Session 2: Arizona Real Estate Statutes and Commissioner's Rule Flashcards
Substantive policy statements
How the commissioner interprets the law
Article XXIV
In AZ you can write contracts but you can’t charge for them
How many members are in the Real Estate Advisory Board?
10 members appointed by the governor
How long can a member serve on the board?
6 years
How often does the board convene?
Every 3 months
What is the board made of?
- two real estate brokers who have 5 years of experience
- three members, engaged in residential real estate with 5 years preceding the appointment and 1 of whom has been engaged in multi-family residential property management with a brokers license for 5 years
- two members primarily engaged in subdividing real property
- three public members who are not closely related to a person holding a real estate license
Is there a term limit for the commissioner?
No
To become the commissioner do what experience do you need?
5 years or either real estate, title, banking, mortgage
3 years administrative experience
Can the commissioner audit for any reason?
Yes
Recovery Fund
ADRE maintains a recovery fund for the benefit of the public for wrongdoing by a licensee
How much do salespersons contribute to the recovery fund?
$10 per salesperson, $20 per broker
What is the minimum that has to be in the recovery fund?
$600,000
What happens if the fund drops below $600,000
You have to pay an additional $10-$20 upon renewal of your license
How much will the fund’s payout be for a single transaction?
$30,000
How much will the fund payout be per agent?
$90,000
What is the statute of limitations?
5 years
What happens to the license if the recovery fund is used?
Terminated/revoked
Once the license has been terminated/revoked can you get it back?
Yes, you have to pay back the amount that was taken out of the fund with interest
And you have to plead your case
When did Article XXVI come into effect?
1962
In AZ, when is a license required?
When someone with the intent or upon the promise of compensation, attempts or performs the service of a licensee, or holds oneself out as a real estate licensee
Is a license required to enter into a principal/agent agreement for brokerage services whether verbal or written?
Yes
Are property managers exempt from having a real estate license?
Yes if they only manage 1 property
What happens if an applicant is renewing a license within 1 year after it’s expired?
The applicant may apply CE hours completed after expiration towards needed credits to reapply.
A late fee of $10/mo (max of $60) is charged.
When will the department terminate a license?
When it has been expired for more than 1 year
How long does a licensee have to renew and change their active status?
30 days
Do branch offices need to have a license?
Yes
How do you get a temporary broker’s license?
- Surviving spouse/next of kin (90days)
2. personal representative/administer (15 months)
What happens when a broker needs to be away for longer than 24 hours? Like a vacation or family emergency
Designate a licensee whom they employ
Assign another broker as a temp
How long can the temporary broker act in the capacity?
30 days
How long do records of temporary brokers need to be kept?
1 year
Can a designated salesperson hire or sever licenses?
No
How long do you have to apply for your license after taking the state test?
1 year
What is an active license?
Current and hung with a broker
What is an inactive license?
Current but maintained at the ADRE
Can an inactive license perform real estate activities?
No
How often do you need to renew your license?
Every two years
How many CE hours do you have to have
24
How long do you have to renew your license in the month it’s due?
Until the last day of the month.
What happens if the employing broker’s license expires?
Both broker and all salespersons licenses are severed and no commission will be paid.
How long do you have to notify the Department of the following changes: Address/employment Broker business address Felony or misdemeanor conviction Restriction of any license Name change
10 days
Do brokers need to have trust accounts?
No
How much of their own money can a broker put in their trust account
$3000
Can a salesperson be a signer on the trust account?
Yes
Can the salesperson on the trust account write commission checks or property management checks?
No
When does interest need to be removed from trust accounts?
Every 12 months
When does a client’s money need to be deposited into the trust account?
Within the next banking day
How long do brokers need to keep employment records?
5 years
How can an unlicensed assistant be compensated?
Salary or hourly
Can an unlicensed assistant originate documents?
No
Can an unlicensed assistant perform walk-through inspections or tenant vacate inspections?
No
Can an unlicensed assistant provide advice, pricing, or opinions of value to a consumer?
No
Can an unlicensed assistant advise or negotiate with anyone regarding a property or transaction or assist in the preparation of documents with a consumer?
No
Can an unlicensed assistant hold an open house without a licensee being present?
No
Improved lot
will have a structure built within 2 years
Master-planned community
2 or more platted subdivisions sharing the same CC&Rs
Subdivided land
6 or more parcels under 36 acres each
Un-subdivided land
6 or more parcels or 36 acres but less than 160 acres
Inspection of un-subdivided land
6-month recession period without inspection
7 day recession period with inspection
How long do public reports need to be kept?
5 years
Is the land value of the subdivision in the public report?
