Real Estate Statutes Flashcards
1
Q
What does constitutional law regulates?
A
government actions
supreme source of law
applicable in every state and basis for each states constitution
2
Q
can state constitution supersede or conflict wit the U.S. Constitution
A
NO
3
Q
Statutory law is what
A
Regulates individual or private action
inferior to constitutional law
cant conflict or supersede constitutional rights
4
Q
Federal law is enacted by who
A
by the congress and include areas of mortgage lending, environmental laws and civil rights and is part of statutory law
5
Q
who are state laws enacted by
A
state government and include real property professional licensure and agency laws
part of statutory law
6
Q
Administrative laws do what
A
govern the creation and operation fof public regulatory agencies (boards, commissions, departments)
7
Q
Administrative laws are enacted by who
A
administrative agencies, which are governmental bodies of the city, county, state or federal government
Administrative laws do not conflict or supersede with statutory laws
8
Q
Who makes decisions about ordinances
A
include zoning and building codes, are allowed by the state and enacted by local government within the state. They may not conflict with state or federal law.
which is part of administrative laws
9
Q
What is case law
A
10
Q
A
10
Q
key note of constitutional law and statutory laws
A
constitutional laws is the supreme source of law in the US and it’s applicable in every state
Each state has its own constitution that based on the US constitution
Statutory laws, which can be either federal (enacted by congress) or state (enacted by state) laws/statutes.
11
Q
Where do real estate laws come from
A
Federal law (including constitutional law, statutory law, administrative lawas and case laws) and state laws (Arizona state constitution, arizona revised statues and arizona administrative code
12
Q
The Arizona state consitiution is second only to the US constitution in authority when it comes to what?
A
Arizona laws
13
Q
Within a state, the state constitution represents the highest legal authority and may then enact state statues that apply to whom
A
everyone within the state
14
Q
Articcle XXVI of the AZ constitution is also knows as
A
Right of Licensed Real Estate Brokers and Salesman to Prepare Instruments Incident to Property Transactions.
15
Q
Article XXVI states what.
A
any person holding a valid Arizona real estate broker or salesperson license acting as a broker or salesperson for the parties—or as an agent for one of the parties—to a real estate sale, exchange, trade, or renting or leasing of property has the right to draft or fill out and complete all instruments incident to that transaction. The licensee who drafts or fills out and completes these instruments must do so without charge to the transaction party/parties.
16
Q
ADRE does what
A
Regulates real estate licensing and maintains oversight of real estate licesees in AZ
17
Q
Who is the head of ADRE
A
Real Estate Commissioner
18
Q
Who is Real Estate Commissioner appointed by
A
governor
19
Q
What qualifications needed to become commissioner
A
five years experience in real estate, title insurance, banking or mortgage brokerage and at least three years administrative experience
20
Q
As a commissioner you can’t preform these duties
A
financial interest in a brokerage firm or act as a broker salesperson or agent.
21
Q
who is to act for the commissiner in legal actions and also must advise the commissioner on all legal questions that arise from administering real estate law in AZ
A
ATTORNEY GENERAL
22
Q
Commissioner powers and duties include
A
Overseeing ADRE
educating licensees and the public about real estate matters through educational materials, seminars, workshops and more
adopting rules necessary to carry out or enforce real estate law in the state (could be approving standardized legal forms to be used in real estate transactions and assuring that the forms comply with state law.
Investigating any formal complaints brought against anyone performing real estate brokerage services in AZ
23
Q
Where are proceeds from the sale of educational materials placed
A
Educatinoal revolving fund; used to fund various educational endeavors
if educational revolving fund exceeds 25000 at the end of any fiscal year, the excess is transferred into the state’s general fund.
24
What is Real Estate Advisory Board
panel that advises the commissioner on real estate matters.
25
The real estate advisory board functions as the liaison between which two parties
public and the real estate commissioner
26
Advisory Board
10 governor appointed members who serve 6 year terms
Membership terms are staggered so that three members' terms expire on January 31 of each odd number year
27
The board members must consist of
2 rea estate brokers with at least five years experience in AZ
2 members who have been engaged in residential real estate brokerage for the five years immediately preceding appointment
1 member who has been engaged in multi-family residential rental brokerage as a licensed broker for the five years immdediately preceding appointment
2 members who are primarily property sub divides
3 members of the general public who do not hold a rea estate license in the state and aren't a blood relative of a real estate licensee in the state
28
The real estate advisory board duties are
providing recommendations on specific issues or questions as it deems necessary or as requested by the commissioner
presenting an evaluation of the commissioner and the ADRE to the governor on an annual bassis
29
Broker applicants must complete what?
