Asbestos
Insulation once used - buildings more than 30 years old are suspect
Must be disclosed to buyers
surfaces coated with "friable" asbestos begin to deteriorate (crumbles = friable
Friable found in fluffy, sprayed on material used for fire-proofing ceilings or non-friable wallboard (only a problem if broken) or asbestos based pipe (cement like)
253
UFFI
Urea-formaldehyde foam insulation - pumped into spaces between walls of building - eye, nose, throat irritations to cancer
254
ADEQ
Arizona Department of Environmental Quality
255
CPSC
Consumer Product Safety Commission
| banned sale and installation of UFFI in 1982 was later lifted
256
UST
Underground Storage Tanks - registration required if contain regulated substances (petroleum products) that are not already listed as hazardous wastes. Need site assessment and proper closure and disposal of materials
Any tanks now being brought into use or existing as usable will be regulated. Owners certification of $1 million in financial responsibility and/or insurance coverage and have to keep records and report to ADEQ
257
Pesticides, industrial petrochemicals
Level 1 investigation = preliminary assessment
checks with regulatory agencies, title check, visual inspection. hydrology study testing ground water
Level 2 = If toxics found, environmental consultant to study extent of damage
Cleanup - if owner cannot pay, state or federal agencies may pay and owner will repay
Final Title Search to owners since problem originated to get reimbursement
258
WQARF
| CERCLA
Water Quality Assurance Revolving Fund
Comprehensive Environmental Response, Compensation and Liability Act (An EPA superfund
They may pay cleanup to be repaid by owner
259
Agent Responsibility
Cannot be charged for cleanup but could be sued for failure to exercise due diligence
260
Environmental Standards enforced on state level by
ADEQ and Arizona Environmental Quality Act (EQA)
261
Federal penalties
As much as $25,000 per day
262
CERCLA defines 4 categories of responsible parties
Present owners and operators - even if did not cause contamination my still be financially liable
Past owners and operators
Transporters of Hazardous Substances
Generators of hazardous substances
263
SARA amended CERCLA
Created innocent purchaser defense to owner responsibility. Landowner must first demonstrate that at the time bought there are no reason to know that property was contaminated and that all good commercial or customary practice was undertaken to detect the potential for property contamination
264
Standards of Liability
Strict Liability - laws apply regardless of whether intent to pollute or knowledge of the situation was present
Joint and Several - Each party can be make responsible even if other parties are known to have contributed
Retroactive - Owner can be responsible for actions occurring many years before the law
Unending Liability - does not end with transfer of property, but extends as long as problem remains.
265
Builder Warranties
New Homes - 2 year warranty on structure
266
Implied Warranty
Informal, unwritten, legally enforceable for minimum of 6 years
267
Expressed Warranty
Usually written, could be oral, assurance a product is reliable, To be legally enforceable, it must be proven that the product was defective before close of escrow.
Final remedy = lawsuit for both types of warranties
Homes erected by builder without contractor's license may not be listed for 1 year.
Licensee who is aware of latent defect (like defective roof) should consult with seller and procure cost estimates and disclose any repairs to buyer.
268
Construction and Land Development
Page 18-5 and 18-6
269
Sale of Land
Characteristics - tangible, immobile, transferable, indestructible, stable investment, politically divided in finite (limited) supply
```
Taxes on raw land deferred until sold
Financing leveraged (borrowed money)
```
270
Groundwater Rights in AZ
AZ Groundwater Management Code sets limits of who can use groundwater and administered by Department of Water Resources (DWR)
271
INA
Irrigation Non-expansion Areas - 3
272
AMA
Active Management Area 5 in AZ where excessive groundwater overdraft occurring. 80% of state population resides within AMAs
273
Rights or Permits that Allow Groundwater Withdrawal within AMAs
Unless exempt well, must have grandfathered rights or withdrawal permits or service area rights or storage and recovery permits
274
Exempt Well
Max. pump capacity of 36 gal per min. and used for non-irrigation watering less than 2 acres
275
Grandfathered Rights
Irrigation grandfathered right
Type 1 non-irrigation right
Type 2 non-irrigation right - can be sold separately from land or well.
When grandfathered right sold, DWR must be notified
276
4 Theories of Municipal Growth
Multi/nuclei theory - growth tends to coalesce around self-contained areas or villages like Phoenix Village Plan
Wedge sector Theory
Central/axial Theory radiate out
Concentric Zones - circles of 5 zones
277
Buffer Zone
Strips of Land buffering one land use form another, such as residential from industrial. Often playgrounds and parks
278
Interstate Land Sales Full Disclosure Act
1968 - Full and accurate information regarding property to prospective buyers before they decide to buy. If more than 25 lots are advertized Interstate, developer must register with HUD
