Real Estate Salesman Study info (Part 2)

The fund will pay only for any actual or

"out-of-pocket" expense. A member of the public who has been harmed by the actions of a licensee may be able to recover an unpaid judgment through the recovery fund.

According to ARS 32-2101.25: "Employing broker" means a person who is licensed or is required to be licensed as a:

(a) Broker entity pursuant to section 32-2125, subsection A. (b) Sole proprietorship if the sole proprietor is a broker licensed pursuant to this chapter In other words, the employing broker is either a brokerage firm or a sole proprietor. In either instance (whether brokerage firm or sole proprietor), the employing broker's entity is separately licensed from the individual.

Associate brokers and salespersons who have been delegated to act on behalf of the broker on a temporary basis are not required to attend

the Broker Management Clinics.

A broker is responsible for the actions of all associated licensees and must take steps to ensure they follow the rules to avoid violation and any consequences that might result from violations. This is addressed in the Arizona Administrative Code

R4-28-1103—Broker Supervision and Control

Employing Broker Non-natural person (brokerage) firm can hire:

Sales associates Broker associates Unlicensed assistants

Question #2 of 2 Question ID: 1150029 There are two ways to set up a limited liability company for an employing brokerage: as a member-managed LLC or as a manager-managed LLC True False

True

Question #2 of 5 Question ID: 1150031 When a designated broker renews his license, the employing broker's license will be renewed at the same time. True False

True

Designated brokers complete the Declarative Audit upon

each license renewal on behalf of the employing broker.

The Department keeps an employing broker's audit for at

least five years.

Manufactured home liens are effective for

30 years

Blind ad

A "blind ad" is one where the advertiser is anonymous to the reader.

ARS 32-2155 Restriction on Employment or Compensation

A broker shall employ and pay only active licensees, and a licensee shall accept employment and compensation as a licensee only from the legally licensed broker to whom the licensee is licensed. If the licensee is licensed through a professional corporation or a professional limited liability company, the employing broker may pay and the licensee may receive compensation only through the licensed professional corporation of which the licensee is an officer and shareholder or the licensed professional limited liability company of which the licensee is a member or manager.

are responsible for the activities of unlicensed assistants, even if they are the assistants of their associated licensees and not the direct assistants of the broker.

Brokers

Irrigation ditches 4

Buyers should confirm irrigation rights with ADWR and the ditch association before assuming the buyers will have the right to use the ditch to water their property.

Question #6 of 11 Question ID: 1150027 The Arizona Constitution, under Article 26, allows real estate agent to draft or fill out and complete certain documents which are incidental to the transaction. Which one is NOT covered by the Article? A) Assignment B) Mortgage C) Escrow Instructions D) Deed

C) Escrow Instructions

Question #3 of 13 Question ID: 1150158 Which of the following is NOT an element of a contract? A) Consideration B) Offer C) Legal description D) Acceptance and delivery

C) Legal description

Listing agreements and buyer representation agreements are real estate employment agreements. Under ARS 32-2151.02, an Arizona real estate employment agreement must contain the following four items:

Clear and unambiguous language: price and terms Commencement and expiration dates: calendar dates with no auto-renewal Commission negotiated and clearly stated in the method of computation and specific dollar amount Signature of all parties: real estate employment agreements are not assignable unless agreed to by all parties

Question #6 of 10 Question ID: 1150271 "Acting in concert" can be defined by three of these answers. Which answer is NOT considered "acting in concert"? A) A unity of purpose or design between buyers B) A concert of action between buyers and seller C) Two or more defendants working separately but to a common purpose and each acting with the knowledge and consent of the others D) Buyers purchasing with the intent of future subdivision

D) Buyers purchasing with the intent of future subdivision

Question #7 of 15 Question ID: 1150262 If a seller's agent indicates there are "ditch rights," what is the prudent thing for a buyer's agent and/or the buyer to do first? A) Contact ADEQ B) Contact the County C) Contact ADRE D) Contact the appropriate ditch association

D) Contact the appropriate ditch association

Question #5 of 13 Question ID: 1150146 Property managers are regulated as to their handling of paperwork. Which of the following is the inaccurate or false statement? A) Only broker or delegated licensee may sign nonresidential leases B) Fully executed residential lease agreements are not required to be reviewed and initialed C) Keep financial records for three years D) Keep residential leases for three years

D) Keep residential leases for three years

Question #2 of 7 Question ID: 1150077 A buyer broker emailed the client a buyer broker agreement before the two began working together. The client downloaded the form, wet-signed the agreement, scanned the agreement, uploaded it, and emailed it to the buyer broker. What must the buyer broker employment have in order to meet the Arizona Revised Statutes for real estate employment agreements? A) A cancellation clause B) Specific terms for showing of properties C) The client's attorney's name D) Signatures of all parties

D) Signatures of all parties

Question #2 of 2 Question ID: 1150179 A landlord may legally practice a blanket policy of refusing to lease to felons. True False Explanation

False The answer is false. Felonies must be considered on a case-by-case basis rather than according to a blanket policy of no leasing to felons.

If the tenant does not allow access after the two-day notice, ARS 33-1376 states:

If the tenant refuses to allow lawful access, the landlord may obtain injunctive relief to compel access, or terminate the rental agreement. In either case, the landlord may recover actual damages.

Base Line

Imaginary line running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the government survey system

Uranium

Sanders, Arizona, has high levels of uranium, over the 30 parts per billion benchmark, and running up to 50 parts per billion, all due to uranium mining in the past.

General provisions that apply statewide Irrigation Non-Expansion Areas (INAs) Active Management Areas (AMAs) where groundwater overdraft is most severe

The Code established three categories of water management:

Group Homes

These facilities are designed to facilitate services to people with disabilities, and under fair housing laws a seller is prohibited from disclosing the existence of neighborhood group home.

Time-share ownership

Time-shares are regulated by Title 32, Chapter 20, Article 9. Under ARS 32-2101(57), "timeshare" or "timeshare property" means real property ownership or right of occupancy in real property pursuant to article 9 of this chapter. For the purposes of this chapter, a timeshare is not a security unless it meets the definition of a security under section 44-1801.

Judicial foreclosure is adjudicated in the courts. Certain mortgages must be judicially foreclosed in Arizona under

Title 33. Chapter 6. Article 1 Mortgages and Article 2 Foreclosure. Deeds of trust may also be judicially foreclosed.

Sewer connections

To assure that the seller has a sewer connection, the city charging the sewer fee should be contacted for confirmation that the seller's property is connected according to the city's records. In some Arizona areas, it is recommended that the sewer connecting lines be inspected during the due diligence period because many need replacement and that cost must be borne by the property owner. In some locations, a seller can acquire insurance to cover the cost of any repairs or replacement, usually through a home warranty company.

When these homes come from the factory, they are personal property and may continue to be so until such time as

an affidavit of affixture is filed with the county. The factory will install a data plate affixed inside the home; it may be found in a kitchen cabinet, an electrical panel, the hot water closet, or a bedroom closet. It contains the following information: the manufacturing plant, the serial number, the model, and the date of manufacture.

A PC or PLLC must file

articles of organization with the Arizona Corporation Commission before requesting status from the Department.

An executed contract is

complete with all obligations to the contract met by the parties.

If the buyer is financing the purchase, the lender will send to the escrow officer a Closing Disclosure as required by the Dodd-Frank Act. The escrow officer will then put together a closing document for both the buyer and the seller, as Arizona real estate statutes require disclosure of transaction monetary disbursals and receipts for both parties. The settlement statement will list

items that the seller has paid in arrears as a debit to the seller and a credit to the buyer. An example would be property taxes.

A deed of trust is significantly different from a mortgage in that the buyer in a mortgage has both legal and equitable title and the lender has only a lien interest. However, in a deed of trust, a third party is holding

legal title for the benefit of a lender. This third-party process generally favors lenders in foreclosure because some statutory rights of the borrower are limited.

A professional limited liability company (PLLC) is primarily formed by a

licensee in order to protect the person and his assets from involuntary lawsuits arising from a business transaction.

A delegated broker is a _____________who holds a broker's license, works for an ___________, and is delegated by the designated broker to perform certain broker tasks.

licensee, employing broker

Arizona Owner-Occupied Property Taxes The tax man cometh Arizona property taxes on owner-occupied residences are levied based on the

limited property value (LPV) or assessed value not the full cash value (FCV) or current market value. Every county determines rate. The LPV is usually less than the FCV, and it can never be higher.

The form can be used for more than disclosing dual agency to a buyer and a seller in the same transaction. A sales associate who is working with two buyers wanting to make an offer on the same property would find a possible conflict of interest situation and want to limit the representation by using the

limited representation form

A licensee who does not get an employment agreement in writing and who then does not receive the commission as desired will have

little recourse in requiring payment from a buyer or a seller.

Community property with right of survivorship is for

married persons only, with equal shares taken at the same time and the surviving spouse becoming 100% owner of the property.

The Department may issue a temporary broker license to a licensed or a nonlicensed person in the event of

death of the designated broker in order to manage pending business. Often, the license is issued to a salesperson or staff person, but it may be issued to an unlicensed surviving spouse, kin, or personal representative. The license may not be issued for more than 90 days. The license may be issued to the surviving spouse, kin, or personal representative in the case of death. In the event of illness, injury, or insanity, the license may be issued to the surviving spouse, kin, employee, legal guardian, or conservator.

A managing broker is a licensee who holds a broker's license, works for an employing broker, and is ____________ by the designated broker to act as a managing broker for a _____________.

delegated, particular office.

Since Hill v. Jones 725 P.2d 1115 (Ariz. Ct. App. 1986), Arizona courts have held that a seller of real property must

disclose all known facts that materially affect the value of the property and that are not readily observable or known to the buyer.

The employing broker is the

entity

Community property is for married persons only, with

equal shares taken at the same time. The death-departing spouse devises who will be heir to her share. The surviving spouse will co-own, as a tenant in common, with the heir(s) of the departed spouse.

E&O Insurance

errors and omissions insurance Professional liability insurance protecting against liability claims caused by mistakes in the course of business. No coverage is available for deliberate, reckless or criminal behavior.

The remainderman has an estate of

expectancy.

You may lose the right to use the water of the river system if you

fail to file a statement of claimant. This loss may happen even though you have received a permit, certificate, or other approval from ADWR. A statement of claimant filed in an adjudication is not legal permission to use water. A person does not obtain a right to use water by filing a statement of claimant form. Rights to use water must be acquired in accordance with state or federal law.

Stanard liens are effective for

five years.

Tax, restitution, racketeering, and utility liens are effective for

forever, they do not expire

During the executory phase of a purchase agreement, the seller

has legal title and the buyer has equitable title.

"Owner"

means the person, or the person's successor in interest, who causes a building, structure or improvement to be constructed, altered or repaired, whether the interest or estate of the person is in fee, as vendee under a contract to purchase, as lessee, or other interest or estate less than fee.

Mortgages and deeds of trust given as security for a loan made by a construction lender take priority over

mechanics' or materialmen's liens if the mortgage or deed of trust is recorded within 10 days after labor began or materials were originally furnished. See ARS 33-992(A).

A PLLC may only be formed for a person who provides a professional service who is licensed in Arizona as a

medical doctor, an attorney, a certified public accountant, or a real estate licensee. If an Arizona salesperson licensee or a designated broker of an employing brokerage chooses to form an entity for asset protection, that person may choose to set up and operate out of a PLLC.

Arizona's mechanic's lien statute is mainly for the purpose of

new construction, but also for remodels, repairs, et al. According to ARS 33-992 and ARS 33-992.01,

Single agency exists when the employing broker, through the sales associate, represents

only one side of a transaction. While the requirements of an agent acting as a single agent might differ from state to state, single agency is an accepted practice everywhere.

A fiduciary is someone who

owes a duty of loyalty to safeguard the interests of another person or entity

Long-term capital gains tax is a tax on

profits from the sale of an asset held for more than a year. Long-term capital gains tax rates are 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.

Short-term capital gains tax is a tax on

profits from the sale of an asset held for one year or less. Short-term capital gains tax rates equal your ordinary income tax bracket.

ARS 11-482(C)

states: If a legal description sufficient to determine the physical location of real property has been recorded, a reference by record location to the instrument containing the description is a sufficient description of the real estate. The reference may be made to maps or plats, surveys, deeds, or any other recorded instrument but must contain language indicating that only the legal description is to be incorporated in the subsequent instrument.

The law requires that every person (except wage laborers) who furnishes labor, professional services, materials, machinery, fixtures, or tools to a construction project give notice of his

statutory lien rights to the owner, construction lender, original contractor, and the person with whom the claimant has contracted. The notice is to be given within 20 days of commencement of work.

Before Arizona became a community property state, married couples took title to property as joint tenants with right of

survivorship. In fact, many of the deeds of older married couples today still reflect JTWRS.

Compensation can only be paid by an employing broker to

the employing broker's licensees, a former licensee of the employing broker if the licensee's commission was earned while working for the employing broker, and another employing broker. An employing broker cannot make a payment directly to the licensee of another employing broker, unless a commission was earned by the licensee while with that broker.

The beneficiary deed is frequently being used

in Arizona instead of the life estate. It's less expensive. It's forgiving and can be easily revoked.

uestion #5 of 11 Question ID: 1150010 If a designated broker's license expires on December 31, 2020, when does the employing broker's license expire? A) December 31, 2020 B) December 31, 2019 C) Two years from the last renewal D) Four years from the last renewal

A) December 31, 2020

Organization and Management of Brokerage Firms (cont.) Nonresident Licensees and Brokers Broker living out of state A nonresident employing broker is one who maintains an office outside of the State of Arizona. If the broker uses a trust account for Arizona transactions, the trust account must be maintained in

Arizona. If the broker has documents, they must be stored in Arizona and the nonresident employing broker must have the name of the statutory agent in Arizona on file with the Department.

Question #11 of 11 Question ID: 1150012 The Rules and Commissioner's Standards are common names for A) Standard of practice B) Arizona Administrative Code C) Substantive policy statement D) Arizona statutes

B) Arizona Administrative Code

Question #7 of 11 Question ID: 1150001 The role of the Advisory Board is to A) liaison with the governor. B) advise the Commissioner. C) make policy. D) create substantive policy statements.

B) advise the Commissioner.

Unit 23: Real Estate Brokerage 10% !!!!

Key Terms brokerage firm delegated broker designated broker employing broker sole proprietor

Practice Activity The designated broker is the ____________or the person who manages and supervises for the employing broker.

natural person

Sole Proprietors

one who runs an unincorporated business by himself. If the individual runs the business without any type of entity, the broker, who is a sole proprietor, is liable for anything that goes wrong. A sole proprietor may have agents under him

A licensee's license will also become inactive if an employing broker

terminates the licensee and the licensee isn't being hired by a new broker. In both instances, the license can be made active by associating to a new broker.

Question #11 of 15 Question ID: 1150249 Which of the following statements about lead-based paint is NOT correct? A) Lead in water can be absorbed through the skin. B) Homes built before 1986 are more likely to have lead pipes, fixtures, and solder. C) Lead can affect almost every organ and system in your body. D) Lead is particularly dangerous to children because their growing bodies absorb more lead than adults do and their brains and nervous systems are more sensitive to the damaging effects of lead.

A) Lead in water can be absorbed through the skin.

Question #2 of 15 Question ID: 1150249 Which of the following statements about lead-based paint is NOT correct? A) Lead in water can be absorbed through the skin. B) Homes built before 1986 are more likely to have lead pipes, fixtures, and solder. C) Lead is particularly dangerous to children because their growing bodies absorb more lead than adults do and their brains and nervous systems are more sensitive to the damaging effects of lead. D) Lead can affect almost every organ and system in your body.

A) Lead in water can be absorbed through the skin.

Question #1 of 11 Question ID: 1150007 The Commissioner may deny a licensee renewal of a license under which of these conditions? A) Licensee has been convicted of a DUI B) Licensee notifies the Department about a minor traffic accident C) Licensee has not renewed his license within 24 months of licensing or since the last renewal D) Licensee has not provided all required paperwork and paid the fees

A) Licensee has been convicted of a DUI

ARS 33-1802(1) defines association:

"Association" means a nonprofit corporation or unincorporated association of owners that is created pursuant to a declaration to own and operate portions of a planned community and that has the power under the declaration to assess association members to pay the costs and expenses incurred in the performance of the association's obligations under the declaration.

Pets are not welcome in many properties and the tenant is usually aware of the landlord's restrictions prior to filling out the occupancy application; however, after move-in, the tenant acquires a pet. This action would give rise to a 10-day material falsification notice from the landlord to the tenant to remove the pet or the lease will be terminated. Perhaps the tenant removes the pet the first time and then the pet reappears. On the second breach, the

10-day notice would become noncurable and the lease would be terminated.

License Transfer and Compensation As with many states, the manner in which an employing broker hires licensees is determined by the broker and the broker's policies. Most employing brokers in Arizona use independent contractor agreements and issue a Form

1099-MISC Others hire licensees as employees and issue a Form W-2.

Payment of commissions can be tricky when licensees leave an employing broker. A licensee is entitled to all earned commissions while with an employing broker, even if payment takes place after the licensee's departure. See Substantive Policy Statement

2005.08.

FHA properties have new rules as of

2014 regarding deeds in lieu and preforeclosure sales, too numerous to mention, but notice is given to licensees to investigate the rules should they encounter a potential client in the position of doing either.

Should a departing licensee have open escrows at the time of departure, that licensee may not continue to work the escrows to fruition according to the licensing laws, unless the escrows are transferred to the new broker. See ARS

32-2125.01

A mobile home identified in an affidavit of affixture recorded pursuant to section

33-1501 (mobile home park) is assessed as personal property.

"You can spend upwards of $100,000 defending a simple failure to disclose lawsuit," says a noted insurance company whose statistics indicate that disclosure issues are ranked 1, 6, and 8 out of their top 10. Two statistics cited by Mondics Insurance Group in their "Avoiding the E&O Claims Minefield" presentation are particularly worrisome:

50-75% or more of all E&O Claims involve Failure to Disclose. Of that, 90% of the time, the agent/broker did not have the information. In a case such as this, the plaintiff's lawyer will argue that the agent or broker should have known about the material defect. (You can read the rest of "Avoiding The E&O Claims Minefield" at https://mondicsinsurance.com/pdfs/TAR_MondicsLandy_ErrorsWebinar.pdf.)

Planned Unit Development as defined by HUD (Arizona has no statutory definition):

: "A PUD is defined as a mixed-use residential development of single-family dwellings in conjunction with rental, condominium, cooperative or town house properties." A Planned Unit Development ("PUD") is intended to be a stand-alone document of zoning regulations for a particular project.