All salesperson licensing requirements in addition to
3 years of experience as a licensee with the past five years
complete 90 hour broker pre licensing course at an approved school
pass the licensing exam
attend broker management clinic within the 23 months before license activation
30
What is temporary broker's license
granted to a licensee whom a designated broker has appointed to act on the broker's behalf to keep the business running uninterrupted when the designated broker is going to be temporarily absent.
License is granted for up to 90 days to tie up business matter for an incapacitated broker, or for a maximum of 15 months in the case of deceased broker.
31
how long are temporary designation and what must be signed.
limited to 30 day duration
designation must be made in writing and kept on file for at least a year and a copy must be attached to any major actions that the acting designated broker takes.
32
License applicants who've had a license appliation denied in the previous year or had a license revoked within the previous two years are ineligible or eligible for licensure in AZ?
Ineligible
33
Can a licensed broker or salesperson engage in cemetry or membership camping sales without holding a separate license
yes but not more than one license will be issued to a licensee at any one time.
34
Employing broker licensure requires
application, a unique business name and if any member is from another state, additional requirements like a certificate of merge might be required
35
Employing brokers must appointed and maintain which type of broker?
a designated broker
in order for business to continue uninterrupted, if a designated broker leaves for any reason, an new one must start on the same day.
36
Can corporate entities be licensed to conduct real estate activities
yes
you can gain an employing broker's license
37
different forms of ownership for Employing broker
Sole Proprietorship: One individual owns all the assets, and all the liability
Partnership 2 individuals own the company and are both personally liable
Limited Liability Company offers its members a limited amount of liability; personal assets are protected
Corporation: the entity, and its liability, are considered separate from its members
Professional limited liability corporations: Similar to an LLC, but all members must be licensed in real estate.
Professional corporations (PC): Similar to a corporation, but all officers, members, etc. must be licensed in real estate.
38
Employing brokerage requirements
must maintain a place of business to keep their license and must display the employing brokers or designated brokers license as well as a sign clearly displaying the business namae, broker's name and the type of license the broker hold in main office
39
Employing brokers and their designated brokers are required to directly manage and supervise the real estate activites of whom
associated brokers, salespersons, and other individuals who work in the brokerage firm including but not limited to management of recored keeping, disposition of funds, and compensation
40
Employing brokers are ultimately responsible for the act of their employees but can they delegate tasks to a designated broker or another authorized individual in the firm
yes
41
Each permanent branch office requires what?
its own branch office license to be displayed in that office
branch office manager (salesperson or broker)
42
Associate broker branch managers and
Review and initial contracts.
Supervise affiliated licensee activity.
Hire or fire affiliated licensees.
Sign commission checks.
Be signers on and write checks from the branch office’s trust account and/or property management trust account.
Be responsible for the handling of all trust accounts they administer.
43
What happens if designated broker is absent for sometime
they can appoint a licensee to act on their behalf
they will have the same power but a salesperson isn't allowed to hire or fire affilated licensees
Designation must be made in writing and kept on file for at least a year
and a copy must be attached to any major actions that the acting designated broker takes.
44
License must be renewed how often
every 2 years
45
Renewals require proof of continuing education completions of how many hours
24 hours required
46
For the first year after a license expires, can a licensee apply for renewal
yes
However, after the year mark ADRE will automatically terminate the license and the former licensee will need to apply for reinstatement
47
censees applying for renewal or reinstatement who have been convicted of a license law/rule violation or certain misdemeanor/felonies may be required to secure what?
surety bond (to satisfy potential claims against the licensee), limited to 100,000 and five years
48
Licensing reinstatements
Reinstatement by re application is available for unexpired cancelled or suspended licenses if the reason for cancelation or suspension has been resolved
reinstatement by renal is available for cancelled or suspended licenses that have been expired for less than one year if the reason for cancellation or suspension has been resolved
Reinstatement by original application is available for cancelled or suspended licenses that have been expired for more than one year if the reason has been resolved (this applies to terminated or revoked licenses)
49
What does original application mean
taking and passing the licensing exam again, then applying within one year of the exam, as well as supplying proof that pre licensing education has take place within the last 10 years.