No
Does a person who sells time-shares in AZ need to be licensed?
No
Do time-share telephone solicitors need to be licensed?
No, but a licensee needs to be in the room when making the calls
What is the recission period on a timeshare?
10 calendar days
How long can the timeshare company keep you in a presentation?
120 min
What period of time is the first half of property taxes?
January 1 - June 30
What period of time is the second half of property taxes?
July 1- December 31
When is the first payment due for property taxes?
October 1
When is the first payment late for property taxes?
November 1
When is the second payment due for property taxes?
March 1 of the following year
When is the second payment late for property taxes?
May 1 of the following year
What are property taxes paid based on?
Assessed value (ad valorem)
How much is the residential assessment for property taxes?
10%
How much is the vacant land for property taxes?
15%
How much is the commercial property tax percent?
18%
What does E & O insurance cover?
Listing and selling, property management, estimating market value, counseling clients, referrals
How often do HOAs need to meet?
once a year (annual)
Property taxes are based on:
a. Frontage
b. Market Value
c. Ad Valorem
d. Transfer value
Ad Valorem
Property Taxes become a lien on:
a. January 1st
b. October 1st
c. March 1st
d. December 1st
January 1st
A licensee cannot charge a fee to write a contract based on:
a. Article XXVI of the Arizona Constitution
b. Statute of Frauds
c. Code of Ethics
d. Statute of Limitations
Article XXVI of the AZ Constitution
What happens when a broker loses his license?
a. The broker gets a 30-day extension
b. The licensees lose their license
c. The licensee must hire on with a new broker
d. It does not affect the licensee
The licensee must hire on with a new broker
How long must the broker keep completed purchase contracts?
Five Years
The Arizona Recovery fund must keep a balance in the amount of?
$600,000 by June 30
A broker is required to deposit the earnest money in escrow:
a. Within 48 hours of receipt
b. Upon buyer’s acceptance
c. Upon seller’s acceptance
d. By no later than the next banking day
By no later than the next banking day
When a license leaves a brokerage:
a. The license goes with the licensee
b. The license is terminated automatically
c. The license is sent to the real estate department by the broker
d. the license stays with the broker
The license is sent to the real estate department by the broker
When are 1st half of property taxes delinquent?
a. January 1st
b. October 1st
c. November 1st
d. May 1st
November 1st
Every two years a licensee must have how many hours of continued education?
24
Without the public report a subdivider can:
a. take lot reservations
b. write purchase contracts
c. take non-refundable deposits
d. lease only
take lot reservations
You purchased unimproved land without inspecting it. How long would you have to rescind?
Six months
Who appoints the real estate advisory board?
The governor
An agent is taken to court for a property owned by 4 people in one transaction. How much will the recovery fund payout?
$30,000
Upon passing the State real estate examination a student must activate their license within:
a. 30 days
b. 6 months
c. 1 year
d. 3 years
1 year
To collect a real estate commission one must be licensed at:
a. close of escrow
b. time of recordation
c. when earnest money is deposited into the trust account
d. time of sale
time of sale
By Arizona law, you are a subdivider if you won or have owned how many lots in a single platted subdivision and offer any number of them for sale?
a. 3
b. 5
c. 6
d. 12
6
In AZ property taxes are paid:
a. 90 days after the bill is received
b. January 1st of every year
c. Twice a year
d. December 31st
Twice a year
How many members are on the advisory board?
10
The advisory board is made up of:
a. 3 brokers with at least 5 years experience, 2 developers, 4 public members
b. 4 residential brokers, 2 developers, 2 subdividers
c. 2 real estate brokers, 3 residential licensees (one being property manager broker), 2 subdividers, and 3 public members
d. 2 real estate brokers, 2 developers, 2 subdividers, 3 prison inmates
2 real estate brokers, 3 residential licensees (one being property manager broker), 2 subdividers, and 3 public members
When a broker moves his office, how long does he have to remove the sign?