Unsubdivided and Subdivided Lands (cont.) Subdivided Lands

A "subdivider" is someone who offers "for sale or lease six or more lots, parcels, or fractional interests...." ARS 32-2101(55) Subdivision or subdivided lands refer to either unimproved or improved lands or property intended to be offered for sale or lease, now or in the future, and is or will be divided into six or more lots, parcels, or fractional interests. It includes cooperatives and residential condominiums. Not included under the definition are the following: Lots that will be divided into 36 acres or more Commercial or agricultural lands that are leased

Demand for payoff

A beneficiary who willfully fails to prepare and deliver a payoff demand statement for fourteen or more days after receipt of a written demand is liable to the entitled person for all damages sustained for failure to deliver the statement. The beneficiary is also liable to the entitled person for $500 whether or not actual damages are sustained.

Brokerage Firm

A brokerage firm is a real estate company with a legal entity licenses separately from the person operating the business as a licensed broker to represent people buying and selling or leasing properties.

Buyer Disclosures

A buyer must disclose anything material to the sale—for example, a double escrow. It's material that a seller know that the proceeds from the closing of the buyer's current home will pay for the seller's property. A double escrow with a simultaneous closing is often the vehicle. Another example of buyer disclosure would be a buyer making offers on multiple properties and going into escrow on all of them. Can the buyer qualify for all of them? In Lombardo v. Albu, the court opined: "Arizona real estate agents have a duty to deal fairly with all other parties to the transaction, and they have a duty to disclose certain material information, including any information that the buyer is or may be unable to perform due to insolvency or otherwise."

Disclosure Exception Example Situation 2: The seller hires a relatively new agent to list the property where the home invasion/murder took place. The agent was not in the city at the time it happened and had no knowledge of the situation. The seller never mentioned it.

A buyer's agent presented an offer, which was accepted. During the inspections, the buyer heard from the termite inspector about the "murder." The buyer chose to cancel the escrow and the agreement.

90-hour prelicensing course required of real estate salespersons or brokers who deal with residential, commercial, time-share, or property management.

A cemetery salesperson or broker must pass an exam demonstrating knowledge of plot ownership, deeds, leases, certificates, liens, knowledge of establishing, managing, maintaining, operating, preserving and conducting a cemetery; but are not required to attend the

Chapter 13 bankruptcy

A chapter 13 bankruptcy is the only choice for borrowers who wants to keep their property, either in Arizona or another state, at the end of the bankruptcy process. A chapter 13 bankruptcy allows borrowers to make up their overdue payments over time and to reinstate the original loan agreement. a reorganization form of bankruptcy for individuals that allows the debtors to keep their property and use their income to pay a portion of their debts over three to five years

Question #1 of 13 Question ID: 1150174 Being a listing agent is an exciting experience that usually culminates in the closing of a transaction and the agent getting paid. Licensing rules require that listing brokers do and don't do certain things. Which of the following statements is inaccurate? A) Licensees may not submit offers after the listing expires. B) Licensees must ensure the client has received a copy of the documents they sign. C) Licensees may not disclose terms and conditions of another licensee's offer to other agents without the express permission of their client. D) Licensees must submit all offers, written or oral, until the expiration of the listing, the closing of escrow, or until relieved of the duty by the client.

A) Licensees may not submit offers after the listing expires.

Question #6 of 10 Question ID: 1150120 Three statements are true about a deed in lieu. Which statement is FALSE or inaccurate? A) A deed in lieu will clear out all other liens against the property. B) The lender will assume any liens against the property, if taking the property. C) Lender is not required to take a deed in lieu and may choose to foreclose. D) A reason for a deed in lieu would be a financial hardship.

A) A deed in lieu will clear out all other liens against the property.

Question #7 of 10 Question ID: 1150280 Which of these statements about land measurement is incorrect or FALSE? A) A quadrangle has 16 sections. B) A mete is a boundary line. C) A township has an area of 23,040 acres. D) A section has 640 acres.

A) A quadrangle has 16 sections.

Question #12 of 13 Question ID: 1150161 Which statement regarding the proper handling of offers on a property is FALSE? A) Agents may submit written offers only. B) Agent of the seller should submit all offers until closing. C) Offers can be withdrawn. D) Agents must promptly submit all offers, including verbal offers, to the seller.

A) Agents may submit written offers only.

Question #12 of 15 Question ID: 1150246 Which of the following statements is FALSE? A) All underground storage tanks are regulated by EPA. B) ADEQ regulates for the EPA the Clean Air Act. C) EPA regulates the Clean Water Act. D) ADEQ regulates waste disposal systems.

A) All underground storage tanks are regulated by EPA.

Question #8 of 10 Question ID: 1150270 A "subdivision" or "subdivided lands" refers to property intended to be offered for sale or lease, now or in the future, and is or will be divided into six or more lots, parcels, or fractional interests. Which of these is NOT included in the definition? A) Lots that will be divided into 36 acres or more B) Lots that are unimproved lots C) Lots that are improved lots D) Lots that will be divided into time-share interests

A) Lots that will be divided into 36 acres or more

Question #6 of 10 Question ID: 1150121 Carla filed for chapter 7 bankruptcy. The federal bankruptcy court decided that her _____________ test showed that she could not use chapter 7 and would have to use chapter - A) Means B) Income C) Credit D) Assets

A) Means

Question #9 of 11 Question ID: 1150004 To file against the Arizona Recovery Fund you must do three of these four statements. Which one is NOT a requirement? A) Must be filed within three years B) Must get a judgment from a court of legal jurisdiction C) Must extinguish all efforts to collect on the judgment D) Must be financially harmed by a licensee under the statutes and rules

A) Must be filed within three years

Question #5 of 7 Question ID: 1150089 The buyer broker sends a buyer broker agreement to the buyer for signature. The buyer downloads the agreement, wet signs it, scans it, uploads it, and emails it back to the agent. The agent sends the buyer an email saying, "Thank you." Does the buyer broker have an enforceable agreement? Indicate the best answer. A) Only if the buyer broker's signature is also on the agreement B) Yes C) Under the statute of frauds, it is an enforceable agreement D) No

A) Only if the buyer broker's signature is also on the agreement

Question #6 of 10 Question ID: 1150199 May a landlord evict a hoarder? A) Only if your lease requires that all rooms and hallways allow for unimpeded movement for safe exiting during an emergency, and the landlord inspects periodically B) Only if the hoarding has the property in disrepair C) Hoarding considered a disability; tread with caution D) Yes and lease says tenant must keep the property in good repair

A) Only if your lease requires that all rooms and hallways allow for unimpeded movement for safe exiting during an emergency, and the landlord inspects periodically

Question #7 of 13 Question ID: 1150170 After the felonious burglary of the home in escrow, the buyer learns of the incident from a neighbor just before closing escrow. Can the buyer cancel the escrow because of the burglary? A) Probably not, because the inspection period is over B) Yes, because his insurance might be higher C) Yes, because the buyer has five days after seller updates SPDS to cancel D) Yes, because the issue is material

A) Probably not, because the inspection period is over

Question #9 of 11 Question ID: 1150054 A licensee wishes to protect his personal assets in the event of a lawsuit arising from a business transaction can form which of these entities? A) Professional corporation B) Incorporation C) Corporation D) Partnership

A) Professional corporation

Question #10 of 11 Question ID: 1150015 Continuing education categories required for license renewals include three of these four. Which of the following is NOT a required category? A) Property Management B) Agency C) Contract D) Commissioner's Standards

A) Property Management

Question #10 of 13 Question ID: 1150145 Finder's fees are allowed only under one special situation. Of these four statements, which is FALSE? A) Property managers must keep records of finder's fees for five years. B) A tenant who refers another tenant to her apartment manager may be awarded a finder's fee. C) A tenant can collect up to $200 credit to rent. D) The tenant is eligible for a finder's fee up to five times per year.

A) Property managers must keep records of finder's fees for five years.

Question #9 of 13 Question ID: 1150172 A purchaser of a raw, undeveloped lot or parcel who has not seen the property has what rescission period of time? A) Six months B) Seven calendar days C) Seven business days D) Three months

A) Six months

Question #2 of 13 Question ID: 1150147 Three of these statements are true about Arizona real estate agreements. Which one is NOT true? A) If he changes his mind, the seller can cancel the agreement and not assume any consequences. B) The buyer does not have to use cash as consideration. C) An "as is" contract requires the seller to disclose all latent material defects. D) A buyer has an opportunity to cancel the agreement through different contract contingencies.

A) If he changes his mind, the seller can cancel the agreement and not assume any consequences.

Question #5 of 10 Question ID: 1150196 If the tenant discovers that the out-of-state landlord is not registered with the state as a rental property, the tenant has three remedies. Which of the following is NOT a remedy? A) Issue a 5-day notice to cure to the landlord B) Issue a 10-day notice to cure C) Stay and ignore the situation D) Terminate the lease if landlord does not comply

A) Issue a 5-day notice to cure to the landlord

Question #5 of 10 Question ID: 1150286 Which statement does NOT describe the Public Land Survey System? A) It divides the land into quadrants only. B) It divides the land into quadrants, townships, and sections. C) Originally proposed by Thomas Jefferson, the PLSS began shortly after the Revolutionary War. D) The PLSS is used to divide public domain lands, which are lands owned by the federal government for the benefit of the citizens of the United States.

A) It divides the land into quadrants only.

Question #9 of 10 Question ID: 1150106 Which of these does NOT describe a REIT? A) Its requirements are set by the legislature B) Has transferrable shares C) Includes 100 or more members D) Stands for real estate investment trust

A) Its requirements are set by the legislature

ARS 33-201 defines estates in land and the duration: A. Estates in lands, as respects the extent of the interest of the holder, are divided into:

A. Estates in lands, as respects the extent of the interest of the holder, are divided into: Estates of inheritance. An estate of inheritance shall be termed a fee simple or fee, and when not defeasible or conditional shall be a fee simple absolute. Estates for life. Determinable fee simple estates. Estates for years. Estates at will. Estates by sufferance.

Water rights as defined in ARS 45-141

A. The waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, whether perennial or intermittent, flood, waste or surplus water, and of lakes, ponds and springs on the surface, belong to the public and are subject to appropriation and beneficial use as provided in this chapter. The statute goes on to speak about beneficial use, time limitations, and the Colorado River waters.

Unsubdivided and Subdivided Lands (cont.) Improved lots

ARS 32-2101 defines an improved lot: "Improved lot or parcel" means a lot or parcel of a subdivision upon which lot or parcel there is a residential, commercial, or industrial building or concerning which a contract has been entered into between a subdivider and a purchaser that obligates the subdivider directly, or indirectly through a building contractor, to complete construction of a residential, commercial or industrial building on the lot or parcel within two years from the date on which the contract of sale for the lot is entered into.

Membership camping

ARS 32-2101(37) defines a membership camping contract as an agreement offered or sold in this state evidencing a purchaser's right or license to use the camping or outdoor recreation facilities of a membership camping operator and includes a membership that provides for this use.

This case highlights well the sort of conflict that can arise in dual agency, even if it is disclosed. It's important to note that _________________doesn't require sellers or licensees to disclose whether a property was the site of a death or felony, was owned or occupied by an individual with HIV/AIDS, or if it is located in the vicinity of a sex offender unless specifically asked. No disclosure is required if not asked, but if asked specifically whether a convicted sex offender lives nearby, a seller or licensee must answer truthfully.

ARS 32-2156

Question #5 of 15 Question ID: 1150251 Conveying a property with a septic system is frequently done in Arizona. Which statement is FALSE? A) The required transfer form must show that the certification and pumping occurred within six months of transfer of title. B) The setback between a septic system and a well is 50 feet. C) Depending on the soil, the three most popular alternative waste systems are mound, conventional septic, and aerobic systems. D) Currently all properties with a septic system are required to have them certified prior to conveyance.

B) The setback between a septic system and a well is 50 feet.

Question #8 of 10 Question ID: 1150101 Three of these statements are true about a mortgage foreclosure. Which one is FALSE? A) The sale is a sheriff's sale. B) There's a six-month reinstatement period. C) There's an acceleration of the debt. D) The borrower has equity of redemption.

B) There's a six-month reinstatement period.

Question #8 of 10 Question ID: 1150285 The W1/2 of the NW1/4 of the NW1/4 of the SE1/4 of the SW1/4 of a section is to be paved for parking at a cost of $2.25 per square foot. The total paving cost would be A) $147,015. 00. B) $490,050. 00. C) $122,512.50. D) $115,600.00.

C) $122,512.50. The answer is $122,512.50. Determine the acreage of the parcel: 1.25 acres × 43,560 ft = 54,450 sq ft × $2.25 = $122,512.50.

Question #3 of 11 Question ID: 1150013 A licensee changes her home address and phone number. How soon must the licensee notify the Department? A) 14 calendar days B) 5 business days C) 10 calendar days D) 10 business days

C) 10 calendar days

Question #9 of 10 Question ID: 1150287 Jesse had a whole section of land. As land prices rose, Jesse decided to subdivide his property. First he sold 1/2 his land in 2005. Then he decided to sell half of what he kept in 2007. Of the ____ acres he had left, he decided to split the property into five equal lots of ____. He intended to price them at $5,000/acre. He'll receive __________ upon final sale. A) 80, 16, $400,000 B) 160, 32, $160,000 C) 160, 32, $800,000 D) 80, 16, $900,000

C) 160, 32, $800,000

Question #2 of 10 Question ID: 1250781 Which of these statements about rescission is FALSE? A) A time-share contract has a 10-calendar-day rescission period from the time the time-share purchase agreement is executed B) A buyer of land who completes the purchase before receiving the public disclosure report has three years to rescind the agreement. C) A purchaser of an improved lot has a seven business day rescission period from time of contract execution D) A purchaser of an unimproved lot who purchase the lot without physically seeing the lot, has six months to see the property and rescind the contract

C) A purchaser of an improved lot has a seven business day rescission period from time of contract execution

Question #10 of 10 Question ID: 1150280 Which of these statements about land measurement is incorrect or FALSE? A) A township has an area of 23,040 acres. B) A section has 640 acres. C) A quadrangle has 16 sections. D) A mete is a boundary line.

C) A quadrangle has 16 sections.

Question #4 of 10 Question ID: 1150281 Three of these are characteristics of a section and one is not. Which is NOT a characteristic of a section? A) A section is 1 square mile. B) Most every section is contiguous to eight other sections. C) A section has two quadrants. D) A section is 1/36 of a township.

C) A section has two quadrants.

Question #14 of 15 Question ID: 1150231 INAs are regulated by the ADWR. Of the four statements below, which one is FALSE? A) Harquahala Valley, Douglas, and Joseph City are INAs. B) Nonexempt wells must measure and report annual water use. C) ADEQ limits new irrigation in INAs. D) INAs are areas where groundwater depletion is not as severe, but needs to be regulated.

C) ADEQ limits new irrigation in INAs.

Question #6 of 10 Question ID: 1150207 Kent wanted to purchase a vacation rental property. He thought it would be a great investment but didn't know what kind of property would be best. So, he met with Vicky of VR Specialists. She reminded him that there were differences in using a property as a vacation rental rather than a long-term rental. Which of the following statements is NOT true about vacation rentals? A) A vacation rental is part of transient lodging. B) A vacation rental is 29 days or less. C) ARLTA applies to vacation rentals. D) Vacation rentals must pay transaction privilege taxes.

C) ARLTA applies to vacation rentals.

Question #9 of 10 Question ID: 1150207 Kent wanted to purchase a vacation rental property. He thought it would be a great investment but didn't know what kind of property would be best. So, he met with Vicky of VR Specialists. She reminded him that there were differences in using a property as a vacation rental rather than a long-term rental. Which of the following statements is NOT true about vacation rentals? A) A vacation rental is part of transient lodging. B) A vacation rental is 29 days or less. C) ARLTA applies to vacation rentals. D) Vacation rentals must pay transaction privilege taxes.

C) ARLTA applies to vacation rentals.

Question #1 of 15 Question ID: 1150254 Of the following statements related to the Groundwater Management Act, which was created in 1980, which one is false or is inaccurate? A) The five AMAs include 80% of Arizona's population and 70% of the state's groundwater overdraft. B) ADWR is the administrator of the Code. C) All five AMAs were established when the Act became law. D) The 100-year assured water supply was defined for developers.

C) All five AMAs were established when the Act became law.

Question #13 of 15 Question ID: 1150254 Of the following statements related to the Groundwater Management Act, which was created in 1980, which one is false or is inaccurate? A) ADWR is the administrator of the Code. B) The 100-year assured water supply was defined for developers. C) All five AMAs were established when the Act became law. D) The five AMAs include 80% of Arizona's population and 70% of the state's groundwater overdraft.

C) All five AMAs were established when the Act became law.

Question #1 of 11 Question ID: 1150065 Andrew is an associate broker for Grand Horizons Realty and was recently asked by his designated broker to take over the responsibilities of reviewing the transaction documents, initialing them, and making certain the files were in order before being put away. Which of the following is NOT a true statement? A) Andrew must take three Broker Management Clinics before beginning his duties. B) A letter from the designated broker delegating Andrew must be on file. C) Andrew cannot hire or fire. D) Andrew could be a branch manager.

C) Andrew cannot hire or fire.

Question #10 of 10 Question ID: 1150195 The rental application is used by the landlord to screen potential tenants. All but one of these are legitimate screening items by a landlord. A) Applicant has pets B) Applicant has been convicted of a felony C) Applicant is a drug user in rehab D) Applicant has poor credit

C) Applicant is a drug user in rehab

Question #8 of 10 Question ID: 1150103 Janice and Larry are getting married before buying a house. Janice has been married before and has a young son. Larry's wife passed away early in their marriage and there are no children. In purchasing the house, they have to decide how to take title to the property. They can take title to the property in a way that benefits the son in the event of one of their deaths. Which one is it? A) Sole and separate property by Janice B) Joint tenancy with right of survivorship C) Community property D) Community property with right of survivorship

C) Community property

Question #5 of 10 Question ID: 1150192 If you send a five-day pay or quit notice by registered mail and you don't hear from the tenant, and the tenant does not sign for the registered letter, when is it deemed received by the tenant? A) The day it is sent B) Three days from the date it is sent C) Five days from the date it is sent D) Two days from the date it is sent

C) Five days from the date it is sent

Question #5 of 10 Question ID: 1250769 The buyers of a three-acre property outside of Casa Grande paid $300,000 with a $50,000 down payment, using a land contract to purchase their house and grounds. Which of the following statements is accurate? A) If they default within the first six months, their grace period is 60 days. B) The loan is not an installment loan. C) If they default within the first six months, their grace period is 30 days. D) A forfeiture would be judicial.

C) If they default within the first six months, their grace period is 30 days.

Question #2 of 10 Question ID: 1150286 Which statement does NOT describe the Public Land Survey System? A) Originally proposed by Thomas Jefferson, the PLSS began shortly after the Revolutionary War. B) The PLSS is used to divide public domain lands, which are lands owned by the federal government for the benefit of the citizens of the United States. C) It divides the land into quadrants only. D) It divides the land into quadrants, townships, and sections.