50
Applicants for a license cannot have had a this two things when applying for license
license denied in the previous year, or had a license revoked within the previous two years
51
What are trust funds
are anything of value held by the broker on behalf of the client for the purpose of securing a real estate transaction (checks, cash, cashier's checks, and money orders
these funds must be kept separate from non trust funds.
Trust funds are protected from seizure when in an account labeled trust accounts or in a neutral escrow account.
52
What are trust account reconciliation
is the accounting procedure that proves your trust transactions have been recorded accurately.
53
What is required of full reconciliation of trust account
bank statement, balanced check register or journal that shows receipts and disbursements, and a reconciliation report
reconciliation requires not only that the bank and checkbook amount agree but also that the total of the client trust accounts be the same
54
How often are trust account reconciliation submitted
monthly to ADRE
Previous months reconciliation is due on the 15th of the following month.
records must be retained for 5 years
at least once per year, any interest earned on trust accounts must be moved into a brokerage operating account
55
Legal Transaction record files include in real estate
Listings
contracts
rejected/expired offers to purchase must be kept for at least one year, unless an offer for the same property is accepted, in which case any rejected offers for that property must be kept for the minimum five years
escrow deposit receipts are retained at an offsite recorded storage center or at the designated broker's office. if on offsite the department must receive written notification for the offsite facility's address and must be granted access to the files
trust accounts records
TRANSACTION FILES MUST BE RETAINED FOR FIVE YEARS
56
What class felony is practicing without a license
class 6
57
Out of state broker must have a blank in place with AZ broker not a salesperson in order to participate in a real estate transaction in AZ
Cooperation agreement
58
Licensees and license applicants may be disciplined if it appears that they within these many years have done wrongful duties
5 years
59
If unlawful activity has gone on for fewer than 30 days, violation licensees are eligible to apply to renew their license and the department likely won't deny it if the licensee is otherwise in good standing although the department will like issue an advisory letter of concern but what happens if it's exceeds 30 days.
more likely to result in disciplinary action
60
Who investigates complaints related to potential violations of real estate statues, regulations, or rules committed by real estate licensees
ADRE
61
When ADRE initiates an investigation, what steps does it take.
sends written notification to the accused licensee and provides an opportunity for a hearing.
62
Licensee has how many days to appear by filing a written answer to the complaint
20 days
63
If further investigation is warranted, the case may be referred by ADRE to whom
Enforcement and Compliance Division
64
if Enforcement and Compliance division think evidence is sufficient to support discipline, hearing of the case may be referred to who
attorney generals office
65
What happens when attorney general is involved in investigation
an administrative law judge presides over the hearing and sends a recommended order to the real estate commissioner.
Commissioner may accept, modify or reject the order and issue a commissioner's final order for the discipline of the accused licensee
66
if licensee wishes to appeal an investigation where do they do so
Maricopa County Superior Court
67
Accused licensees may voluntarily surrender their license to ADRE in how many days prior to hearing
10 days
But this doesn't prevent from the investigation to go on if need to be
68
if commissioner finds that the licensees actions are causing an immediate threat to public health, safety or welfare what can he do
ADRE may summarily immediately suspend a licensees license
69
non trust funds are not bound by real estate laws as long as they aren't commingled with what
trust funds
69
Designated brokers may do what with trust funds
may open trust accounts and make deposits and disbursements
approved signers can also do these functions
Approved signers must be a licensee under the broker or an employee of the firm
69
Client ledgers must include the following information about trust funds they receive
receipt date
deposit date
transaction party names
deposit location
payment disbursed
final disposition of funds
70
How long do brokers retain transactional records including earnest money records for trust fund
5 years
71
What do earnest money records include
earnest money receipts, closing statements, and sales contracts
72
What can licensee do if ADRE summarily (immediately suspended his license due to health danger to the public
suspended licensee may request a hearing to challenge the suspension within 30 days
if 30 days passed suspension is deemed final.