Immediately
A broker goes on a cruise for 10 days. Who can be left in charge?
a. an unlicensed employee
b. any real estate licensee employed by the broker
c. only a real estate salesperson
d. any corporate officer
any real estate licensee employed by the broker
Who must be licensed?
a. Trustee
b. Receiver
c. Attorney-in-fact
d. Salesperson working for a land developer
A salesperson working for a land developer
In Arizona, how long does a purchaser have to rescind a time-share contract?
a. 10 calendar days
b. 6 months
c. 3 years
d. 5 years
10 calendar days
If the HOA has less than 50 units:
a. No disclosure of any kind is required
b. The seller is obligated to provide copies of the CC&R to the buyer
c. The title company must provide CC&Rs to the buyer
d. The buyer must request CC&Rs from the HOA
The seller is obligated to provide copies of the CC&RS to the buyer
Improved land means:
a. A structure is built or will be built within 12 months
b. A structure is or will be built within 2 years
c. It just keeps getting better
d. A sewer or septic tank has been installed on the property
A structure is or will be built within 2 years
A subdivision is:
a. 6 or more parcels of land which must be improved and are under 24 acres each
b. a community that includes an HOA and at least one green belt or one park
c. 6 or more parcels of land improved or unimproved any of which are less than 36 acres each
d. Under 6 parcels of land improved or unimproved any of which are less than 24 acres each
6 or more parcels of lad improved or unimproved any of which are less than 36 acres each
Unsubdivided land:
a. 6 or more lots that are all unimproved all of which are 36 acres but less than 100 acres each
b. Illegal to purchase in AZ
c. Does not need ingress and egress to be b[ourchased
d. 6 or more lots improved, all of which are 36 acres but less than 160 acres each
6 or more lots improved, all of which are 36 acres but less than 160 acres each
Is a broker required to have a trust account?
No
If a broker violates the licensing law that results in a financial loss by a consumer, how long does the consumer have to file a lawsuit and notify the Real Estate Commissioner to protect the consumer’s right to collect from the Real Estate Recovery Fund?
Five years after the alleged violation occurred
Licensing law required that each employing broker:
a. Maintain escrow account records for at least three years
b. Keep transaction records for at least five years
c. Maintain a trust account for client and customer funds
d. Employ at least one salesperson
Keep transaction records for at least five years
Signage is properly affixed at the main entrance to the brokerage office and each branch office and is in clearly visible lettering. The rule of thumb for the size of the lettering is?
1 inch
The broker keeps all employee records for a period of how many years after termination?
5 years
Owner-occupied real estate is taxed at what rate on the assessed value?
10%
Unlicensed personal assistants and other unlicensed employees receive compensation based on:
a. Their work
b. Sucess of the transaction
c. Whatever is agreed to by the broker and employee/assistant
d. A broker is not allowed to have unlicensed assistants working for the brokerage
Their work
The broker removes interest earnings in a trust account at least
Every 12 months
Which of the following has the highest assessed tax rate in AZ?
a. Residential
b. Land
c. Fully leased apartment
d. Vacant shopping center
Vacant shopping center
When you enter a branch office which of the following is correct?
a. The branch office license is prominently displayed
b. the branch office license is not necessary
c. the branch office license must be displayed in the main office
d. The ADRE doesn’t issue branch office licenses
The branch office license is prominently displayed
A salesperson wrote an offer with her buyer while the broker’s license was expired. When the broker’s license was renewed what was the outcome?
a. Both salesperson and broker receive full commission
b. only salesperson will receive commission
c. Only broker will receive commission
d. Neither broker nor salesperson will receive a commission
Neither broker nor salesperson will receive a commission
In AZ, a broker commits a fraudulent act in connection with the sale of a property on March 15, 2011. On March 30th, the transaction closes. On November 1, the client sues the broker, alleging fraud. On December 20, the jury finds in favor of the client. When can the client receive payment from the real estate recovery fund?
a. The request must be filed within 30 days following the illegal activity
b. Within one year after filing a civil suit against the licensee
c. Within five years of filing suit
d. After filing the suit, notifying the commissioner in writing within five years of the event, winning a judgment, and then attempting to collect from the licensee
After filing the suit, notifying the commissioner in writing within five years of the event, winning a judgment, and then attempting to collect from the licensee
A non-resident license applicant must consent to:
a. A certificate of specific performance
b. The appointment of the real estate commissioner as agent or attorney-in-fact
c. Submitting a copy of his or her birth certificate
d. Corpus Delicti
The appointment of the real estate commissioner as agent or attorney-in-fact
Which of the following sales is exempt from a public report?
a. The sale of 160 acres or more
b. The sale of six lots or more to the same buyer in one transaction
c. The sale of commercially zoned parcels
d. All of the above
All of the above
If your AZ real estate license is not renewed on time then during the 1 year grace period it is considered:
a. Expired
b. Revoked
c. Suspended
d. Terminated
Expired
The broker and his salesperson have a few deals already in escrow, however, the broker’s license is now suspended. What happens to the commission?
a. Only the salesperson will receive commission
b. Only the broker will receive commission
c. Neither the broker or salesperson will receive commission
d. Both the broker and salesperson will receive commission
Both will receive because the license was valid at the time of sale (when the offer was written and accepted)