C) It divides the land into quadrants only.

Question #7 of 10 Question ID: 1150198 If the tenant is late paying his rent and the landlord gives the tenant a five-day notice and the tenant does not pay within the five days after receipt of the notice, what happens next? Which of these four answers is the MOST correct? A) Landlord files for order of vacation by tenant B) Landlord files for eviction C) Landlord files for a special detainer D) Landlord files for a writ of restitution

C) Landlord files for a special detainer

Question #1 of 10 Question ID: 1150199 May a landlord evict a hoarder? A) Yes and lease says tenant must keep the property in good repair B) Only if the hoarding has the property in disrepair C) Only if your lease requires that all rooms and hallways allow for unimpeded movement for safe exiting during an emergency, and the landlord inspects periodically D) Hoarding considered a disability; tread with caution

C) Only if your lease requires that all rooms and hallways allow for unimpeded movement for safe exiting during an emergency, and the landlord inspects periodically

Question #2 of 10 Question ID: 1150193 Not all rental properties are subject to the Arizona landlord-tenant laws. Which of these falls under the ARLTA? A) Life estate B) Vacation rentals 29 days or less C) Rentals 30 days or more D) Holder of a proprietary lease

C) Rentals 30 days or more

Central Arizona Groundwater Replenishment District (CAGRD)

Central Arizona Groundwater Replenishment District; a groundwater replenishment authority to be operated by the Central Arizona Project throughout its three-county service area.

A specific requirement regarding CAGRD, Central Arizona Groundwater Replenishment District: Any subdivision built in 1995 or later in the Phoenix, Pinal, or Tucson AMA, requires a subdivision property owner to pay a cost to replenish groundwater. It's a line item on their annual tax bill. After receiving the application from the potential subdivider, the Department will do as follows:

Check for a certificate of assured water supply from the Arizona Department of Water Resources Attempt to ascertain that parties are not "acting in concert" Check to see that the final plat has been certified by the city, town, or county Review any deed restrictions Review disclosures within 1 mile radius of the subdivision

Each county has its own rates. As a rule, the four most important classifications that a licensee will need to know are as follows:

Commercial 16-20% Land 15-16% Residential 10% Residential rentals 10% The rates above will be different depending on the county.

If a license is terminated by the Department due to actions surrounding the payout to a harmed consumer, the

Commissioner may reinstate the license after full repayment to the recovery fund by the licensee, under ARS 32-2131

When Arizona became a community property state, joint tenancy became a way to take title as two or more people, related or unrelated to each other. Arizona is one of nine community property states and regulates both joint tenants with right of survivorship and the two different community property types under ARS 33-431:

Community property with right of survivorship Community property

Arizona Blue-Stake - Arizona 811 - E-Stake

Contact Arizona 811 from anywhere in Arizona at least two full working days prior to digging. Tell the specialist where you plan to dig and what type of work you're doing, and the affected local utility companies will be notified. They'll send a locator to mark the underground lines, pipes and cables at your dig site so you'll know what's below - and be able to dig safely.

Question #1 of 10 Question ID: 1150297 Robert and Sharon found a land parcel in a new subdivision near the creek one day and made an offer on it through Kelly, the salesperson who was also the listing agent. Of the following statements, which is NOT accurate? A) The buyers can withdraw the offer at any time before acceptance and delivery. B) The buyers should investigate flood insurance. C) The transaction is one of limited representation. D) Buyers will receive an affidavit of disclosure.

D) Buyers will receive an affidavit of disclosure.

Question #8 of 11 Question ID: 1150038 Which of the following actions may an unlicensed person legally perform? A) Open up a property for a buyer who is under contract on the property without a licensee present B) Open the door and assist a home inspector without a licensee present C) Conduct a tenant or buyer walk-through without a licensee present D) Deliver transaction documents or information to the seller

D) Deliver transaction documents or information to the seller

Question #11 of 15 Question ID: 1250779 Which of the following statements is NOT true about regulated wells in Arizona? A) Wells that serve over 25 residents are considered community water systems and under more requirements. B) The buyer must notify the ADWR within 30 days of any wells on the property after taking possession of the property. C) The well registry number will begin with the numbers 55-. D) Exempt wells pump 35 GPM or more.

D) Exempt wells pump 35 GPM or more.

Question #8 of 15 Question ID: 1150244 Which of the following statements about ADEQ is NOT true? A) It was established by the Arizona Legislature in 1987 in response to growing concerns about groundwater quality. B) The Arizona Department of Environmental Quality's mission is to protect and enhance public health, welfare, and the environment in Arizona C) It is responsible for inspections and enforcement of air quality compliance, waste program compliance, and water quality compliance. D) It regulates mold issues along with other water issues.

D) It regulates mold issues along with other water issues.

Question #1 of 10 Question ID: 1250784 Three of these things are true about an Affidavit of Disclosure. Which one is FALSE? A) Required of all subsequent sellers B) Required on all metes and bounds properties in unincorporated areas of Arizona C) Required to be recorded with the deed and the affidavit of value D) Required to be given to a buyer at least five days before the transfer of the property

D) Required to be given to a buyer at least five days before the transfer of the property

Question #9 of 10 Question ID: 1250784 Three of these things are true about an Affidavit of Disclosure. Which one is FALSE? A) Required to be recorded with the deed and the affidavit of value B) Required of all subsequent sellers C) Required on all metes and bounds properties in unincorporated areas of Arizona D) Required to be given to a buyer at least five days before the transfer of the property

D) Required to be given to a buyer at least five days before the transfer of the property

Question #8 of 15 Question ID: 1150226 Which of the following is NOT true about arsenic? A) Arsenic is found in air, water, and food sources. B) Arsenic is a heavy metal. C) Arsenic is naturally found in the earth's crust. D) Reverse osmosis is the only way to remove arsenic from a well.

D) Reverse osmosis is the only way to remove arsenic from a well.

Question #12 of 15 Question ID: 1150232 Four AMAs (Active Management Areas) were established in 1980 along with the Arizona Department of Water Resources. Which one is NOT one of the original four AMAs? A) Pinal B) Tucson C) Phoenix D) Santa Cruz

D) Santa Cruz

Question #6 of 15 Question ID: 1150225 Which of the following is NOT true about termites? A) Swarming season is mating season. B) Subterranean termites cause the most damage. C) There are over 17 termite species identified in Arizona. D) Termite bodies have a "waist."

D) Termite bodies have a "waist."

Question #2 of 11 Question ID: 1150056 An ad reads "$250,000, low down payment, call: 555-888-9999." Which of the following is NOT a true statement about the ad? A) This is an example of a "blind ad." B) If a licensee is advertising this property, the employing broker's name must be in the ad. C) Real estate licensees may not post blind ads in Arizona. D) The ad must include the salesperson's name.

D) The ad must include the salesperson's name.

Question #12 of 15 Question ID: 1150248 Farmer John is selling his farm in Pinal County to a land developer. What will happen to his water rights? A) The land would no longer be classified agricultural. B) The land can no longer be irrigated. C) The developer would be able to use the full irrigation rights. D) The developer could use water rights for "assured water."

D) The developer could use water rights for "assured water."

Question #6 of 10 Question ID: 1150284 The NW1/4 of the NE1/4 of the NE1/4 of the NE1/4 of Section 16 and the SW1/4 of the SE1/4 of the SE1/4 of the SE1/4 of Section 9 are Jordan's latest purchases. He paid $2,300 per acre for the land. Are the parcels contiguous and how much did Jordan pay totally for his two parcels? A) No. $23,000 B) Yes. $23,000 C) No. $11,500 D) Yes. $11,500

D) Yes. $11,500

Question #4 of 11 Question ID: 1150055 An associate broker who manages a branch office may do all of these things EXCEPT A) hire and fire associates. B) supervise and manage licensees at the branch office. C) review and initial contracts. D) assume the broker's responsibility.

D) assume the broker's responsibility.

Question #7 of 7 Question ID: 1150081 Jan acts as a buyer broker for Charlie and Kate without a buyer broker agreement. They find a house and write an offer at which time one of the forms states that Jan represents Charlie and Kate as a buyer agent. This type of agency is called A) designated agency. B) accidental agency. C) ostensible agency. D) implied agency.

D) implied agency.

Question #10 of 10 Question ID: 1150111 A condominium association can foreclose a member's property when the owner has been delinquent for A) two years or in the amount of $1,200. B) two years or in the amount of $1,500. C) one year or in the amount of $1,000. D) one year or in the amount of $1,200.

D) one year or in the amount of $1,200.

Question #9 of 10 Question ID: 1150126 Helen, Jane, and Sally decided to buy a condo together. They bought the property together and had equal shares. Sally passed away and her niece became a _________________________ with Helen and Jane. A) joint tenant B) beneficiary C) remainderman D) tenant in common

D) tenant in common

Question #11 of 13 Question ID: 1150162 "Time is of the essence" in a purchase contract means that A) the transaction is following an accelerated timeline. B) a contingency must be completed according to the terms and conditions of the agreement. C) if a deadline is missed, the agreement is automatically canceled. D) the principals must adhere to timelines in the contract.

D) the principals must adhere to timelines in the contract.

Letter of Delegation: This document identifies a licensee to act on behalf of the designated broker if he is absent at least 24 hours, but not more than 30 days, the designated broker to delegate a licensee to act for her. The Letter of Delegation must be kept

in the employing broker's office files for one year and attached with any hire, sever, or renewal signed by the designated broker's designee. If the delegated broker is a salesperson, that designee may do all broker duties, except hire or fire, generally more broad than the duties of a branch manager, where the salesperson's duties are much more limited.

A licensee might also choose to sever from the current employing broker without associating to a new broker, in which case the license will become

inactive.

An agreement for sale (a.k.a: contract for deed, land contract, installment contract)

is a purchase agreement which includes terms offered by a seller to whom a buyer makes payments toward the purchase price while in possession of the property. It is an executory contract until all payments have been made and other obligations met by the parties, at which time the deed is conveyed by the vendor to the vendee. Remember, while executory, during the purchase agreement, a buyer has equitable title and the seller has legal title. In the same way other agreements are executed, so is the agreement for sale.

Arsenic

is a solid substance (metalloid) naturally existing in the earth's crust and in crushed rock. Exposure is by air, water, and food sources. Arizona has elevated levels of arsenic in groundwater across the state, especially in the Colorado Plateau, Big Chino, and Verde Valley. They have the highest levels of arsenic in their groundwater.

1031 Exchange:

is swapping one like property for another. You must identify the new property within 45 days of the sale of your exchange property and then you have 180 days to close it. The entire transaction will be handled by an intermediary and if you receive any cash, called "boot", you will have to pay taxes on it.

Land Subsidence background

is the downward movement or sinking of the earth's surface caused by removal of underlying support (e.g., pumping out groundwater). It is caused by reduction in pressure caused by too much water being withdrawn from an aquifer and causing a collapse. Fissure is a crack at or near the earth's surface that is caused by subsidence. Sinkhole is a cavity in the ground, especially in limestone bedrock, caused by water erosion and providing a route for surface water to disappear underground. According to the University of Arizona's Geological Survey, "ground subsidence and resulting earth fissures impact more than 3,000 square miles in Arizona, including expanding areas of Phoenix and Tucson."

If a licensee chooses to work for another employing broker, it is the licensee's responsibility to

make an electronic request through AZRE.gov to be hired to a new broker. The new employing broker will be notified and can accept or reject the licensee. When the new employing broker accepts the licensee, the licensee's license moves from the original employing broker to the new employing broker.

Case law is important in the delivery of a licensee's duties to customers and clients. For instance, the fiduciary duty of disclosure requires agents to

make proper disclosures, and precedent-setting cases further define or identify issues that require disclosure. Future cases will continue to shape the actions of real estate licensees in providing services to their clients.

The Recovery Fund Under ARS 32-2186 the Real Estate Commissioner is required to

set up a fund for the benefit of any person aggrieved by any act, representation, transaction or conduct of a licensed real estate broker or salesperson. The Real Estate Recovery Fund (recovery fund) is supported by fees assessed at the time of license application and license renewal. Each June 30, the recovery fund must have a balance of at least $600,000. Should the balance be less than $600,000, a broker shall pay an additional fee of $20 at the time of license renewal and a salesperson shall pay an additional fee of $10 at the time of license renewal.

a couple can take title as community property with each spouse devising their

share of the property, so that upon their death, the beneficiary will take title as a tenant in common with the surviving spouse.

Dual agency can arise unexpectedly and be accidentally created. For instance, this might happen when a sales associate with a brokerage takes a call on a company listing and

shows the property to the caller. Interest by the potential buyer may escalate into dual agency. An agreement that outlines the duties and responsibilities of the parties should be signed as soon as the principal chooses to make an offer on the brokerage's listing. Arizona regulations require the consent of both the seller and the buyer before the parties enter into a dual agency agreement.

The landlord, under ARS 33-1377, may institute a

special detainer action after issuing a 10-day notice of any recurrence. A summons is served to the tenant, who must appear in court to answer the complaint, the hearing to be held no later than the third day following the filing of the complaint. If there is a preponderance of evidence, the court will issue restitution to the landlord to be effective not less than 12 hours, nor more than 24 hours later. This is an example of a landlord being able to expel a tenant legally in less than three weeks.

The Uniform Commercial Code ("UCC") establishes a

standard for recording liens across the country. The Secretary of State processes liens which protect financial interests on, for example, consumer goods or commercial equipment. Each document is available for viewing on the Arizona Secretary of State's website as a public record. That filing number, the debtor name or secured party name can be used to search the website for detailed information regarding the lien filing.

Article 17 of the Arizona Constitution

states that "the common law doctrine of riparian water rights shall not obtain or be of any force or effect in the state." It continues to say, "All existing rights to the use of any of the waters in the state for all useful or beneficial purposes are hereby recognized and confirmed."

Arizona Department of Environmental Quality (ADEQ)

was established in 1987 for the purpose of administering all of the state's environmental protection programs. It also established the Water Quality Assurance Revolving Fund (WQARF), Arizona's water cleanup of contaminated areas. ADEQ assists with statutes and rules to enforce EPA's Clean Water Act, Safe Drinking Water Act, National Pollutant Discharge Elimination System program, the Resource Conservation and Recovery Act program, and the Clean Air Act.

A lease agreement is executed

when the lease is signed by all parties, then finally when the tenant's term has ended and the parties have fulfilled their obligations. It is executory after it is signed and during the term of the lease, because the tenant is in possession of the landlord's property and is fulfilling the terms of the lease.

PLLC member(s) may only

work in the field of licensure and hire nonlicensed individuals.

If an employing broker has more than one of any of these (licensed salesperson, associate broker, unlicensed assistant, or office), then the employing broker is required to develop and maintain

written office policies. For example, if an employing broker has a designated broker, two licensed salespeople, and one office, but no associate brokers or unlicensed assistants, the employing broker is required to develop and maintain written office policies.

"As Is" Agreements

If the contract is an "as is" agreement, the buyer should be additionally diligent during the inspection period to not only inspect the property, but to probe the seller regarding any latent material defects the seller might be aware of. The term "as is," is a red flag for a buyer. Even in an "as is" contract in Arizona, a seller is required to disclose all latent material defects or anything that might affect the consideration to be paid by the buyer.

If the landlord abuses access, ARS 33-1376 states:

If the landlord makes an unlawful entry or a lawful entry in an unreasonable manner or makes repeated demands for entry otherwise lawful but which have the effect of unreasonably harassing the tenant, the tenant may obtain injunctive relief to prevent the recurrence of the conduct or terminate the rental agreement. In either case, the tenant may recover actual damages not less than an amount equal to one month's rent.

Gain on Principal Residence:

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases). Loss: You cannot deduct a loss from the sale of your main home. To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least two years Lived in the home as your main home for at least two years

The LPV is usually less than the FCV, and it can never be higher. Example

If your home's LPV is valued at $200,000, you will be charged property tax based on the assessed value of $20,000. For this example, we will use the rate of 10%, which is most common. The average tax rate on homes in Arizona before exemptions and rebates is between $12 and $13 per $100 of assessed value. A property with an LPV is established at $200,000, with an assessed value of $20,000, then the taxes are exactly $13 per $100 of assessed value or $2,600 per year in property tax. Here's the math: $200,000 (limited property value) × 0.1 [or 10%] = $20,000 (assessed value) $20,000 (assessed value) × 0.13 [tax rate of 13% or $13 per $100] = $2,600 $200,000 ×.013 [or 1.3%] = $2,600 Taxes are set by the developer by stating their value to the county assessor. Developers generally state higher values than resale homes, believing in the higher value of a new home.

Material, unrepairable breaches include the following:

Illegal discharge of a firearm, homicide under ARS 13-1102 thru 1105 Prostitution under ARS 13-3211 Criminal street gang under ARS 13-105 Drug use, manufacturing, selling or storing under ARS 13-3451 Threatening or intimidating under ARS 13-1202 Assault under ARS 13-1203 Nuisance issues under ARS 12-991 Act jeopardizing health or safety of landlord, landlord's agent, another tenant or property damage under ARS 33-1377

Measurements and Legal Descriptions (cont.) Arizona State Trust Land

Many properties in Arizona border state or federal lands. Buyers should confirm a listing that states "borders public lands. The intended property purchase tax parcel number can be used by the buyer to go to the county website and determine what land is contiguous to the intended purchase. It's especially important to ascertain in the event of access issues. It's also important to know that state trust lands are not public lands, and permits are required for access and use where recreation is permitted. There is also no trespassing in other areas of the nearly 9.2 million acres of the trust lands.

In Arizona, any exclusive representation or enforceable commission agreement must

be in writing and signed by the agent and the client.

Should the lender choose to do a deed in lieu, the lender

becomes liable for any and all liens against the property. To ensure full disclosure, the lender will probably require a Certificate of Estoppel from the borrower stating just what is owed against the property.

In Arizona, commissions are paid employing

broker to employing broker.

An affidavit of affixture is a document that is used to

change the status of a manufactured home from personal property to real property. There will be requirements for "tie-downs" in the event the property requires a loan.

A person may not present himself to the public as a real estate broker or salesperson without a license. Doing so may be a

class 6 felony.

At close of escrow, the buyer's agent will be paid according to the terms and conditions of his buyer-broker agreement. If absent a buyer-broker agreement, or one that addresses that the commission will be the

commission offered by the listing broker, the escrow company will request commission instructions from the brokers. The instructions by the listing broker will indicate the total commission and the split amount to each broker.

Under Arizona law, as stated in numerous court decisions, "an agent is one who acts for another." While some states have laws and rules regarding agency that fully define what it means to act for another, Arizona is a common law state, so it takes its direction from

court decisions for many issues and not specific statutory decrees. This doesn't mean that there are no Arizona laws regarding agency; rather, it means that existing laws and precedent-setting cases work together to require certain conduct of agents in the representation of clients.