73
What is letter of concern
is an advisory letter to notify a licensee that while the conduct or evidence doesn’t warrant other disciplinary action, the commissioner believes that the licensee should modify or eliminate certain practices and that continuation of the activities may result in further disciplinary action against the licensee.
74
provisional license
is one that allows a licensee to practice real estate activities subject to either a consent order or the commissioner's terms, conditions, and restrictions.
75
consent order
is an order issued by the commissioner on the agreement of both parties to an appealable agency action or a contested case. The order must include terms that the parties agree on and that the commissioner determines are appropriate.)
Denial of issuance, renewal, or reinstatement of license
Summary (immediate) suspension
Suspension or revocation of license
Civil Penalties
76
Why would commissioner apply to the superior court for injunction
to prevent the licensee from engaging in violation-related acts; the court may grant a temporary restraining order, a preliminary injunction, or a permanent injunction.
The commissioner may assess a civil penalty, not to exceed $1,000 per violation, when a hearing determines that a licensee is guilty.
77
What is Subdivision
Is a tract of land that's been divided into usable lots that someone Either the developer or a builder the developer sells to will eventually put houses or other structures on
78
All subdivided land sold must be clear of what?
be cleared of any blanket encumbrance and have a clear title
79
What is feasibility study
it is part of a market study that looks at the site, including any building issues or potential environmental factors.
Market study looks at whether financing is available and its rates, compares the anticipated rate of return to other places, and considers the surrounding area-from its demographics and needs to traffic patterns and the communit itself.
80
What is considered marketing strategy in a subdivision?
who the buyers of subdivision homes are
market niche to target,
whether to have different price points for various phases of development are all considerations in the marketing strategy
81
When should marketing strategy for subdivision be created
before ground is broken
82
Once market study has been completed the developer can apply to what group
state and local agencies for approvals
83
Can salesperson help a developer with subdivision
Find the land and discuss possible uses for it.
Help perform cost analyses.
Discuss considerations for outlots.
Negotiate the land sale and build in a due diligence period for the feasibility study.
Help the developer prepare a portfolio for the lender.
If all that goes well, marketing the development, which includes helping to develop a marketing plan and selling the homes or lots.
84
what is public report used for
Subdivisions
85
What is public report
details exactly what buyers can expect when they purchase land, including things like access, utilities, and drainage.
86
What is a subdivider
“a person who offers for sale or lease six or more lots, parcels or fractional interest in a subdivision or who causes land to be subdivided."
87
To obtain a public report, what must be done
An Application needs to be completed
88
application for obtaining a public report consists of three parts
Instructions and general information lets owners know what must be done, what the fees are, outlines the events that must happen before the public report will be issued, and gives an estimate of how long it takes to receive that report. This section also covers topics regarding inspections, submission of advertising, how to handle changes, and what happens if there is an error.
Required documents which states how and which documents must be submitted to the department. The extensive list includes such items as a copy of the subdivision map, the title insurance policy, a Certificate of Assured Water Supply, copies of the real estate sales contract or lease to be used, the owners association information, and more.
questionnaire which is where sellers must list their company name (if they have one), subdivision information, and an affidavit from the seller.
89
why can commission deny the issuance of a public report
Misrepresentation or fraud to purchasers or lessees
Inability to provide a title or lease
Inability to prove there is enough money to complete streets, sewers, and other facilities promised within the subdivision
Failure to prove the lots can be used for the stated purpose
Inability to prove there is permanent access to the property
Someone associated with the property as a business partner has:
Been convicted of a felony or misdemeanor involving fraud.
Been temporarily or permanently enjoined by court order, judgment, or decree from conducting business in real estate or related industries due to fraud or racketeering.
Had an administrative order entered against him or her by a real estate or security regulatory agency.
90
Lots in a subdivision can only be sold on one condition
until everything promised—streets, utilities, etc.—has been completed, or the commission has approved the financial arrangements to complete them. A public report must be obtained before sales can begin.
91
What is active management areas
are areas set up by the government where the groundwater is carefully managed.
92
what happens if subdivision is inside an active management area
If a subdivision is inside an active management area, the commission can deny a public report unless the subdivider has a commitment of assured water service from the director of water services or from a city, town, or water utility that already has an assured water supply.
93
Outside of an active management area, why can a public report be denied unless on what conditions
adequate water resources are present, and the director agrees, or written confirmation of the water supply has been obtained from a city, town, or water utility.