Broker Duties, Supervision, and Control (cont.) Trust Account Recordkeeping and Accounting The files are to be kept for at least

five years. Rejected offers are to be kept one year unless the rejected offer eventually becomes a contract. At that time, it must be included in the sales file, to be kept for five years. Employee records must be kept for at least five years. The files are to be kept in the office of the designated broker, unless the Department is notified, in writing, the files are located elsewhere.

The Rules of Advertising (cont.) R4-28-503. Promotional Activities A licensee cannot advertise a premium as

free or low cost to induce a sale or lease, such as a "prize" or "award." If there is an offer of a premium, all terms must be disclosed prior to the offer. No advertising lotteries, games of chance, or drawings are permitted. However, subdividers, developers of timeshares, and membership campgrounds may conduct these by submitting plans first to the Department.

To participate in a real estate auction, attendees were required to have $10,000. A client wanted his agent to attend the auction for him and wrote the agent a check for $10,000, which the agent deposited into her personal checking account so she could write the check at the auction. Handling the funds in this way is

illegal. To be legal, the funds would have to be deposited into the broker's trust account and the check would have to be written from the trust account. Even if the agent uses the client's money as intended, it is still illegal to route the money through a personal account rather than the broker's trust account.

Question #8 of 11 Question ID: 1250762 How many questions are there for salespersons, how many pretest questions, and how long does the licensee have for the exam? A) 180/15/300 B) 200/20/360 C) 100/15/250 D) 150/10/230

A) 180/15/300

Employing Broker

An employing broker is either a brokerage firm or a sole proprietor as a legal entity separately licensed.

Employing Broker Sole proprietor Can go by another name:

By registering a d/b/a (doing business as)

Employing Broker Non-natural person (brokerage firm) can be set up as:

Corporation LLC Partnership

Question #1 of 5 Question ID: 1150030 A normal and routine audit is triggered by a complaint. True False

False

Township Lines

Lines of demarcation that run parallel to the baseline, east to west, and serve as boundaries between townships.

Question #4 of 5 Question ID: 1250764 Designated brokers are responsible for conducting declarative audits, as well as normal and routine audits. True False

False

Question #5 of 5 Question ID: 1168584 The Arizona Department of Real Estate keeps an employing broker's audit for at least seven years. True False

False

uestion #1 of 3 Question ID: 1250759 State regulations give the Commissioner the ability upon the Commissioner's own motion or in the event of a signed and verified complaint, the right to examine the employing broker's personal checking account. True False

False

Question #1 of 3 Question ID: 1150135 There is a rescission period of seven calendar days for purchasers of resale, single-family, improved properties. True False

False The statement is false. There is no rescission period for purchasers of resale, single-family, improved properties.

Requirements of a Lease Agreement (cont.) How Commercial Leases Differ From Residential Leases Here are the main distinctions between them:

Fewer consumer protection laws. Commercial leases are not subject to most consumer protection laws, such as the Arizona Residential Landlord and Tenant Act No standard forms. Many commercial leases are not based on a standard form or agreement; most commercial leases are drawn by an attorney. They must be carefully read. Long-term and binding. Tenants cannot easily break or change a commercial lease. It is a legally binding contract, and many landlords who lease to an entity want a personal guarantee from the person signing for the entity should the company go bankrupt or break the lease. Negotiability and flexibility. Commercial leases are generally subject to much more negotiation between the business owners and the landlord. The nature of the negotiations will involve items such as tenant improvements, design of the space, and possible options on future expansion. Most leases are for three to five years. Commercial buildings, landlords and tenants, must be compliant with ADA.

Most landlords run a background check before allowing the tenant to move in and any material falsification is usually found prior to occupancy, but should the information in the background check indicate a falsification after move-in, the landlord has the right to remove the tenant. To remove a tenant on these grounds, a landlord must issue a noncurable notice.

Five-day noncurable health or safety issue, such as a past criminal record, the landlord may issue a notice of termination. A five-day noncurable notice gives the tenant notice to be out of the property within five days of the notice, which also contains the reason why the tenant is being required to move. Ten-day material falsification notice. Noncurable. This notice is sent when there is no imminent safety or health issue, but the tenant has breached the lease, and in some cases, this is the second time the tenant has breached the same issue. (This is called an immediate writ of restitution.)

Arizona adopted tough water laws. The Code put everything water (except for water quality) under one agency, the ADWR, and it identified four main areas of the state where the population was the greatest and the water being drawn out of the aquifers was the greatest, naming them Active Management Areas (AMAs).

For decades, lawmakers had tried to rein in the indiscriminate use of groundwater pumping by farmers, cities, and copper mines, with no results, until then-Governor Bruce Babbitt convinced the secretary of the interior, Cecil Andrus, to withhold funds for the construction of the Central Arizona Project unless

Compared with statutes in many other states, Arizona's statutes relating to landlord-tenant requirements are regarded as reasonably equitable to both parties. A few notable differences are as follows:

For the landlord: A landlord can evict a tenant in less than a month if the landlord follows the statutes exactly. For the tenant: If a tenant abandons the property, the landlord must mitigate the lease by renting the property to another tenant as soon as possible.

The courts in Arizona have defined misrepresentation in numerous cases. Misrepresentation is important in the discussion of disclosure because the purpose of disclosure is to allow an individual to have enough information to make an informed decision. When items that require disclosure are misrepresented, that individual's ability to make an informed decision is obstructed. Arizona courts are prone to reward plaintiffs when it is apparent that there has been an attempt to deceive, which is usually determined to be

Fraud

Joseph City Douglas Harquahala Valley INAs are areas where groundwater depletion is not as severe as AMAs but requires regulation. By definition, an INA is a geographic area in Arizona that has been designated as having insufficient groundwater to provide a reasonably safe supply for the irrigation of the cultivated lands at the current rate of withdrawal. The INAs are agricultural areas No new irrigated land Nonexempt wells must measure and report annual water use

General Provisions Irrigation Non-Expansive Areas are as follows:

There is a process for use of the recovery fund by a member of the public, according to ARS 32-2188. Claimants must do the following:

Get a judgment from a court of competent jurisdiction Show they have tried to collect on the judgment If unable to collect from the licensee, file all documents including the judgment with the Department's recovery fund within two years of the time they received the judgment

Range Lines

Lines of demarcation that run parallel to the meridian, north to south, and serve as boundaries between townships.

Question #4 of 4 Question ID: 1150183 A tenant is obligated to allow the landlord access to the property, and under state statute cannot "unreasonably withhold consent" to the landlord to enter the dwelling. True False

True

Question #4 of 4 Question ID: 1150187 A tenant can be released from a lease if the tenant has suffered domestic abuse. True False

True

Question #4 of 4 Question ID: 1168586 A licensee is entitled to all earned commissions while with an employing broker, even if payment takes place after the licensee's departure. True False

True

Question #2 of 2 Question ID: 1150265 Sixteen townships make up a quadrangle. True False

True The answer is true. A quadrangle is a 24-mile-square area made up of 16 townships.

Question #1 of 2 Question ID: 1150178 Because hoarding is considered a disability, property owners must comply with the Fair Housing Act and provide reasonable accommodations. True False

True The answer is true. It's against the law to discriminate against disabled individuals, and hoarding is a recognized and diagnosable mental disorder in the DSM-V, the book used by the American Psychiatric Association (APA) to classify mental disorders. Because hoarding is considered a disability, property owners must comply with the Fair Housing Act and provide reasonable accommodations.

Question #3 of 3 Question ID: 1250772 Someone who purchases an unimproved lot without seeing it first has a rescission period of six months. True False

True The statement is true. R4-28-804 gives the purchaser of an unseen lot up to six months to rescind the agreement.

ARS 33-1270(B)

Under ARS _______________, the Commissioner of the Department of Real Estate "shall require compliance with section 33-1215 and section 33-1219 in connection with the administration of the subdivision laws of this state under Title 32, Chapter 20, Article 4. The commissioner shall not be required to administer or enforce any other provisions of this chapter."

right to left

We read prose from left to right as a habit, but when reading a land description, in order to determine the property location, we read from

Gross lease

With a gross lease for commercial space, the renter pays the landlord a fixed monthly rent. It is then up to the landlord to pay the expenses of operating the building.

Any job over $1,000 or one that requires a permit will require

a properly licensed contractor to do the work.

So, in Arizona, mechanics' liens enjoy priority over all other encumbrances to the property that attach

after the time labor commenced on the project.

A real estate purchase agreement is executed when

all material terms are negotiated and agreed to, signed, and delivered to all contracted parties.

executed.

While in escrow, the agreement is said to be in an executory state. When the contract is recorded or the deed is conveyed to the grantee, or the deed is recorded as per the agreement, the purchase agreement is

Estate for years:

"A species of estate less than freehold, where a man has an interest in lands and tenements, and a possession thereof, by virtue of such interest, for some fixed and determinate period of time; as in the case where lands are let for the term of a certain number of years, agreed upon between the lessor and the lessee, and the lessee enters thereon." -The Law Dictionary

ARS 33-233 says that

"an estate for life may be created in an estate for a term of years and a remainder may be limited thereon."

The limits of the fund are as follows:

$30,000 for each transaction $90,000 for each licensee

Land Patent

A land patent is a supreme title to land that was originally acquired within the United States by a treaty. It grants the rights to the described land under the treaty to the individual person named on the patent and to their heirs and their assignees forever. The party named on the patent may transfer by inheritance, grant, or assign the patented lands to someone else, and this heir or assignee is now named on the patent by that assignment. The individual may contract the property appurtenant to the land, perhaps for a loan, as collateral in the promise to repay the loan. A bank can, of course, foreclose on its mortgage note, but perfected title means that you absolutely own the land. A bank cannot acquire superior title through foreclosure, so you remain the one holding superior title.

Valid Contract

A lawful agreement has the following components: offer and acceptance, consideration, consent, competency and capacity, and legal purpose.

Metes And Bounds

A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning.

Writ Of Restitution

A legal document that authorizes scheduled eviction of a tenant.

Implied Contract

A legally binding agreement created by the actions and conduct of two parties leaving the liability open and subject to dispute.

Purchase money mortgage

A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.

Estates, Ownership, Acquisition, and Transfer (cont.) Persons ineligible

A person who is required to be licensed as a contractor but who does not hold a valid license (ARS 33-981(C)). A person who furnishes professional services but who does not hold a valid certificate of registration (ARS 33-981(E)) A person who is required to give preliminary twenty day notice... [and show] proof of service [but has failed to do so] (ARS 33-981(D)) A person who does not have a written contract directly with the owner-occupant of a single or two-family dwelling upon which improvements have been made (ARS 33-1002(B)) Anyone who furnishes labor or materials to a job where the original contractor has posted a payment bond, the payment bond must be in an amount equal to the full contract amount (ARS 33-1003(B), 34-222(A)(2))

Judicial Foreclosure

A process that must take place in the courts. Mortgages must be judicially foreclosed in Arizona under Title 33. Chapter 6. Article 1 Mortgages and Article 2 Foreclosure. Deeds of trust may also be judicially foreclosed.

Bilateral Contract

A promise exchanged for a promise makes it "bilateral." Often confused with two or more parties, it is two or more promises.

Unilateral Contract

A promise exchanged for performance—the promissor is obligated "IF" the other party performs as agreed.

Revocable Trust

A revocable trust is a trust in which provisions can be altered or canceled by the grantor. Because it involves property, a revocable trust will transfer property to the beneficiaries of the trust only after the death of the grantor. If the property is in a revocable trust, the trust will note whose signature is required to convey the property. If there is a trustee designated, that individual can serve both during the lifetime and after death of the parties.

sections

A township is a 6-mile-square area composed of 36 ___________

______________requires each employing broker to have a place of business. Should the broker change locations, the broker will notify the Department and a license will be issued to indicate the address change.

ARS 32-2126

______________requires that only the licenses of the employing broker and the designated broker be prominently displayed.

ARS 32-2128

is the statute that specifically describes unlicensed activities:

ARS 32-2165

boundaries

All properties must have enclosed ___________

If no action is maintained for a deficiency judgment within the time period prescribed in subsections A and B of this section, the proceeds of the sale, regardless of amount, shall be deemed to be in full satisfaction of the obligation and no right to recover a deficiency in any action shall exist.

Any lien, junior or inferior, to the deed of trust will be wiped out.

Formulas and Facts

Area of a square or rectangle: L × W Area of a triangle: ½ (B × H) or (B × H) ÷ 2 Perimeter: L + L + L + L 1 acre: 43,560 square feet 1 mile: 5,280 feet 1 section: 640 acres

Product

Devise Deed Legacy Lease Mortgage Offer Option Sublease Trust

EIFS

EIFS, or Exterior Insulation and Finishing System, might be termed "pseudo-stucco." It is high maintenance and its use is not allowed in a number of states. The system has a tendency to crack much more often than stucco. If weep screeds are not installed and water gets between the exterior and interior surface, water will collect and mold will form.

Employing Broker Non-natural person (brokerage firm) Requires:

Entity license Designated broker

Despite popular belief, dying does not extinguish the obligation to perform a real estate contract if the deceased is the seller. It may be possible for the buyer to exert specific performance against the seller's estate. If the buyer dies, the seller may not be able to enforce the contract, dependent upon how far the contract has progressed.

Example The buyer is financing the purchase with a loan. Because a loan requires a signature from the buyer, but the buyer is deceased, the buyer cannot sign the loan document. If the buyer has already signed the loan document at the time of his death, the lender would not fund the loan for a deceased buyer.

Question #1 of 2 Question ID: 1150074 A real estate employment agreement is required for a licensee to represent a party in a transaction. True False

False

The mechanic's lien is recapped as follows:

File preliminary 20-day notice File notice of claim of lien with recorder's office within 120 days after completion, but before the filing of the notice of completion If notice of completion has been filed, 60 days to file the notice of claim of lien Must foreclose on property within six months A mechanic's lien is a specific lien. The lien is against the property. A general lien is one that can be collected against personal or real property.

Real estate can be classified in two categories:

Freehold Leasehold

Chapter 7 bankruptcy

In a chapter 7 bankruptcy, the debtor wipes out all debts and gets a "fresh start." Chapter 7 bankruptcy is a liquidation where the trustee collects all assets and sells any assets that are not exempt. Arizona exemptions are as follows: Back child support, alimony obligations, family support monies DUI caused injuries or death debts Student loans Traffic tickets, fines, penalties, and criminal restitution Income tax debts within the last three years and other tax debts Chapter of the Bankruptcy Code providing for liquidation of the debtor's assets in order to repay the creditors; certain assets or aggregate value of assets of the debtor may be exempt based on state law.

Misrepresentation might be considered innocent, negligent, or fraudulent:

Innocent misrepresentation. One party makes a representation in good faith and believes it to be true by the one making it, but in fact it is false. Negligent misrepresentation. Material information about the property, known to the principal or the agent, which is left unsaid. It is a case of omission: "One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. " Fraudulent misrepresentation. Misrepresentation with intent to deceive (Case law: Refer to Lerner v. DMB Realty): "When one is asked a question that fairly calls for disclosure of a material fact, he or she commits fraud by concealing the truth or otherwise answering in a manner deliberately calculated to mislead."

Fraud

Intentionally misrepresenting or omitting material facts upon which a party relies and to deceive that party into taking action based, in part, upon that deception.

Employing Broker Sole proprietor Example

John Doe is an employing broker operating as a sole proprietor doing business as (d/b/a) Arizona Blue Sky Realty. The entity license is in the name of Arizona Blue Sky Realty, and John is the designated broker. There are three sales associates working for him. John Doe is an employing broker operating as a sole proprietor. The entity license is in the name of John Doe, and John is the designated broker.

Case Law

Judicial interpretations of common law principles and doctrines, as well as interpretations of constitutional law, statutory law, and administrative law.

The Federal Manufactured Home Construction and Safety Standards (commonly known as the HUD Code) went into effect

June 15, 1976. Manufactured homes may be single- or multisection and are transported to the site and installed and are homes built entirely in the factory under a federal building code administered by the U.S. Department of Housing and Urban Development (HUD).

Arizona has three financing instruments, each with its own unique statutory foreclosure processes. The mortgage is seldom used by lenders in Arizona due to the judicial foreclosure requirement, which sometimes can take years to accomplish. The parties to the loan are the mortgagor (borrower) and the mortgagee (lender). The steps involved in the mortgage foreclosure process are as follows:

Late payments or other default triggers notice to borrower/mortgagor Filing of legal action of foreclosure against borrower/mortgagor Filing a lis pendens at the recorder's office, notifying title is affected Acceleration of the debt, causing the full balance due at once Court action, if judicial foreclosure but if not, "power of sale" clause enables auction/sheriff's sale Auction/sheriff's sale Sheriff's certificate. Certificate is awarded to auction winner, but no action can be taken until the statutory redemption period is complete. Six-month statutory redemption period during which borrower/mortgagor can repay full auction price to regain property Sheriff's deed transfers property if not redeemed by borrower/mortgagor

Lead

Lead was used as a pigment and drying agent in alkyd oil-based paint in about 75% of housing built before 1978. An elevated level of lead in the body can cause serious damage to the brain, kidneys, nervous system, and red blood cells. Children younger than six are most vulnerable. Lead enters the body by inhalation, eating, or drinking water containing lead. Lead is a heavy metal, as is arsenic, and is found in the soil, air, and water in Arizona. Most cities moved away from lead water-supply piping by the 1920s, although lead pipes continued to be used into the 1980s due to lax building codes, and lead was used in plumbing solder for drinking water until it was banned in 1986.

NOTES Note: Investors use many formulas to determine a good investment, and one of the most important is cash-on-cash or equity dividend rate: cash-on-cash return = annual before-tax cash flow / total cash invested. Leveraging the property with financing will give the investor a higher COCR. Many investors look for a COCR of 8% to 12%.

NOTES

NOTES The Arizona REALTORS® has a form that meets the statutory requirements. A landlord or property manager need only to use a form that explains all necessary requirements. A sample Notice of Abandonment is shown in Notice of Abandonment.

NOTES

There are separate requirements for transfer of a "shared well." Under the Groundwater Code, wells are classified as the following:

Nonexempt wells pump over 35 gallons per minute (GPM). Exempt wells pump 35 gallons per minute (GPM) or less.

Broker Review

Once a contract is executed and goes into escrow (the executory period), brokers have review duties. According to ARS 32-2151.01(G), the designated broker or a delegated associate broker has the responsibility to review the purchase documents within 10 business days of the execution of the document and initial the same page that contains the signatures of the parties. ARS 32-2151.01(C) requires the broker to ensure the purchase agreement states the type of earnest deposit: cash, check, wired funds, promissory note, or other thing of value and who is holding the earnest deposit.

Section

One-square-mile land unit of 36 that make up a township.

The owner-occupants exemption from mechanic's lien is as follows:

Owner-occupants are exempt from certain liens. This exemption is based upon an owner's status as owner-occupant. In general, if an owner meets this definition before construction, alteration, repair, or improvement, he will be exempt from all mechanics' or materialmen's liens, except those of a claimant in direct written contract with the owner-occupant. See ARS 33-1002(B).

The professional limited liability company may be written out in full, or abbreviated (upper or lower case) as

PC, PLC, PLLC or P.C., P.L.C., P.L.L.C.

Risk of Loss

Prior to the recording of the deed, any loss or property liability is that of the seller. After the recordation of the deed, all risk is that of the new owner.

Short sale: The property is placed on the market for sale but the anticipated sale price is less than the loan amount. The lender is notified of the contract, which is subject to the lender's taking less than the full loan amount. The lender is "short" of full loan recovery. There may or may not be recourse for the lender, depending on whether or not the seller's property falls under one of Arizona's two anti-deficiency statutes Loan modification: A loan modification is a permanent restructuring of the mortgage or promissory note of the deed of trust where one or more of the terms are changed to provide a more affordable payment. The borrower's payment might be changed in one the following ways:

Reduce the interest rate Convert from a variable interest rate to a fixed interest rate, or Extend of the length of the term of the loan Generally, to be eligible for a loan modification, you must show that you can't make your current mortgage payment due to a financial hardship, complete a trial period to demonstrate you can afford the new monthly amount, and provide all required documentation to the lender for evaluation. Forbearance agreement: Similar to a loan modification, only not permanent but for a negotiated period of time.

Taxes On Investment Properties:

Rental income is taxable as ordinary income. IRS regulations require that you depreciate your rental property over 27.5 years, or 3.636 percent per year so when you sell you will be liable for depreciation recapture tax.

The Arizona appeals court upheld that an "as is" clause in an agreement has two requirements in order for the seller to have standing in court:

Seller discloses the defects in the property Allows the buyer a period of due diligence After the inspections, the buyers may request a price reduction or that the seller fix all or some of the health and safety issues noted on the inspection report, or they may cancel the transaction.

Employing Broker can be either:

Sole proprietor Non-natural person (brokerage firm)

Study info In Arizona, it is the employing broker who is the "agent" in dual agency. The employing broker owns the employment agreements even though the sales associates of the company generally list properties for sellers and find homes for buyers. The licensees take the listings and buyer broker agreements in the name of the employing broker. An employing broker who represents both a buyer and a seller in the same transaction is a dual agent and must disclose this fact in writing according to office policy. Proper disclosure prevents potential breaches of fiduciary or the appearance of breach of fiduciary. For non-REALTORS®, there is no standard form for disclosure of dual agency. Brokers will likely have their own form for this

Study info

Arizona Department of Water Resources.

The 1980 Groundwater Code regulates groundwater in Arizona and is administrated by the

Commissions (cont.) Commission Court Case Focus Point Properties, LLC/Kantor v. Johnson/Oak Acres Trust, No 1CA-CV 12-0766 (Ariz. Ct. App. June 6, 2014)

The Court's Decision: The issue for the Court was whether a broker has standing under A.R.S.§32-2152(A) to maintain a lawsuit for a real estate commission when there was evidence that the broker violated Arizona law by not timely disclosing to the ADRE that he violated a prior consent order. The Court held that the violation did not preclude the broker's claim because the determination whether to suspend or revoke a real estate license is to be left to the Real Estate Commissioner. The court's responsibility under A.R.S. §32-2152(A) is to determine whether the salesperson had a current license at the time the services were performed. The Court of Appeals stated that "[a]lthough § 32-2152(A) required the determination of whether the salesperson was a 'qualified' licensed salesperson at the time the claim for compensation arose, the more specific provision (§ 32-2153) detailing when and by whom a license should be suspended or revoked is controlling as to that issue."

Government Survey System

The Public Land Survey System (PLSS) is a way of subdividing and describing land in the United States. All lands in the public domain are subject to subdivision by this rectangular system of surveys, which is regulated by the U.S. Department of the Interior, Bureau of Land Management (BLM). It is also commonly known as the Rectangular Survey System or Government Survey System.

Arizona State Land Trust history

The Territory of Arizona was established on February 24, 1863. This Act of Congress granted sections 16 and 36 of each township for the benefit of the Common Schools. The State Enabling Act, passed on June 20, 1910, assigned sections 2 and 32 of each township to be held in trust for the common schools. The needs of other public institutions were considered by Congress, and through the Enabling Act, more than two million additional acres were allocated for their use. In 2017, Arizona schools realized $225 million in funding from the land trust. Revenues from the trust land is not only for the benefit of the public schools, but for 13 other public institutions. The Land Department is authorized to pay commissions to Arizona licensed real estate brokers if the broker is bringing a sale or lease to the State Land Trust.

Irrigation ditches 3

The Verde River is one of the very few remaining perennial rivers in Arizona. It runs relatively freely from its source near Paulden to Horseshoe Reservoir for 137 river miles. Still in 2006, American Rivers listed the Verde River, as one of the 10 most endangered rivers in America because of extensive groundwater pumping from development. Additionally, the river is the lifeblood of both the agricultural and rural/suburban lifestyle in the Verde Valley; consequently, flows are reduced - especially in summer, due to withdrawals by 42 ditch companies on the river and tributaries. The Verde supplies approximately 40 percent of the surface water that Salt River Project delivers annually to Phoenix-area residents and cities and towns for irrigation and municipal uses. There are about 30 irrigation associations diverting surface water in the Verde Valley sub-basin. We'll use the Verde Ditch Association as an example of the complexities of the rights.

Familial status

The landlord must be aware of fair housing rules such as ARS 33-1317(A), which states the following: A person who knowingly refuses to rent to any other person a place to be used for a dwelling for the reason that the other person has a child or children, or who advertises in connection with the rental a restriction against children, either by the display of a sign, placard or written or printed notice, or by publication thereof in a newspaper of general circulation, is guilty of a petty offense.

As you would expect, the landlord must give the tenant notice. Under ARS 33-1343,

The landlord shall not abuse the right to access or use it to harass the tenant. Except in case of emergency or if it is impracticable to do so, the landlord shall give the tenant at least two days' notice of the landlord's intent to enter and enter only at reasonable times.

Percentage lease

The landlord will receive the base rent and any percentage of any revenue earned by the tenant during the lease.

R4-28-502 and Substantive Policy Statement 2007.18 rev. explain the requirements for advertising by a licensee. A later announcement by the Arizona REALTORS® and the Department covers a number of specific issues:

The name of the employing broker must be displayed in a clear and prominent manner. The words "owner/agent" must be displayed in advertisements where the licensee has an ownership interest. The advertisement must contain accurate statements. If advertising another employing broker's listing, both employing broker names must be clearly and prominently displayed. The designated broker must supervise all advertising. If using the term "acre," it must be 43,560 square feet, and not a "commercial acre," which is 82.6% of an acre. Advertising must not unlawfully discriminate against any protected class under the federal Fair Housing Act or other laws. For example "a quiet neighborhood, perfect for seniors" is considered discriminatory toward children, under familial status protection. All websites, social media, MLS, and any electronic media platform associated with a licensee used in the real business falls under these regulations. A licensee shall not place a sign on a property without the written consent of the owner.

Property Management (cont.) Lease Agreements There are certain requirements for all lease agreements under the Arizona Residential Landlord and Tenant Act, as well as disclosure by the owner or the property manager:

The name of the property manager, if any Who holds the security deposit Refundable and nonrefundable fees Move-in existing damages to rental property Right to be at the move-out inspection If other than a single-family home, bedbug educational information If applicable, lead-based paint documentation A landlord's duty to disclose material latent defects to the tenant is more ongoing than disclosure to a buyer in a sales transaction. Example Just because the landlord discloses that the furnace is about 20 years old and sometimes does not ignite right away, it does not relieve him of liability if there is a dangerous gas leak or from keeping the property inhabitable.

Notices (cont.) Access Access is another area where both landlord and tenants fail to be cooperative at times. ARS 33-1343 defines the tenant obligation to allow the landlord access to the property:

The tenant shall not unreasonably withhold consent to the landlord to enter into the dwelling unit in order to inspect the premises, make necessary or agreed repairs, decorations, alterations or improvements, supply necessary or agreed services or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workmen or contractors.

Measurement Systems

Understanding metes and bounds is essential in determining the location of a property in the State of Arizona. But first, we must address the difference between the Rectangular Survey System and the Public Land Survey System (PLSS). There is no difference in the systems, only in the labels. The Rectangular Survey System of the United States was established by congressional legislation in 1785, in order to provide an orderly mechanism for opening the Northwest Territory for settlement. The ordinance directed the geographer of the United States, Thomas Hutchins, to survey an initial east-west base line by using the rectangular system of surveying. The survey system is also called the Government Survey System.

are a promise exchanged for performance, thus only the promissor is bound, if the other party "chooses" to perform.

Unilateral contracts

Irrigation ditches 2

We will concentrate on the Verde River watershed. The sub-basins are about the groundwater, but the irrigation ditches are about surface waters. The Verde River watershed ranges from Humphrey's Peak in the Flagstaff area to the Bartlett Dam, where it converges with the Salt River in the Phoenix AMA. Due to the fact that the Verde River is a surface water issue and falls under the doctrine of prior appropriation, claims must be filed with the Arizona Superior Court adjudication master who is determining who has the rights to the use of the water. The Verde River Watershed is an important, life-sustaining watershed. Located in central Arizona, the 6,230-square-mile basin is one of the most beautiful and diversified watersheds in Southwestern United States. On its western edge, the watershed includes Seligman, Prescott, and portions of Scottsdale. On the eastern edge, it reaches the Flagstaff city boundaries and stretches south to Payson and beyond. With headwaters in northwest Yavapai County, the Verde River - the basin's master watercourse - provides a lush corridor from Paulden, just north of Chino Valley, to the Horseshoe Reservoir, just north of Phoenix. Along the way, it passes through the communities of Clarkdale, Cottonwood, and Camp Verde.

The limitation is for the purpose of limiting conflicts of interest that arise in a real estate transaction. A sales associate cannot

put one principal's interest above the other principal. In the normal representation of one principal, the sales associate is free to negotiate vigorously for her client. In a transaction where the employing broker is representing both buyer and seller, the sales associate must refrain from giving too much advice, but should assist in every way to be certain the principals receive as much information as possible to make their decisions. In all dual representations, the sales associate should recommend that the principal have trusted advisors available to assist in the decisions they make, given the information provided by the sales associate.

At the end of six months, the sheriff's certificate will be replaced with a sheriff's deed if the mortgagor has not

redeemed the property.

Curable

If the breach can be remedied by payment of money or by repair or otherwise, and the tenant cures the breach within the time frame specified in the breach notice, the lease will not terminate, according to ARS 33-1368.

Propane tanks

In years past, propane tanks were placed underground and many eventually leaked. In recent years, the tanks are placed on a cement cradle and kept aboveground.

A buyer broker agreement may call for a commission of Y%. The listing co-broker may only be X%. A buyer broker agreement will indicate how the buyer will pay any additional amount due the employing broker. It will be presented to escrow with instructions to charge the buyer any additional amount not covered by the

MLS offering.

ARS 32-2151.01(A) requires the employing broker to keep certain transaction documents for five years:

Sales contract Earnest deposit receipts, ascertaining proper handling and release to the proper principal Closing documents, including receipts, disbursals, and adjustments Employment agreements, if applicable

Real Estate licensees:

The term "real estate professional" is an IRS tax classification. You can always deduct all your rental losses from your non-rental income, no matter how big the losses or high the other income. Check with your tax advisor.

All records of the cemetery broker must be kept for at least five years; and, should the Department request review of the records, the broker must provide those records within

10 days of notification.

Arizona judgments are good for

10 years and renewable for another 10 years.

Another 10-day material falsification might be the situation of a tenant who leases a property unfurnished, and turns it into a vacation rental by leasing furnishings and advertising it on a vacation rental website. The landlord would send a

10-day material falsification notice to the tenant that at first would be curable. A second breach of the same nature would render the next notice noncurable.

Associations An Arizona HOA must meet this definition from ARS 33-1801 in order to be an association:

"Association" means a nonprofit corporation or unincorporated association of owners that is created pursuant to a declaration to own and operate portions of a planned community and that has the power under the declaration to assess association members to pay the costs and expenses incurred in the performance of the association's obligations under the declaration. Association does not include a nonprofit corporation or unincorporated association of owners that is created or incorporated before January 1, 1974 and that does not have authority to enforce covenants, conditions or restrictions related to the use, occupancy or appearance of the separately owned lots, parcels or units in a real estate development, unless the nonprofit corporation or unincorporated association of owners elects to be subject to this chapter.

emeteries Plots, mausoleums, niches, and burial spaces Under ARS 32-2101, a cemetery is defined as:

"Cemetery" or "cemetery property" means any one, or a combination of more than one, of the following in a place used, or intended to be used, and dedicated for cemetery purposes:

Requirements of a Lease Agreement Rental Agreements ARS 33-1314 outlines what must be in the rental agreement. A few specifics:

"In the absence of a rental agreement, the tenant shall pay as rent the fair rental value for the use and occupancy of the dwelling unit." "... periodic rent is payable at the beginning of any term of one month or less and otherwise in equal monthly installments at the beginning of each month..." "Unless the rental agreement fixes a definite term, the tenancy shall be week-to-week in case of a roomer who pays weekly rent, and in all other cases month-to-month." "If a municipality that levies a transaction privilege tax on residential rent changes the percentage of that tax, the landlord on 30 days' written notice to the tenant may adjust the amount of rent due...."

Manufactured homes vs. mobile homes Definition of a manufactured home under the Code of Federal Regulations, 24 CFR 3280 is as follows:

"Manufactured homes are built as dwelling units of at least 320 square feet (30 m2) in size with a permanent chassis to assure the initial and continued transportability of the home." [1] The requirement to have a wheeled chassis permanently attached differentiates "manufactured housing" from other types of prefabricated homes, such as modular homes.

The Arizona REALTORS® reminds us that these duties are owed whether the agency is express implied (by the actions of an agent):

"Most people are aware that a real estate broker or salesperson ("Broker") is an agent with fiduciary duties to the party that the Broker represents. This agency relationship is most often created by express agreement; however, an agency relationship can be legally implied by the parties' actions. Regardless of whether the agency relationship is express or implied, the agency relationship imposes on a Broker the fiduciary duties..." More information about agency dilemmas can be found at the Arizona REALTORS® site: https://www.aaronline.com/2011/04/04/agency-dilemmas-2/.

From Lerner vs DMB Realty (2012, o. 1 CA-CV 11-0339, Court of Appeals of Arizona) under the Second Restatement of Torts (1977):

"One party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated, (a) matters known to him that the other is entitled to know because of a fiduciary or other similar relation of trust and confidence between them; and (b) matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading; and * * * (e) facts basic to the transaction, if he knows that the other is about to enter into it under a mistake as to them, and that the other, because of the relationship between them, the customs of the trade or other objective circumstances, would reasonably expect a disclosure of those facts."

Property Management Arizona does not define property management in statute. "Property management firm" is defined in ARS 32-2171, along with its companion, "rental agreement":

"Property management firm" means any corporation, partnership or limited liability company licensed pursuant to section 32-2125, subsection A or a designated broker that by written agreement, manages rental property or properties for compensation. "Rental agreement" means a lease or leasing agreement. Throughout the years, different industry entities have attempted to define property management as a stand-alone phrase; but, because property management covers so many subsets of management, the Legislature and the industry choose to keep the definition broad, and the courts defer to the definition of property management firm.

ARS 33-1806(C):

"The association may charge the unit owner a fee of not more than an aggregate of four hundred dollars to compensate the association for the costs incurred in the preparation and delivery of a statement or other documents furnished by the association" for the purposes of resale and disclosure.

Estate at sufferance

"The interest of a tenant who has come rightfully into possession of lands by permission of the owner, and continues to occupy the same after the period for which he is entitled to hold by such permission." —The Law Dictionary

Trust Accounts Other people's money ARS 32-2174 regulates the way a property manager handles monies of a property management client. We refer to these monies as "other people's monies." They must be held in trust, and they must be accounted for to the penny. The bank account must be designated by one of these terms:

"Trust account" "Fiduciary account" "In trust for (individual or entity name)" "Trustee for (individual or entity name)" "Fiduciary for (individual or entity name)"

Under R4-28-1101(B), the seller's agent likewise has an obligation to disclose information that would materially affect the consideration to be paid by a buyer, regardless of whether or not the seller makes such disclosure:

"Under a negligent misrepresentation theory, an agent must disclose all material facts about which they should have known under the circumstances. Pursuant to this theory of recovery, an agent cannot simply turn a blind eye to potential sources of adverse information and have no liability, even if the lender tells the agent not to review the inspection report. Therefore, if an inspection report identifies a material defect and the agent does not disclose the defect prior to close of escrow, the agent will have liability based on this failure to disclose."

Question #6 of 11 Question ID: 1150061 Agents advertising their own property must do all of the following EXCEPT A) use "owner/agent" on any correspondence. B) use "owner/agent" as a sign rider. C) use "owner/agent" on all Internet advertising. D) use "owner/agent" on all flyers.

A) use "owner/agent" on any correspondence.

A recent court decision regarding agency came down in Lerner v. DMB when the court opined:

"With the client's informed consent and in the absence of fraud, the duties a broker owes its client may be limited by contract. The dual representation that the Lerners signed in this case is just such an agreement." Before this case, there was limited direction in this area. The law required the consent to dual agency but didn't elaborate much beyond that or dictate the language in a consent form. As a result of the Lerner case, the court became clear on when a sales associate or seller must disclose information otherwise protected by ARS 32-2156. The court awarded attorney fees and court costs to DMB Realty who had been put through two court hearings and had been found to have followed the signed agreements and the statutes. The settlement cost was entirely that of the sellers.

Most loan agreements include an acceleration clause and power of sale clause, triggered when a borrower/mortgagor is in default. For example, when a mortgagor does not make loan payments (typically 2+), the lender will

"accelerate" all loan payments, calling the entire balance due. If that goes unpaid, the mortgagee sues in court for a judicial foreclosure. The court will order the sheriff to conduct the sale.

Pur autre vie means

"for the life of another" and is a duration of a property interest. While it is similar to a life estate, it differs in that a person's life interest will last for the life of another person instead of their own.

According to the Manufactured Housing Institute's National Communities Council (MHINCC), a mobile home

"is the term used for manufactured homes produced before June 15, 1976, when the HUD Code went into effect."

At the sale, the highest bidder receives a sheriff's certificate but must wait six months. That's the statutory

"right of redemption," whereby each mortgagor has that time to find the monies to pay off the entire amount of the loan and to redeem the property.