94
What are outlots
are leftover parcels of land surrounding the subdivision development.
95
what are considerations for outlots
e possible uses, placement, and zoning restrictions.
96
What happens if there are material changes to the subdivision plan
landowners must:
Notify the commission in writing.
File an amended public report and pay a fee equal to half of the original filing fee.
97
The commissioner has the ability to exempt subdivisions or fractional interests from commission rules at the commissioner's sole discretion if the owner presents a
petition for exemption
98
what are other exemptions for subdivisions
Bulk sales of six or more lots to one buyer in one transaction
Sale or lease of lots larger than 160 acres
Sale or lease of lots zoned and restricted to commercial or industrial uses
99
What constitutes an illegal subdivision
Any attempt to avoid Arizona subdivision statutes by selling subdivision lots to a series of owners, who then divide the land again
100
subdividers cant sell lots before they have received a public report from commission, but what can they take
take reservations and deposits for lots under certain circumstances
101
what is statement of intention to subdivide
before deposits can be taken, statement of intention to subdivide needs to be sent by subdivides;
statement of intention to subdivide:
a chunk of land and send some information (via mail or hand delivery) to the Arizona Department of Real Estate, including:
The name, address, and telephone number of the prospective seller
The name, address, and telephone number of any real estate broker the prospective seller retained to promote the lot reservation program
The name and location of the project for which lot reservations are to be offered
The form to be used for accepting lot reservations, subject to the commissioner’s approval
102
deposits for individual plots cant be more than
5000 each
103
Once a deposit for subdivision is received what must happen
escrow agent must place it in an escrow account insured by a US agency within one business day and it stays there until reservation is cancelled or terminated or purchase contract is executed
104
Until when can buyers cancel a lot reservation for subdivision
at any time before the purchase contract is written, by providing written notice to the seller
105
When developers receive a public report for the subdivision what must they do
they must send a copy of it to all reservation holders, along with a copy of the proposed purchase contract within 15 calendar days. The buyer and seller then have seven calendar days to enter into a contract for the purchase of the reserved lot. If a contract is not executed, the reservation terminates and the deposit must be returned.
106
what must be included on all agreements or contracts for the sale of a subdivision lot.
Disclosures
107
What disclosures must be included in subdivision
Public report
Earnest Money/Down payment The contract must disclose where earnest or down payment money will be deposited. his must include the name of the title company and the name of the broker’s trust account or another depository. If that advance money isn’t going to be deposited in a neutral trust account, it has to be spelled out in the contract, too. To be sure the person giving the money is aware of it, that individual must sign and initial the provision on the contract
Affidavit of disclosure Sellers of five or fewer parcels of land that are not subdivided land or in an unincorporated area must furnish an affidavit of disclosure to potential buyers at least seven days before the transfer of property. The buyer must then acknowledge receiving the affidavit and has five days after receiving it to rescind the sale. If the sale goes through, the seller must record the signed affidavit from the buyer at the same time as the deed
Public report receipt Whenever a developer is required to acquire a public report, the developer must provide a copy to buyers. The seller should provide the buyer with a receipt that includes the public report registration number, the development name, and the lot number. The seller must obtain the buyer’s signature on the receipt to prove that it was provided.
108
What is rescission
is a mutual agreement to cancel a contract—one in which the parties are returned to their pre-contract status. In real estate, this means the buyers get their earnest money back, and the seller gets to keep the house and is free to market it to others.
109
Why are contingencies are written into the purchase contract
spelling out the terms under which the buyer can rescind the contract. Financing, appraisal, and inspection contingencies are common
110
Arizona law (Arizona Administrative Code R4-28-804) specifies two additional circumstances under which a buyer of unimproved subdivided land can rescind the contract. which are
The seven day rule allows purchasers of unimproved subdivided land to rescind the contract without cause or reason and receive the return of their earnest money by sending a written notice to the seller within seven calendar days after executing it. In order to make it easier for buyers to exercise the seven-day right of rescission, the seller’s name, address, and telephone number must be conspicuously disclosed on the face of all contracts.
the six month, sight unseen rule When a purchaser buys an unimproved subdivided lot sight unseen (they didn’t inspect it before the agreement was signed), the purchaser has six months from the date of contract execution in which to inspect it and rescind the agreement, if necessary.