"Cemetery" or "cemetery property" means any one, or a combination of more than one, of the following in a place used, or intended to be used, and dedicated for cemetery purposes:

(a) A burial park, for earth interments. (b) A mausoleum, for crypt or vault entombments. (c) A crematory, or a crematory and columbarium, for cinerary interments. (d) A cemetery plot, including interment rights, mausoleum crypts, niches and burial spaces.

Unsubdivided lands can be understood simply as land that has not yet been subdivided, by going through the Department of Real Estate's subdivision application process. In describing unsubdivided lands, we are led to only one definition under ARS 32-2101(60), which defines unsubdivided lands as follows:

(a) Land or lands divided or proposed to be divided for the purpose of sale or lease, whether immediate or future, into six or more lots, parcels or fractional interests and the lots or parcels are thirty-six acres or more each but less than one hundred sixty acres each, or that are offered, known or advertised under a common promotional plan for sale or lease, except that agricultural leases shall not be included in this definition. (b) Includes any land that is sold that would otherwise constitute the sixth lot, parcel or fractional interest if the sale occurs ten or more years after the earliest of the previous five sales and if all of the sales consist of property that was originally contained within the same parcel that is thirty-six acres or more and less than one hundred sixty acres.

E. Notwithstanding any provision in the community documents, the association is prohibited from doing any of the following:

1. Requiring a member to provide the association with a copy of the tenant's rental application, credit report, lease agreement or rental contract or other personal information except as prescribed by this section. 2. Requiring the tenant to sign a waiver or other document limiting the tenant's due process rights as a condition of the tenant's occupancy of the rental property. 3. Prohibiting or otherwise restricting a member from serving on the board of directors based on the member's not being an occupant of the property. 4. Imposing on a member or managing agent any fee, assessment, penalty or other charge in an amount greater than fifteen dollars for incomplete or late information regarding the information requested pursuant to subsection C of this section. F. Any attempt by an association to exceed the fee, assessment, penalty or other charge authorized by subsection D or E of this section voids the fee, assessment, penalty or other charge authorized by subsection D or E of this section. G. An owner may use a crime free addendum as part of a lease agreement. This section does not prohibit the owner's use of a crime free addendum. H. This section does not prohibit and an association may lawfully enforce a provision in the community documents that restricts the residency of persons who are required to be registered pursuant to section 13-3821 and who are classified as level two or level three offenders. I. An owner of rental property shall abate criminal activity as authorized in section 12-991.

The designated broker or the broker's delegate must review and initial the sales documents within

10 business days.

Any material change in the any legal entity such as a change in management or address requires notice to the Department within

10 calendar days.

Unsubdivided and Subdivided Lands (cont.) Acting in Concert It is unlawful for a person or persons to attempt to circumvent the subdivision statutes. There is liability to both a member of the public and/or a licensee, if there is proof of the following:

A concert of action A unity of purpose or design Two or more defendants working separately but to a common purpose and each acting with the knowledge and consent of the others. Example A landowner divided his 10-acre parcel into five 2-acre parcels. He sells parcels one, two, three and four, and is now down to his last lot. A man asks if he can purchase one acre of the remaining 2-acre lots, or half a parcel. The seller explains that he cannot do it without becoming a subdivider. Several days later, the man returns with a friend and they agree to purchase the 2-acre parcel together. During the escrow period, the two men go to another escrow company and set up another escrow showing a surveyed division of the property into two lots, scheduled to close a week after the first escrow closes. That is one example of the two buyers acting in concert to circumvent the subdivision statutes.

Contract Amendments

A contract amendment is a change in the executed agreement. In the event a change needs to be made to the purchase contract, the licensee would initiate an amendment for his client, have the client sign it, and forward it to the other principal, through the agent, for a signature. The change must be mutual in order to change the executed agreement. Just initiating a request for a change by one of the parties does not automatically mean it will be granted.

Contracts in Arizona are no different from contracts in most other states. At minimum, a contract is a voluntary agreement between two or more legally competent parties to perform or refrain from performing a legal act. A real estate licensee will use many types of contracts, all of which will meet this essential definition.

A contract essential to real estate practice is the real estate sales contract. Under ARS 32-2101(49), definitions, a real estate sales contract is defined as an agreement in which one party agrees to convey title to real estate to another party upon the satisfaction of specified conditions set forth in the contract.

Deed in Lieu

A deed in lieu of foreclosure is a deed instrument in which a borrower conveys all interest in a real property to the lender to satisfy a loan that is or may go into default and avoid foreclosure proceedings. Reasons to do a deed in lieu include the following: An economic or other hardship A delinquency or upcoming delinquency in monthly payments An attempt to short sale the property, usually for a minimum of 90 days, which does not produce a buyer No junior liens or back taxes or association fees

Deeds Of Trust

A deed of trust has three participants: the trustor (borrower), the trustee (independent third party), and the beneficiary (lender

Notice of Intent to develop a cemetery. Many of the requirements are similar to those required by subdivision developers for a public disclosure report; but before the plots are sold, the Department must examine the property and make public their findings.

A developer of a cemetery must give the Department a

Foreclosure

A foreclosure, whether judicial or nonjudicial, is a legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage or deed of trust note, or default of other terms in the mortgage or deed of trust document. The foreclosure procedure brings the rights of the parties to a conclusion and passes the title in the encumbered property to either the holder of the mortgage, the beneficiary of a deed of trust, or a third party, who may purchase the realty at the foreclosure sale

Forfeiture

A forfeiture is a remedy to a seller/vendor to default of a buyer/vendee in a land contract sale. The seller takes the property to regain equitable title without compensation.

Cooperative

A housing cooperative, or "co-op," is owned by the corporation itself with each owner acquiring a share. The co-op's shareholders are bound by an occupancy agreement, called a proprietary lease, which generally defines the owner's occupancy rights and responsibilities. The lease is personal property as opposed to real property. While Arizona is not known for many cooperatives, licensees need to realize that the cooperative may look like a condominium and more investigation may be needed.

Other Wildlife

A javelina family crosses Navahopi Road in Uptown, Sedona, Arizona. Photo by TwinsofSedona, courtesy of Wikimedia Commons (Creative Commons CC0 1.0 Universal Public Domain Dedication) The wildlife of Arizona include javelina, coyotes, bears, bobcats, mountain lions, deer, elk, prairie dog, rattle snake, Gila monster, bighorn sheep, jaguar, roadrunner, Africanized bee, coral snake, brown spider, black widow spider, Sonoran desert toad, and more. All are disclosable to buyers who may have small children, animals, yards, property to defend, or out of courtesy to the new owner. Many of these will be seen in yards and may cause concern for homeowners.

Liquidated Damages

A listing broker's seller cancels a one-year listing in month 5. In the event the cancellation is not mutual, the broker will impose the liquidated damages clause. Liquidated damages are usually found in agreements to establish a predetermined sum that must be paid if a party fails to perform as outlined in the contract. In Focus Point Properties, LLC v. Cleo Johnson, 1 CA-CD 12-0766 (June 2014), the listing broker had a liquidated damages clause in the one-year listing agreement with his seller client. When the seller, unilaterally, canceled the listing agreement, the broker took the seller to court for his commission. The same amount of sale or rental commission shall be due and payable to broker, if without the consent of broker, the premises is withdrawn from this listing, or otherwise withdrawn from sale or rental or rented, transferred, or conveyed by owner.... If completion of a sale or rental is prevented by default of owner, or with the consent of owner, the entire sale or rental commission as appropriate shall be paid to broker by owner.

Measurement Systems II

A mete is the line, and the bound is the area within the metes that describes a parcel of land. Starting at the point of beginning (POB), the length of each boundary and the angle that it forms with the previous boundary is described. This continues to the point of end (POE), which is also the point of beginning, because all properties must have enclosed boundaries. Survey benchmark monuments or markers are brass or metal disks in the ground. They measure exact horizontal positions (latitude and longitude) on the earth and give surveyors a point of reference. The initial point for a survey in Arizona lies atop a 150-foot-tall hill west of Phoenix called Monument Hill. Arizona's base line and meridian cross near the confluence of the Gila and the Salt Rivers. The base line, which we call Baseline Road, runs east and west, while the meridian runs north and south. Lines running parallel to the base line are called standard parallels and are 30 miles apart. Standard parallels are also called correction lines.

Notices ARLTA Notices It's important to understand that the statutes give both landlord and tenant clarification as to what notices are required, and when, why, and how to issue notice. ARS 33-1313 defines ARLTA notices:

A person has notice of a fact if he has actual knowledge of it, has received a notice or notification of it or from all the facts and circumstances known to him at the time in question he has reason to know that it exists. A person "knows" or "has knowledge" of a fact if he has actual knowledge of it. ... A person "receives" a notice or notification when it comes to his attention, or in the case of the landlord, it is delivered in hand or mailed by registered or certified mail to the place of business of the landlord through which the rental agreement was made or at any place held out by him as the place for receipt of the communication or delivered to any individual who is designated as an agent by section 33-1322 or, in the case of the tenant, it is delivered in hand to the tenant or mailed by registered or certified mail to him at the place held out by him as the place for receipt of the communication or, in the absence of such designation, to his last known place of residence...

Purchase money mortgage STUDY INFO

A purchase money mortgage is the total monies used to purchase the property. The monies could be from the seller to a buyer, from a mortgage lender to a buyer, or a combination of both. Buyers borrow money from conventional lenders, the federal government, hard money lenders, or sellers. An example might be seller financing; however, the seller may still have a loan on the property. The buyer and the seller may choose to do a wraparound mortgage, which "wraps around" the existing mortgage on the home. The buyer then pays a monthly mortgage payment to the seller and the seller continues paying on the original mortgage. Most buyers opt for a fixed-rate loan, which is a loan with an interest rate that does not change over the life of the loan. It is generally amortized over a 30-year period, but it may be for a lesser time period. If the loan is from Fannie Mae (a government entity that purchases certain loans that meet specific guidelines with up to a 97/3 LTV), the applicant will fill out a Uniform Residential Loan Application (URLA), which contains all the information necessary for a lender to establish the risk profile of a borrower. Other loan programs include FHA, VA, USDA, interest only, jumbos, and sometimes hard money loans, which usually run about 4% to 8% higher than those from a conventional lender. With an FHA loan, the contract may require that the parties sign a conditional commitment and amendatory clause addendum stating the home appraisal value needs to be no less than the contract sales price. If the appraisal comes in lower than the purchase price, the borrower may cancel and get the earnest deposit returned, no matter what the purchase agreement states. During the loan qualifying period, the borrower may choose to lock the rate or allow the interest rate to float. If the borrower thinks the interest rates will rise, she may choose to lock the rate, or if she thinks the rate will drop, she may float the rate. Commercial loans are the same, except for small business loans and personal guarantees, which are generally required because the loan is made to an entity rather than an individual. Small business loans or government loans are typically offered through banks and credit unions that partner with the Small Business Administration (SBA). The SBA is a U.S. government body that provides support for small businesses and entrepreneurs. Commercial loans are the same financing instruments used in residential purchases: mortgage, deed of trust with promissory note, or an agreement of sale.

PRACTICE ACTIVITY UNIT 29 640, quadrangle.

A section is described under the PLSS as an area 1 square mile, containing _______ acres, with 36 sections making up one township in a ____________

Specific Performance

A situation in which the seller decides not to sell during the executory period and the buyer chooses to go to court to force the seller to sell.

Special Agency

A special agency exists when one has limited authority granted to him through a principal.

Remedies

A special detainer action occurs when the tenant has remained in or on the property after the landlord has given written notice that the rental agreement has been terminated and that the tenant must leave the property. It is similar to a forcible detainer. A tenant may not ever withhold rent under the ARLTA. If a tenant does not pay rent after a five-day notice, the landlord may institute a special detainer action. The lease may only be reinstated if the tenant pays "all past due rent, reasonable late fees set forth in a written rental agreement, attorney fees and court costs." The landlord may recover all damages resulting from the noncompliance of the tenant and the landlord "may discontinue utility services provided by the landlord on the day following the day that a writ of restitution is executed... pursuant to ARS 12-1181." If a landlord receives a judgment against a tenant, five days after the date of the judgment, writ of restitution may be obtained for repossession of the residence. These writs are served by constables, who will direct the tenant to leave at that time. The landlord can cut off utility services to the residence at that time but cannot dispose of or sell any of the tenant's personal property for 14 days. ARS 33-1368(E) - 33-1370. A tenant can avoid the hassle, expense, and embarrassment associated with a writ of restitution by turning in the keys to the landlord. Doing so ends the tenant's possession of the residence.

Disclosures Not Required

A stigmatized property is one that society has found undesirable because of events that occurred there or because of proximity of the property to a known nuisance. ARS 32-2156 (Real estate sales and leases; disclosure) contains the following items related to stigmatized properties that do not require disclosure. No criminal, civil or administrative action may be brought against a transferor or lessor of real property or a licensee for failing to disclose that the property being transferred or leased is or has been:The site of a natural death, suicide, homicide or any other crime classified as a felony.Owned or occupied by a person exposed to the human immunodeficiency virus (HIV) or diagnosed as having the acquired immune deficiency syndrome (AIDS) or any other disease that is not known to be transmitted through common occupancy of real estate.Located in the vicinity of a sex offender. Failing to disclose any fact or suspicion as set forth in subsection A shall not be grounds for termination or rescission of any transaction in which real property has been or will be transferred or leased.

Marketable Title

A title commitment is prepared when the property enters escrow to determine how marketable the property title is. A marketable title is defined as a title that can be readily marketed to a reasonably prudent purchaser. Reasonable prudence in real property purchases means the buyer is aware of the facts of the transaction, particularly as they concern liens and encumbrances. Arizona uses title insurance in order to protect buyers and lenders from any postclosing ownership surprises. The title company's examiner will do a search of the records and then insure the title. There may be exceptions, and those exceptions can cloud the title, sometimes so much that the buyer chooses not to close the escrow, or perhaps the lender will not loan due to encroachments, disputed boundaries, or liens. The preliminary title report or title commitment will contain Schedule A and Schedule B. Schedule A will contain the basic facts of the transaction, including the date of certification (the effective date), the proposed insureds (purchaser and lender), the types and liability amounts of the policies to be issued, the estate being insured, how the title to the state is currently vested (present owner or owners and how they hold title), the legal description, and the address of the subject property. Schedule B lists the requirements that must be met before a title policy can be issued, including any or all of the following items: releases of deeds of trust, releases of tax liens, entity or estate documentation, releases of judgments, correction deeds, warranty deeds, and deeds of trust. It then lists the necessary exceptions to title—the items not being insured by the title company—which include seven standard exceptions, taxes, and further burdens such as covenants, conditions, and restrictions (CC&Rs), easements, and/or mineral reservations. Escrow companies in Arizona are regulated by the Arizona Department of Financial Institutions, while the title insurance falls under the regulatory requirements of the Arizona Department of Insurance.

Special Detainer

A type of lawsuit filed by a landlord in order to legally expel or evict a tenant.

Option

A unilateral contract in which a seller has been paid an option fee by a buyer to hold a property for the buyer's "option" or right to buy at a specific price before a certain date. The seller will sell "IF" the buyer decides to buy and thus only one promise is made, creating a unilateral contract.

Open Listing

A unilateral contract in which a seller promises to pay a commission "IF" a real estate agent finds a buyer, but the real estate agent is not obligated to find a buyer.

Contract

A voluntary agreement between two or more legally competent parties to perform or refrain from performing a legal act.

Real Estate Employment Agreement

A written agreement by which a real estate broker is entitled to compensation for services rendered (ARS 32-2151.02.E), such as buyer and seller representation agreements. Such agreements must include unambiguous language, a start and stop date, commission information, and signatures of all parties to the agreement.

Question #2 of 10 Question ID: 1150285 The W1/2 of the NW1/4 of the NW1/4 of the SE1/4 of the SW1/4 of a section is to be paved for parking at a cost of $2.25 per square foot. The total paving cost would be A) $122,512.50. B) $115,600.00. C) $490,050. 00. D) $147,015. 00.

A) $122,512.50.

Question #2 of 10 Question ID: 1150112 How much can the association charge a member for the preparation of documents that must be given to the buyer during a sale? A) $400 B) $500 C) $100 D) $200

A) $400

Question #3 of 10 Question ID: 1150214 What kind of notice must be given to a tenant for moving in a roommate who is NOT on the lease? A) 10 days B) 5 days C) 14 days D) Immediate termination

A) 10 days

Question #3 of 10 Question ID: 1150216 What are the remedies to the landlord if the tenant refuses access? A) 10-day notice of breach to tenant with possible termination of the lease B) 5-day notice of breach to tenant with possible termination of the lease C) Give tenant 10-day notice of breach D) Give tenant 5-day notice of breach

A) 10-day notice of breach to tenant with possible termination of the lease

Question #10 of 10 Question ID: 1150278 From POB (point of beginning) of the NW corner of SE quadrant of Section 5, go East 1,320 feet. Then draw a straight line due South 2,640 feet. Then draw a diagonal line back to the POB. What is the acreage and in which quadrant is the parcel located? A) 40 acres in the SE quadrant B) 80 acres in the SE quadrant C) 20 acres in the SW quadrant D) 160 acres in the SW quadrant

A) 40 acres in the SE quadrant The answer is 40 acres in the SE quadrant. Draw out the section. The parcel is a triangle located in the SW area of the SE quadrant. 1,320 feet is ¼ of a mile. 2,640 is ½ of a mile.

Question #11 of 15 Question ID: 1250780 A well registration number begins with A) 55-. B) 66-. C) 77-. D) 44-.

A) 55-.

Question #4 of 13 Question ID: 1150164 Which answer is MOST correct regarding the difference between an option and a right of first refusal? A) An option is a right to purchase property at a set price for a fixed period of time; a right of first refusal is a paid right to purchase property at a time in the future B) An option is a right to purchase property at a set price for a fixed period of time, with consideration; a right of first refusal is a right to purchase property only if it is offered for sale in the future C) An option is a right to purchase property at a set price; a right of first refusal is a right to match or better the first offer on a property which is for sale D) A right of first refusal is a right to purchase property only if it is offered for sale in the future; an option is a right to purchase property at a set price for a fixed period of time

A) An option is a right to purchase property at a set price for a fixed period of time; a right of first refusal is a paid right to purchase property at a time in the future

Question #1 of 15 Question ID: 1150235 Arizona water laws are based on a century of events that have shaped Arizona's past and will shape its future. Which of these statements is FALSE? A) Arizona has four Irrigation Non-Expansive Areas. B) Arizona water law is "first in time, first in line." C) Arizona has five Active Management Areas. D) Arizona water law is based on prior appropriation.

A) Arizona has four Irrigation Non-Expansive Areas.