111
If a developer is found to have sold or leased lots in a subdivision before a public report is issued, the transaction becomes immediately
rescindable
112
The purchaser or lessee can bring action against the developer of lot subdivision up to how many years
3 years
113
What does recovery fund pay for
The recovery fund reimburses consumers’ actual, out-of-pocket losses—including attorney fees and court costs—that are directly related to a real estate transaction. It doesn’t reimburse damages for pain and suffering.
114
what will recovery fund not pay for
Transactions for property outside Arizona
Tenant conduct or neglect
Vandalism
Natural causes (e.g., storms, flooding)
Post-judgment interest
Undocumented transactions
115
Consumer may apply for a maximum dollar amout per transaction, regardless of the number of aggrieved parties or the number of licensees involved
maximum of $30,000 per transaction,
116
How much will recovery fund reimburse per licensee
90000
117
Any time someone applies for a real estate or cemetery salesperson’s license, they pay ? and broker applicants pay?
10 and 20
118
f, on June 30 of any year, the fund’s balance is less than $600,000, renewing licensees must pay into the fund
20 for brokers and 10 for salespeople until its brought back up to 60000
119
Claimants must begin legal proceedings against a licensee to win a judgment within of the incident.
five years
120
After the judgment has been awarded, related to the recovery fund they have o try to get restitution from the offending licensee and file a claim to the recovery fund if the licensee can't pay.
two years t
121
if licensee is at fault and recovery fund pays for the wrong doing what happens to the licensee
If a claim is paid from the recovery fund, the offending licensee's license will be automatically terminated and the licensee won't be eligible to apply for reinstatement until the amount distributed by the fund is paid back in full, plus interest.
122
unsubdivided land
is land divided into six or more lots of more than 36 acres, but not more than 160 acres. Agricultural lands are not included under this definition.
123
difference between subdivided and unsubdivided
While subdivided land is usually used for housing complexes, unsubdivided land is usually used for structures or other uses requiring larger plots of land.
124
Before unsubdivided land can be sold or leased, the owner or the owner’s agent must do what
notify the commissioner in writing
125
Regarding unsubdivided land notice of sale or lease must contain
The name and address of the owner or owners
The name and address of the agent
The legal description of the land
The condition of the title
The terms and conditions under which land will be sold or leased
A statement of land uses
A permanent access statement
A water statement
The availability of public utilities
126
The owner must also include a copy of what regarding the sell of unsubdivision
original advertising and/or promotional materials with the notice to the commissioner. Also, if the director of water resources has issued a water availability report, that information must be included with any advertising and/or promotional materials. On the other hand, if there is no water report, that information has to be included, as well.
127
When the commissioner receives a notice regarding the sell of subdivions , it is the commissionr's duty to due what
o examine the land. The cost of travel, lodging, and food is the landowner’s responsibility. In addition, there is a $500 filing fee that must accompany the notification.
If the plan for an unsubdivided land development changes, the commissioner must be notified. At that time, the commissioner may suspend the approval for sale or lease until the owner can get an updated public report.
128
Regarding the exemption for the sale of unsubdivide land
owner of an unsubdivided tract of land can petition, in writing, the commissioner for an exemption to any of these provisions. The commissioner has the last word and can decide that it is not necessary to protect buyers due to the special characteristics of the land or if there are limited offers for lease, sale, or financing. There is a $100 filing fee to request this exemption.
129
when will a commissioner issue a public report for unsubdivided land
after examining a plot of unsubdivided land
130
what can happend after public report is issued for unsubdivided land
sales and leasing activity can start
131
Can the owner put together a public report for unsubdivided land
can also put together a public report and submit it with the sale or lease notice, along with a $500 filing fee or, if the public report is sent after the notice, a $250 amended filing fee. The commission will then determine, within 15 business days of receipt, whether the notification and report are administratively complete. If they are complete, the commission may issue a certification of approval or a denial that is based on requirements not being met, that the owner has violated state or federal law, or that the applicant or project represents a risk of harm to the public
132
the owner can also put together a public report if it's accepted and certification is given by commissioner what happens next?
sales or leasing activities can began
133
Once certification is received, sales or leasing activities can begin.