Question #13 of 15 Question ID: 1150235 Arizona water laws are based on a century of events that have shaped Arizona's past and will shape its future. Which of these statements is FALSE? A) Arizona has four Irrigation Non-Expansive Areas. B) Arizona water law is based on prior appropriation. C) Arizona has five Active Management Areas. D) Arizona water law is "first in time, first in line."

A) Arizona has four Irrigation Non-Expansive Areas.

Question #9 of 13 Question ID: 1150176 S Development Corp v. Pima Capital Managements was a very important real estate case. What was it about? A) As Is B) Landlord vs. tenant C) Special detainer D) Disclosure

A) As Is

Question #6 of 15 Question ID: 1150228 The Arizona Department of Environmental Quality was established in 1987. Which of the following statements is NOT true? A) At the time ADEQ was established, CERCLA was established. B) At the time ADEQ was established, WQARF was established. C) ADEQ is responsible for the quality of air and water. D) ADEQ enforces state and federal programs.

A) At the time ADEQ was established, CERCLA was established.

Question #7 of 7 Question ID: 1150078 The Arizona real estate employment agreement statute requires four things. Which of the following is NOT a requirement of the statute? A) Cancellation clause B) Unambiguous words C) Commission spelled out D) Commencement and expiration dates

A) Cancellation clause

Question #4 of 15 Question ID: 1150241 Arsenic can be remediated from water by three of these systems. Which one is NOT a recognized system for arsenic removal? A) Charcoal filtration B) Reverse osmosis C) Ultra-filtration D) Ion exchange

A) Charcoal filtration

Question #3 of 10 Question ID: 1150274 After a subdivider notifies the Department of the intent to subdivide, the Department will review the many items on the application. Which of the following is NOT on the application for review? A) Check for parks and open space B) Review any deed restrictions C) Review disclosures within 1 mile radius of the subdivision D) Check for assured water supply from ADWR

A) Check for parks and open space

Question #10 of 15 Question ID: 1150224 Which of the following is NOT an effective method for lowering levels of arsenic coming from a well? A) Chlorination B) Activated alumina C) Distillation D) Ion exchange

A) Chlorination

Question #9 of 10 Question ID: 1150105 Arizona property tax rates are highest in which category? A) Commercial B) Residential C) Residential rentals D) Land

A) Commercial

Question #4 of 11 Question ID: 1250760 The recovery fund is for members of the public who have been harmed by the actions of a licensee, including all of the following actions EXCEPT A) did not disclose a known latent defect to a buyer client. B) gave false information about what a client could expect to get in monthly rent from a tenant. C) acted as a property manager for a member of the public without a license. D) sold a property to a buyer while the license was inactive.

A) December 31, 2020

Question #4 of 15 Question ID: 1150258 Wildlife in Arizona can be an environmental issue for some people, especially those with pets. Disclosure is required. Which of the following would NOT be harmful to pets? A) Deer B) Javelina C) Snakes D) Coyotes

A) Deer

Question #3 of 15 Question ID: 1150237 Which one of these answers is definitely NOT effluent water? A) Directly from the tap B) After tertiary level treatment C) River water D) After secondary level treatment

A) Directly from the tap

Question #7 of 10 Question ID: 1150102 Which of these does NOT describe a beneficiary deed? A) Does not need to be recorded B) Less expensive than establishing a life estate C) Can be withdrawn D) No probate

A) Does not need to be recorded

Question #12 of 13 Question ID: 1150169 Paul and Sam execute a purchase agreement on Paul's property for $500,000, to close in 30 days. During the escrow period, Sam has what type of interest? A) Equitable B) Fee Simple C) Executory D) No interest till closing

A) Equitable

Question #4 of 13 Question ID: 1150169 Paul and Sam execute a purchase agreement on Paul's property for $500,000, to close in 30 days. During the escrow period, Sam has what type of interest? A) Equitable B) No interest till closing C) Fee Simple D) Executory

A) Equitable

Question #1 of 15 Question ID: 1250779 Which of the following statements is NOT true about regulated wells in Arizona? A) Exempt wells pump 35 GPM or more. B) The buyer must notify the ADWR within 30 days of any wells on the property after taking possession of the property. C) The well registry number will begin with the numbers 55-. D) Wells that serve over 25 residents are considered community water systems and under more requirements.

A) Exempt wells pump 35 GPM or more.

Question #13 of 13 Question ID: 1150140 A real estate salesperson lists a property on a website and immediately receives an inquiry from a potential buyer out of state. The buyer wants to make an offer without seeing the property, so, the salesperson writes it up. Which of the following statements is NOT accurate? A) The buyer will have a rescission period because he didn't see the property before closing the transaction. B) The buyer has the opportunity to cancel the contract during the inspection period. C) The salesperson must have the informed consent of the buyer and the seller to represent both of them. D) The buyer does not have to give consent to limited representation and can ask another agent to write the offer.

A) The buyer will have a rescission period because he didn't see the property before closing the transaction.

Question #2 of 10 Question ID: 1150114 When a mortgagor defaults on a mortgage, which of the following statements is FALSE? A) The debt is accelerated, the court gives the mortgagee a judgment, and the trustee sale is held. B) The period of time before the sale is called the equity of redemption, and the time after the sale is the right of redemption. C) A lis pendens is filed and recorded. D) The sheriff gives the high bidder a sheriff's certificate to be exchanged six months later for a sheriff's deed if the mortgagor does not redeem the property

A) The debt is accelerated, the court gives the mortgagee a judgment, and the trustee sale is held.

Question #4 of 10 Question ID: 1150212 Three of the following statements about granting a writ of restitution are accurate. Which one is NOT accurate? A) The landlord must hold the tenant's property until the tenant has paid all monies owed for the storage of all the tenant's belongings left behind. B) To reclaim the personal property, the tenant must pay the landlord only for the cost of removal and storage for the time the property is held by the landlord. C) The landlord may hold the property for 14 days and, if held at the property, may have the locks changed. D) The landlord must prepare an inventory and promptly notify the tenant of the location and cost of storage of the personal property by sending a notice by certified mail, return receipt requested, addressed to the tenant's last known address and to any of the tenant's alternative addresses known to the landlord

A) The landlord must hold the tenant's property until the tenant has paid all monies owed for the storage of all the tenant's belongings left behind.

Question #13 of 15 Question ID: 1150253 The doctrine of prior appropriation in Arizona can be stated accurately by three of these statements. Which statement is NOT accurate or is false? A) The right applies to groundwater. B) The right is for beneficial use. C) The right applies to surface water. D) "First in Time, First in Right."

A) The right applies to groundwater.

Question #1 of 10 Question ID: 1150210 Jordan moved into a rental on Monday and discovered that the property had mold in the downstairs walk-out bedroom of the house. Jordan had asthma problems and notified the landlord that the mold should have been disclosed to him. What is the process for Jordan to notify the landlord and what can Jordan do? A) The tenant sends a notice to the landlord to cure within five days or the lease is terminated. B) There is nothing the tenant can do because he did a walk-through before signing the lease. C) Material falsification by the landlord allows for immediate cancellation of the lease D) The tenant sends a 10-day-notice to landlord to cure the situation or the lease will be terminated.

A) The tenant sends a notice to the landlord to cure within five days or the lease is terminated.

Question #15 of 15 Question ID: 1150238 Which one of these irrigation rights can be leased or sold without the land? A) Type 2 irrigation rights B) Type 1 irrigation rights C) Municipal water rights D) Grandfathered irrigation rights

A) Type 2 irrigation rights

Question #15 of 15 Question ID: 1150260 Ginny owned a piece of property with grandfathered irrigation rights. Which of the following statements about irrigated grandfather rights is FALSE? A) Under the Code, "irrigate" means to apply water to three or more acres of land to produce plants for sale or human consumption or as feed for livestock. B) An irrigation grandfathered right may not be sold apart from the associated land. C) An irrigated grandfathered right confers the right to irrigate specific plots of land that had been irrigated with groundwater between 1975 and 1980. D) An irrigation grandfathered right specifies how much groundwater may be used.

A) Under the Code, "irrigate" means to apply water to three or more acres of land to produce plants for sale or human consumption or as feed for livestock.

Question #6 of 10 Question ID: 1150275 Any sale of subdivided land, which is without permanent access, A) is rescindable by the purchaser. B) will be given title insurance to insure access. C) must receive an easement before completion of the transaction. D) is guaranteed by the developer.

A) is rescindable by the purchaser.

Question #4 of 10 Question ID: 1150282 All of the following are true about a township EXCEPT A) it is 640 acres. B) it has a range line and a township line. C) it contains 36 sections. D) it is 6 miles square.

A) it is 640 acres.

Question #3 of 10 Question ID: 1150117 The land contract has a foreclosure process that includes A) notice of forfeiture and completion of forfeiture. B) power of sale and right of redemption. C) a court hearing and a right of reinstatement. D) notice of default and sheriff's sale.

A) notice of forfeiture and completion of forfeiture.

Question #7 of 10 Question ID: 1150126 Helen, Jane, and Sally decided to buy a condo together. They bought the property together and had equal shares. Sally passed away and her niece became a _________________________ with Helen and Jane. A) tenant in common B) joint tenant C) remainderman D) beneficiary

A) tenant in common

Question #6 of 13 Question ID: 1150162 "Time is of the essence" in a purchase contract means that A) the principals must adhere to timelines in the contract. B) a contingency must be completed according to the terms and conditions of the agreement. C) if a deadline is missed, the agreement is automatically canceled. D) the transaction is following an accelerated timeline.

A) the principals must adhere to timelines in the contract.

Question #13 of 13 Question ID: 1150163 The BEST definition of marketable title is A) title that can be readily sold to a reasonably prudent purchaser. B) title to a property that is valued higher than the houses around it. C) title to a property that has recently been found to be in violation of zoning laws. D) title to a property whose boundaries have been disputed and are unresolved.

A) title that can be readily sold to a reasonably prudent purchaser.

ARS 33-1806.01 instructs the association in dealing with rentals:

A. A member may use the member's property as a rental property unless prohibited in the declaration. B. A member may designate in writing a third party to act as the member's agent with respect to all association matters relating to the rental property, except for voting in association elections and serving on the board of directors. C. Notwithstanding any provision in the community documents, on rental of a member's property an association shall not require a member or a member's agent to disclose any information regarding a tenant other than the name and contact information for any adults occupying the property, the time period of the lease, including the beginning and ending dates of the tenancy, and a description and the license plate numbers of the tenants' vehicles. D. On request of an association or its managing agent for the disclosures prescribed in subsection C of this section, the managing agent or, if there is no managing agent, the association may charge a fee of not more than twenty-five dollars, which shall be paid within fifteen days after the postmarked request.

ARS 12-526 defines adverse possession as follows:

A. A person who has a cause of action for recovery of any lands, tenements or hereditaments from a person having peaceable and adverse possession thereof, cultivating, using and enjoying such property, shall commence an action therefor within 10 years after the cause of action accrues, and not afterward. Translation: If a property owner tells a person who is on or is using the land in an open, hostile, and notorious manner, within 10 years, to cease and desist, and takes action, that owner has cause of action for recovering their land and the interloper has no claim. The situation may require a quiet title actionin court, under ARS 12-1101. The court will determine who has the right to own the property under adverse possession. If the owner allows the continuing use of the property by the trespasser, the license gives permission and therefore does not meet the "open, notorious, and hostile use" required for a trespasser to claim adverse possession.

Because the statutes are more about subdivided lands than unsubdivided lands, we will attempt to clarify the issue by explaining at what point a seller is required to give an affidavit of disclosure. ARS 33-422:

A. A seller of five or fewer parcels of land, other than subdivided land, in an unincorporated area of a county and any subsequent seller of such a parcel shall furnish a written affidavit of disclosure to the buyer, at least seven days before the transfer of the property, and the buyer shall acknowledge receipt of the affidavit... C. No release or waiver of a seller's liability arising out of any omission or misrepresentation contained in an affidavit of disclosure is valid or binding on the buyer. D. The buyer has the right to rescind the sales transaction for a period of five days after the affidavit of disclosure is furnished to the buyer. E. The seller shall record the executed affidavit of disclosure at the same time that the deed is recorded. The county recorder is not required to verify the accuracy of any statement in the affidavit of disclosure. A subsequently recorded affidavit supersedes any previous affidavit.

ARS 33-1260 is the statute governing resale of units:

A. For condominiums with fewer than fifty units, a unit owner shall mail or deliver to a purchaser or a purchaser's authorized agent within ten days after receipt of a written notice of a pending sale of the unit, and for condominiums with fifty or more units, the association shall mail or deliver to a purchaser or a purchaser's authorized agent within ten days after receipt of a written notice of a pending sale that contains the name and address of the purchaser all of the following in either paper or electronic format: 1. A copy of the bylaws and the rules of the association. 2. A copy of the declaration. 3. A dated statement containing: (a) The telephone number and address of a principal contact for the association, which may be an association manager, an association management company, an officer of the association or any other person designated by the board of directors. (b) The amount of the common expense assessment for the unit and any unpaid common expense assessment, special assessment or other assessment, fee or charge currently due and payable from the selling unit owner. (c) A statement as to whether a portion of the unit is covered by insurance maintained by the association. (d) The total amount of money held by the association as reserves. (e) If the statement is being furnished by the association, a statement as to whether the records of the association reflect any alterations or improvements to the unit that violate the declaration. (f) If the statement is being furnished by the unit owner, a statement as to whether the unit owner has any knowledge of any alterations or improvements to the unit that violate the declaration. (g) A statement of case names and case numbers for pending litigation with respect to the unit filed by the association against the unit owner or filed by the unit owner against the association. (h) A statement that provides "I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser). By signing this statement, I acknowledge that I have read and understand the association's contract with me (the purchaser). I also understand that as a matter of Arizona law, if I fail to pay my association assessments, the association may foreclose on my property." The statement shall also include a signature line for the purchaser and shall be returned to the association within fourteen calendar days. 4. A copy of the current operating budget of the association. 5. A copy of the most recent annual financial report of the association. If the report is more than ten pages, the association may provide a summary of the report in lieu of the entire report. 6. A copy of the most recent reserve study of the association, if any. 7. A statement summarizing any pending lawsuits, except those relating to the collection of assessments owed by unit owners other than the selling unit owner, in which the association is a named party, including the amount of any money claimed. B. A purchaser or seller who is damaged by the failure of the unit owner or the association to disclose the information required by subsection A of this section may pursue all remedies at law or in equity against the unit owner or the association, whichever failed to comply with subsection A of this section, including the recovery of reasonable attorney fees. C. The association may charge the unit owner a fee of not more than an aggregate of $400 to compensate the association for the costs incurred in the preparation and delivery of a statement or other documents furnished by the association pursuant to this section for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property.

ARS 33-1806 says the following: Resale of units and the requirements prior to the transfer:

A. For planned communities with fewer than fifty units, a member shall mail or deliver to a purchaser or a purchaser's authorized agent within ten days after receipt of a written notice of a pending sale of the unit, and for planned communities with fifty or more units, the association shall mail or deliver to a purchaser or a purchaser's authorized agent within ten days after receipt of a written notice of a pending sale that contains the name and address of the purchaser all of the following in either paper or electronic format: 1. A copy of the bylaws and the rules of the association. 2. A copy of the declaration. 3. A dated statement containing: (a) The telephone number and address of a principal contact for the association, which may be an association manager, an association management company, an officer of the association or any other person designated by the board of directors. (b) The amount of the common regular assessment and the unpaid common regular assessment, special assessment or other assessment, fee or charge currently due and payable from the selling member. If the request is made by a lienholder, escrow agent, member or person designated by a member pursuant to section 33-1807, failure to provide the information pursuant to this subdivision within the time provided for in this subsection shall extinguish any lien for any unpaid assessment then due against that property. (c) A statement as to whether a portion of the unit is covered by insurance maintained by the association. (d) The total amount of money held by the association as reserves. (e) If the statement is being furnished by the association, a statement as to whether the records of the association reflect any alterations or improvements to the unit that violate the declaration. The association is not obligated to provide information regarding alterations or improvements that occurred more than six years before the proposed sale. Nothing in this subdivision relieves the seller of a unit from the obligation to disclose alterations or improvements to the unit that violate the declaration, nor precludes the association from taking action against the purchaser of a unit for violations that are apparent at the time of purchase and that are not reflected in the association's records. (f) If the statement is being furnished by the member, a statement as to whether the member has any knowledge of any alterations or improvements to the unit that violate the declaration. (g) A statement of case names and case numbers for pending litigation with respect to the unit filed by the association against the member or filed by the member against the association. The member shall not be required to disclose information concerning such pending litigation that would violate any applicable rule of attorney-client privilege under Arizona law. (h) A statement that provides "I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser). By signing this statement, I acknowledge that I have read and understand the association's contract with me (the purchaser). I also understand that as a matter of Arizona law, if I fail to pay my association assessments, the association may foreclose on my property." The statement shall also include a signature line for the purchaser and shall be returned to the association within fourteen calendar days. 4. A copy of the current operating budget of the association. 5. A copy of the most recent annual financial report of the association. If the report is more than ten pages, the association may provide a summary of the report in lieu of the entire report. 6. A copy of the most recent reserve study of the association, if any. 7. A statement summarizing any pending lawsuits, except those relating to the collection of assessments owed by members other than the selling member, in which the association is a named party, including the amount of any money claimed. B. A purchaser or seller who is damaged by the failure of the member or the association to disclose the information required by subsection A of this section may pursue all remedies at law or in equity against the member or the association, whichever failed to comply with subsection A of this section, including the recovery of reasonable attorney fees.

Void Contract

An agreement that is against public policy cannot be enforced; a contract that obligates any party to perform an illegal act is void. All void contracts are unenforceable.

Express Contract

An agreement whereby the terms and conditions of the contract are in writing or stated orally. Only express, written contracts are enforceable in real estate.

Question #2 of 10 Question ID: 1150201 A lease agreement requires that certain items be in the lease as disclosure for all single-family homes. Which of the following is NOT a requirement? A) Name of landlord B) Bedbug information C) Right to be at the move-out D) Refundable and nonrefundable fees

B) Bedbug information

The quotes are legal terminology and accepted in all states, but the Arizona Residential Landlord and Tenant Act adds another category to the tenancies. ARS 33-1375 defines periodic tenancies and holdovers:

A.) The landlord or the tenant may terminate a week-to-week tenancy by a written notice given to the other at least ten days prior to the termination date specified in the notice. B.)The landlord or the tenant may terminate a month-to-month tenancy by a written notice given to the other at least thirty days prior to the periodic rental date specified in the notice. The holdover portion is an estate at sufferance. In the ARLTA, the law is defining how a landlord can remove the tenant who has overstayed his welcome.

When considering the difference between ADWR and ADEQ, note the following:

ADWR regulates the quantity of water. ADEQ regulates the quality of water.