The commission can deny the issuance of a public report or even suspend or revoke one that has already been issued for many reasons, including (but not limited to) the following:
Misrepresentation or fraud to purchasers or lessees
Inability to provide a title or lease
Inability to prove there is enough money to complete streets, sewers, and other facilities promised with the subdivision
Failure to prove the lots can be used for the stated purpose
Someone associated with the property as a business partner has been:
Convicted of a felony or misdemeanor involving fraud
Temporarily or permanently enjoined by court order, judgment, or decree from conducting business in real estate or related industries due to fraud or racketeering
Had an administrative order entered against him by a real estate or security regulatory agency
Inability to prove there is permanent access to the property
134
what if an owner of Subdivided land is denied pubil report
may file a written request for a hearing within 30 days of the denial. The hearing must be held within 20 days of receipt of the request unless the owner asks for a postponement. If the commission fails to hold the hearing within the allotted time, or if a decision is not given within 45 days after submission, the denial must be rescinded, and a public report must be issued.
Unsubdivided land can’t be sold until a public report and certificate of administrative completeness are obtained.
135
When can a commissioner issue a summary order
if there is evidence of an unlawful practice. Or, at the commissioner’s discretion, a public hearing may be held. After the hearing, the commissioner may issue one or more summary orders. If the owner does not comply, the commissioner may bring court action.
136
what takes place when selling unsubdivided land
seller has to convey a deed to the purchaser, and unpaid balances due to the seller may be secured by a note and mortgage or deed of trust. Or the deed must be placed in escrow no later than 60 days after execution by the purchaser. In this case, the seller must provide:
A contract that describes the legal description of the property
The terms and conditions under which the property is being sold
A copy of the preliminary title report
An executed deed
All documents needed to release or extinguish any blanket encumbrance—a mortgage or other financial instrument—that covers multiple plots of unsubdivided land and for which the seller is responsible must be provided. The blanket encumbrance must be paid via a mortgage or note.
137
when can a buyer for unsubdivided land back out
buyers can back out of a sale without a reason by midnight of the seventh calendar day after a sales contract is executed.
If unsubdivided land is purchased sight unseen, the buyer has six months to inspect the property. If the land is not satisfactory, the purchase agreement can be rescinded at that time.
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what occurs during advertising unsubdivided land sales
the owners must lands must file copies of all promotional and advertising materials used to sell the land with the commissioner within 21 days of usage.
Purchasers of unsubdivided land are entitled to a recordable copy of all contracts associated with the sale of the land.
Advertising, communications, sales literature, and even oral statements by salespeople can’t contain:
Any untrue or misleading statements or omissions of facts
Anything that says there is no risk in purchasing the land
Statements or photos of proposed improvements without a disclaimer stating that the amenities do not currently exist
Statements that indicate the lots are suitable for homesites unless water and sewer facilities are available from a certified public utility, or it is expressly noted that they are not currently available
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What happens if there are untrue or omitted statement in a notice of intention
the owner is liable for possible civil damages. Owners could find themselves owing the cost of the land and improvements as well as court costs
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An owner who violates any of the provisions set out by the commissioner relating to the sale or lease of unsubdivided land may be subject
civil penalties. The commissioner can levy penalties up to $1,000 per infraction.
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If an infraction is discovered, regarding subdivided land
hearing to impose penalties must take place within the earlier of five years from the discovery of the violation or when the discovery should have taken place, had the commission been reasonably diligent.
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who retains jurisdiction over all matters regarding unsubdivided land in Arizona, even if other agencies claim jurisdiction.
ADRE Commissioner
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Timeshare developers must file blank with the Arizona Department of Real Estate’s Development Services Division for approval by the commissioner.
public report
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he Arizona Timeshare Owners’ Association and Management Act does what
governs the actions of developers to protect consumers in sales, advertising, and promotions.
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Why was arizona timeshare owners association and management act created
This act was created to ensure appropriate consumer disclosure and other safeguards, such as periods for contract rescission.
Developers must give potential buyers a list of written disclosures regarding the premium's estimated retail value, conditions, or requirements prior to the tour or presentation.
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What happens if developers do not follow the proper guidlines deviated from arizona timeshare owners association and management act
face voidable sales and rescission rights for buyers.
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The proposed or approved timeshare public report must be provided must be provided to whom
to every prospective timeshare buyer in Arizona.
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The public report must contain pertinent details that would be relevant to customers, including but not limited to:
Developer contact information
Property description, including units and common areas
Covenants
Available utilities
Sample sales contracts
State business filings
Property title report
Location of the development
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The public report application for timeshares doesnt include
minimum number of years of operation or a full business organization chart.
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Developers who want to jump into presales have to be authorized to do so by submitting to the commissioner:
A written request for presales
An application for a timeshare public report, including all required fees and exhibits
Proof that sale funds received will be deposited into an escrow account
Then, developers should provide to each potential purchaser:
A copy of the proposed timeshare public report that was submitted to the commissioner
The cancellation policy
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what happens if timeshare he public report regulations are not followed,
he sales may be voided and the developer may be required to issue a refund to buyers.
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State law allows purchasers to rescind the purchase agreement regardless of cause by sending written notice to the developer at the address noted in the contract by what day of timeshare
midnight on the tenth day after signing the agreement.
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who determins the allowed rescission period for a timeshare
developer who may extend it beyond 10 days
he actual time period must be noted in the purchase agreement.
The buyer may cancel the agreement with no penalties or obligations.
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What are the two types of timeshares
timeshare estates (ownership)
timeshare use (no ownership only a righ to occupy)
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Timeshare estate or timeshare property in
fee simple ownership, conveying all the rits of ownership
pieces of real estate
owned by multiple unrelated individuals who, in addition to their ownership rights, eahc hold the right to occupy the dwelling unit in one to two week intervals during the year
it can be sold or passed down to heirs
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A Right to use timeshare timeshare use
conveys the righ to occupy the property for some given amount of time usually for a one or two weeks a year for specified number of years
timeshare use cant be sold or passed down to an heir
if owner is unable to use a designated week or assigned date the owner can exchange the date fo another available time
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What is vacation ownership
type of timeshare that involves a buyer agreeing to a one-time purchase price and an annual maintenance fee, and in return getting their selection of accommodation time and having the right to use the unit for a specified number of years. It’s basically a way to prepay for a vacation rather than renting it.
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there are two types of vacation timeshares:
right-to-use (timeshare use) and fee simple (timeshare estate).
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Fee simple ownership for a vacation timeshare
works in the same way as with other forms of timeshare: ownership can be enjoyed, sold, or passed down to h
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for timeshare how long is the advertising presentation allowed to be in AZ
The state sets a two-hour limit on the sales presentation/tour a consumer is required to attend in order to receive the premium for promotional events.
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Prior to advertising event kicking off for timeshares the developers are required to
rovide written disclosures regarding the offered premium’s retail value and any conditions to all attendees
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Along with the invitation to tour a timeshare property, consumers who are invited to a sales presentation/tour must be sent what
written disclosure. This disclosure must include minimum time commitment, retail value, and other conditions to receive the premium.
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Developers should submit copies of all promotional and advertising materials to the commissioner within how many days for timeshare advertising
10 days
he commissioner will then either approve or disapprove the materials within 15 days, explaining any disapprovals in writing. The commissioner may give provisional approval if developers agree to address any defects, flaws, or shortcomings in the advertising.
Licensees must apply to the Department of Real Estate for an exception before creating any kind of lottery, contest, or drawing for interest in a development.
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Timeshare advertising (communication or sales literature) must include
True statements and representations of material facts as stated according to the public report, with no omissions that might mislead buyers
Clear indication on drawings of proposed improvements that they’re representative only and that the improvements don’t currently exist (for projects still in development)
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Advertising and promotional materials for timeshares must not include
that timeshare interests don’t involve potential risk or loss.
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designated broker or another authorized individual in the firm. Responsibilities include
Reviewing and managing all transactions and agreements
Reviewing all advertising
Managing all documents and records
Managing all funds
Supervising unlicensed assistants
Ensuring licensees are familiar with federal, state, and local laws related to real estate
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Salesperson branch managers’ permitted responsibilities are much narrower than brokers
Perform office management tasks that the employing broker isn’t required to do.
Be signers on the employing broker’s trust account and/or property management trust account.
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Before development of subdivision
the developer will look at what
Market study, which includes feasibility study,
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developers must include wording in their purchase contracts that lets buyers know they are entitled to a copy of
Public Report