Wells

ADWR requires all wells drilled to be reported to the Department. They also require notice of a change in ownership of the well. This is not to be confused with the claimant forms for the use of the water through the Gila and Little Colorado River adjudication. Once registered, the well can be found on ADWR's website under the well registry. The registered well number will start with "55." The well registry will reflect the date the well was drilled, the depth, the gallons per minute (GPM), and more. This information is important to buyers; sellers should also know the well's details and disclose those. If using the AAR well transfer addendum, the seller has five days to give the buyer a seller well disclosure statement, disclosing all the pertinent well information. The buyer then has five days after the receipt of the disclosure statement or time during the inspection period to have the well inspected and ask for seller repairs, or cancellation of the contract.

Under ____________, "'Professional service' is a service that may be lawfully rendered only by a person licensed or otherwise authorized by a licensing authority in this state to render the service."

ARS 10-2201.6

Quiet title action

ARS 12-1101 states the following: An action to determine and quiet title to real property may be brought by anyone having or claiming an interest therein, whether in or out of possession, against any person or the state when such person or the state claims an estate or interest in the real property which is adverse to the party bringing the action. An action might be required when there is a problem with the chain of title or issues of encroachment, easements, access, boundary disputes, fraudulent conveyance, and a host of others.

Arizona's Handyman Exemption

ARS 32-1121

_______________states: A. A corporation, limited liability company or partnership applying for a broker's license for the entity shall designate a natural person who is licensed as a broker and who is an officer of the corporation, manager of the limited liability company if management of the limited liability company is vested in one or more managers, member of the limited liability company if management is vested in the members or partner of the partnership who shall act as designated broker. The license shall extend no authority to act as designated broker to any other person. This subsection does not apply to a corporation or limited liability company applying for a license under subsection B of this section. An entity's broker's license issued pursuant to this subsection shall run concurrently with the corporation's, limited liability company's or partnership's designated broker's license.

ARS 32-2125

_____________________describes licenses for specific entities, such as corporations, limited liability companies, and partnerships. A corporation, limited liability company or partnership applying for a broker's license for the entity shall designate a natural person who is licensed as a broker and who is an officer of the corporation, manager of the limited liability company if management of the limited liability company is vested in one or more managers, member of the limited liability company if management is vested in the members or partner of the partnership who shall act as designated broker. The license shall extend no authority to act as a designated broker to any other person. ... An entity's broker's license issued pursuant to this subsection shall run concurrently with the corporation's, limited liability company's or partnership's designated broker's license.

ARS 32-2125(A)

To reinstate a terminated license, the license must not be expired or past the grace period, the license must be eligible for reinstatement under provisions of the order, and the individual must provide additional documentation described in

ARS 32-2131

According to _____________, "the broker shall make deposits to trust fund accounts by deposit slips. Receipts or other documentation shall identify each transaction, the date and the amount of each deposit and the names of parties involved in the transaction represented by the deposit." The trust account ledger must state whose money it is and what the purpose is. If money is accepted from a customer or client for use for that customer or client, it must go into the broker's trust account and not into any other account.

ARS 32-2151

Trust accounts, under ______________ require that every broker who receives monies entrusted to her immediately place them in the broker trust account or in the hands of an escrow company. A broker's trust account must be maintained in a federally insured or guaranteed repository within Arizona. The account must show that it is a "trust" or "fiduciary" account. Its purpose must be for handling other people's money.

ARS 32-2151,

The Arizona Department of Real Estate will not handle any complaints about landlord-tenant issues unless there is a licensee involved and that licensee has violated licensing law. For example, if a licensed property manager doesn't return a security deposit within the mandatory 14 business days, the ADRE would step in upon a complaint because the licensee is allegedly violating a licensing statute, such as

ARS 32-2151, because the property management broker must put the client monies into a trust account. The Department would have the authority to audit the trust account. The Department will also become involved if there is a complaint about someone doing property management without a license and, if necessary, have a cease and desist order issued.

Trust Account Recordkeeping and Accounting _____________outlines the way a broker should keep records of transactions. Most brokers today use electronic methods to file manage and file transactions.

ARS 32-2151.01

The Arizona REALTORS® Buyer-Broker Exclusive Employment Agreement is an example of a real estate employment agreement. As long as the agreement is signed by all parties, it fulfills the requirements for real estate employment agreements under

ARS 32-2151.02

Written agreements are necessary to take commission disputes to court. Under ARS 44-101, the statute of frauds, requires that "unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged..." an action cannot be heard in court to collect a commission. Under Young v. Rose, 286 p.3d 518 (Ariz. ct. app. 2012), the court concluded that an employment agreement must be signed by all parties as required in

ARS 32-2151.02

Understanding procuring cause is vital for the real estate licensee. Real estate commission agreements must meet both

ARS 32-2151.02 and Arizona Statute of Frauds ARS 44-101. Under the Arizona Statute of Frauds, there must be a written agreement, at least signed by the "party to be charged," in order to take a client to court to collect a commission.

In the case of Young v. Rose, 286 P.3d 518 (Az. Ct. App. 2012), a real estate licensee, Young, had sent a buyer broker agreement to the Roses before showing them properties they said they would be interested in seeing with her. The Roses downloaded the agreement, signed it, scanned it, uploaded it, and emailed it to Young. Young replied to the email, "Thank you." Young had not signed the version of the agreement she emailed to the Roses, nor did she send them a copy of the buyer broker agreement with her signature on it. Sometime later, during what Young believed to be her buyer broker agreement period, she became aware that the Roses had purchased a property from another agent. Young, through her attorney, proceeded to file a procuring cause lawsuit against the Roses. ARS 32-2151.02 was enacted after the statute of frauds and is entirely specific to real estate employment agreements:

ARS 32-2151.02 was enacted after the statute of frauds and is entirely specific to real estate employment agreements: "The superior court ruled that Young's real estate employment agreement with the Roses was unenforceable because she did not sign it. We agree that Young was statutorily required to sign the agreement and that it is unenforceable without her signature. We therefore affirm that aspect of the superior court's ruling." Under the statute of frauds, ARS 44-101, a buyer broker agreement with only the buyer's signature would be sufficient; however, under ARS 32-2151.02, Arizona real estate brokers and agents must have the signatures of all parties to any real estate employment agreement.

It should be noted that under _____________, "a real estate employment agreement is not required for a licensee to represent a party in a transaction." An exclusive agency relationship and enforceable commission can only be created by a written agreement (express agency).

ARS 32-2151.02(D)

Limited Representation and Stigmatized Property In 2012 the Arizona appeals court gave its opinion in the Lerner v. DMB Realty & Marissa Currier lawsuit (Lerner v. DMB Realty, et al., 294 P.3d 135 [Ariz. Ct. App. Nov. 27, 2012]). The Lerners and the Curriers agreed to both be represented by DMB Realty in the sale of the Currier home to the Lerners. The dual representation agreement identified DMB's conflict in representing both parties but did not relieve DMB of the obligation to disclose adverse material facts that would affect the consideration to be paid for the property. It also included a statement providing the consent of the parties that the broker is not obligated to disclose if a property is in the vicinity of a sex offender (pursuant to

ARS 32-2156)

Title 33, Chapter 9, Article 1, 2, 3, 4, Condominiums

ARS 33-1201 thru 1270

The definition of a condominium is found under

ARS 33-1202:

Over the years, there have been many associations that have tried to ban U.S. flags, real estate signs, and solar devices. The Arizona legislature has taken a sweeping stand on all.

ARS 33-1808, regardless of the association's governing documents, allows the display of the U.S. flag and a host of others, in either the front or back areas of a member's property with reasonable placement regulations by the association. This section also covers political signs. ARS 33-1808 further states that, regardless of the association's governing documents, an association shall not prohibit the use of cautionary signs regarding children who are engaged in recreational activities on residential roadways of the association, or For Sale, For Rent, or For Lease signs by an association member on that member's property. The sign must be commercial grade, not exceeding 18 by 24 inches, and may include a sign rider no larger than 6 by 24 inches. The association shall not require the use of particular signs for an open house or sale, nor may they regulate temporary open house signs. Open house hours may be limited to 8:00 am to 6:00 pm, and open house signs may be restricted from the association's property.

The beneficiary deed is explained in

ARS 33-404:

The Arizona statutes that govern the mortgage process are

ARS 33-701-730. It should be noted that any lien, junior or inferior, to the mortgage will be wiped out.

The statutes describing the legal process of a deed of trust in Arizona are

ARS 33-801 through 33-821. ARS 33-814(D) states the following:

A. In deeds of trust the legal description of trust property shall be given by one of the following methods: 1. By the use of lot, block, tract or parcel as set forth within a recorded subdivision plat. 2. By the use of a metes and bounds or course and distance survey. 3. By the use of the governmental rectangular survey system with specific identification of the location within any section or sections, tract or tracts, of a township and range.

ARS 33-802, as it relates to deeds of trust, states:

_________________says that any person who owns both the manufactured home and the land on which the manufactured home is located may file an affidavit of affixture with the recorder of the county in which the real property is located

ARS 42-15203

Arizona tax lien sales

ARS 42-18112 states that in Arizona, tax lien sales are held in February each year. The first half of the property tax bill is due in October of the tax year, and is delinquent in November. The second half of the annual tax bill is not due until March of the next year, and is delinquent in May of the following year. On September 1 of every year, the county assessor must send a delinquent notice to all property owners who have not paid their taxes for the previous year, and a notice will be sent again to the property owner before the sale. The county must then publish and post the delinquencies. Property taxes that are delinquent at the end of December are added to any previously uncollected taxes on a parcel for the tax lien sale. The tax certificate auction must take place during the month of February. (Note: Tax certificates and the auction of them are governed by Title 42, Chapter 18 of the Arizona Revised Statutes.) The counties handle their bidding in different ways: online bidding only, live auction, or over-the-counter tax sales. In the event the property owner does not redeem the tax lien certificate within three years of the purchase of the tax lien certificate, the investor has the right to foreclose the tax lien certificate by filing a judicial foreclosure lawsuit. The winning bidder at the sale gets ownership of the tax lien and, along with it, the right to collect the tax debt, plus interest. If no one buys the lien, the county transfers the lien to the state, and after five years, if there is no redemption, Arizona will acquire title to the property.

defines surface water

ARS 45-101

Planning and Zoning

ARS 9-461.05 Each planning agency shall prepare and the governing body of each municipality shall adopt a comprehensive, long-range general plan for the development of the municipality. Each municipality, city, town, and county implements setbacks, buffer zones, zoning, and open space requirements. They also keep records of variances and non-conforming use properties. Development requirements by the reviewers may include a conservation easement or height restrictions. A conservation easement is a restriction that limits the future use of a property to preservation, conservation, or wildlife habitat. Height restrictions are usually in place by the developer or the municipality's planning department, in lieu of a view easement, which is used by other states. A view easement is a document recorded against Property X in favor of adjacent Property Z, where the owner of Property X agrees no buildings or vegetation on X will exceed a certain height. This preserves Z's view. The developer may wish to deed the streets to the municipality and would do so by a dedication deed to the grantee. A dedication deed is an appropriation of land to some public use, made by the owner, and accepted for such use by or on behalf of the public. The deed would state who is responsible for maintenance and care.

Tenancy in common is also found under

ARS-431.

mete , bound

A_________ is the line, and the __________ is the area within which describes a parcel of land.

UNIT 29 PRACTICE ACTIVITY voluntary association, incorporation

A_____________ is one in which the original association has been dissolved or the entity's__________ paperwork has lapsed.

voluntary association

A________________ may only assess those who are voluntary members.

Abandonment of the Premises, according to ARS 33-1370 is as follows:

Abandonment Definition: 1) Rent outstanding for 5 days, personal belongings gone and tenant gone for five days without notice to landlord 2) Rent outstanding for 10 days, personal belongings still on the property, and tenant gone for at least 7 days without notice to landlord. Landlord shall post a notice for five days and mail certified mail, returned receipt requested, to last known address and any alternative address known to landlord. Security deposit is deemed forfeited and landlord shall apply to accrued rent and other damages. Landlord must use reasonable care and store personal belongings for 14 days (either on or off the premises) unless has a provision in lease that permits disposal without storage if landlord reasonably determines cost to move, store, and sell is less than the value. Landlord must notify the tenant of where the belongings are stored and the cost to recover. This must be sent certified mail, return receipt requested, to last known address and any alternative address. At the landlord's discretion, the tenant's abandoned animals may be immediately removed and released to a shelter or boarding facility. The landlord shall keep a record of the name and location of the shelter or boarding facility to which the animal was released to a shelter or boarding facility, the landlord shall provide reasonable care for the abandoned animals for 14 days. If the landlord is unable or unwilling to provide reasonable care to the abandoned animals, the landlord shall notify the county enforcement agent or an animal control officer. Tenant has right to recover if pays costs to move and store. Exempt list of possessions not requiring tenant to pay: clothing, tools, apparatus and books and tools of trade, identification, financial, immigration, public assistance, medical. Tenant does not have to pay anything to recover these items. Landlord shall keep adequate records for 12 months and hold excess proceeds if returned as undeliverable. Must forward to the state after 12 months.

Acceleration clause

Acceleration clauses, which state that the lender can demand full payment at any time under specific conditions, are legal in Arizona and may be included in any promissory note. An example of an acceleration clause is the condition that if the borrower misses one payment, then the entire amount of the loan is due immediately, in a mortgage. In a deed of trust, there is an acceleration clause, but it is statutorily stayed for the 90 day reinstatement period. If the loan is reinstated by the trustor, the beneficiary and the trustee cancel the trustee sale. "The notice of cancellation must also contain a statement that the acceleration of the debt has been withdrawn." ANDRA R MILLER DESIGNS LLC, Plaintiff/Appellee, v. US BANK NA, et al., Defendants/Appellants No. 1 CA-CV 16-0723 FILED 2-13-2018

According to _________________Any real estate company must have both 1) a licensed employing broker (company); and 2) a licensed designated broker (human) to carry out the duties of the brokerage firm.

According to ARS 32-2101.21:

Phoenix Pinal Santa Cruz Tucson Prescott

Active Management Areas are these five:

The property can be readily treated for ants, but mold would be an issue requiring a great deal more time for remediation and present further health issues for the tenant. During the tenant's occupancy, the occupancy application continues to be the basis of good faith between the landlord and the tenant. The most common material falsification breaches of the lease include these:

Additional occupant(s) Pet(s)

Can a seller choose to cancel the agreement? An Arizona contract puts the buyer into an equitable interest position, while the seller holds legal title. Should the seller decide not to sell, the buyer has two options:

Agree to the cancellation as long with a request the seller return the earnest deposit and any out-of-pocket monies the buyer has spent. Sue for specific performance, which is also known as "equitable remedy." The filing of a lis pendens will give constructive notice that the ownership of the property is in dispute.

Foreclosures and Forfeitures (cont.) Deficiency Judgments When a lender does not receive the entire amount of the monies owed them through sale or foreclosure, they will require a borrower to sign a deficiency payment agreement. ARS 33-814 addresses the deficiency judgment issue under deeds of trust. Nonrecourse states for residential mortgages These states have different nonrecourse statutes whereby, under certain circumstances, the lender may take only the collateral used to secure the loan. In most cases, it's the house.

Alaska Arizona California Hawaii Minnesota Montana Nevada (for most residential mortgages initiated from October 2009 onward) North Carolina

ARS 32-2151.01(D) states:

All licensees shall promptly place all cash, checks or other items of value received as payment in connection with a real estate transaction in the care of the designated broker.

Note: Licensees who pay a finder's fee in violation of the statute may have their licenses suspended or revoked, as well as be liable for a civil penalty. ARS 32-2173 also gives direction to the property management firm as to what to do at the termination of the agreement.

All originals or other copies of all rental agreements or related documents in the property management firm's possession for current and previous tenants. These documents shall include any applications, property inventories, leases, pet permits, default notices, lease amendments or addenda in the property management firm's possession. The broker is not required to keep copies of residential rental lease agreements or related rental lease documents after termination of the property management agreement. All building plans, environmental studies, conditions, covenants and restrictions, inspection reports, contracts, keys, warranties, personal property or other documents in the possession of the property management firm.

Other requirements or provisions of the statute are as follows:

All owner's monies must be kept in the broker's trust account or in the owner's bank account. Accounts may be interest-bearing; interest must be designated to either the broker or the owner. The designated broker may delegate a licensed or unlicensed person to make deposits and withdrawals, or be a signatory on the account. If an unlicensed person, the person must be in the direct employ of the broker, a W-2 employee. The unlicensed person can also be an officer or member of the property management firm. The broker may require two signatures on checks or may use a stamp (facsimile). Monies received that are undisputed must be deposited within 3 business days. Rental agreements must indicate where the tenant deposits are being held.

Property Management (cont.) Final Accounting at Termination At the termination, cancellation, or expiration of the agreement, the property management firm shall provide the owner with a final accounting of the property's financial status that includes at least the following:

All tenant securities (within 5 days of the end of the agreement) Reimbursement for all monies in accounts (within 35 days) Final accounts receivable and payable lists (within 75 days) A final bank reconciliation (within 75 days)

Contract Assignability

An assignment transfers rights but not liability. ARS 47-2210(E) states that contracts in Arizona are assignable unless there is verbiage in the agreement that restricts assignments, such as those you will find in property management agreements: An assignment of "the contract" or of "all my rights under the contract" or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances... indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract.

Delegated Broker

An associate broker or salesperson that may do all broker duties, except hire or fire, in absence of the designated broker for periods more than 24 hours and less than 30 days.

R4-28-1103 Broker Supervision and Control states the following:

An employing broker and a designated broker shall exercise reasonable supervision and control over the activities of brokers, salespersons, and others in the employ of the broker. Reasonable supervision and control includes the establishment and enforcement of written policies, procedures, and systems to: Review and manage:Transactions requiring a salesperson's or broker's license; and Use of disclosure forms and contracts and, if a real estate broker, real estate employment agreements under ARS 32-2151.02; Manage:Filing, storing, and maintaining documents pertaining to transactions under subsection (A)(5)(a);Handling of trust funds; and Use of unlicensed assistants by a salesperson or broker; Oversee delegation of authority to others to act on behalf of the broker; Familiarize salespersons and associate brokers with the requirements of federal, state, and local laws relating to the practice of real estate, or the sale of cemetery property or membership camping contracts; and Review and inspect:Documents that may have a material effect upon the rights or obligations of a party to a transaction; and Advertising and marketing by the broker and by salespersons, brokers, and others in the broker's employ. A designated broker shall establish a system for monitoring compliance with statutes, rules, and the employing broker's policies, procedures, and systems. A designated broker shall supervise associate brokers, salespersons, and employees of the employing broker and shall exercise reasonable supervision and control over activities by the employing broker for which a license is required. An employing broker is responsible for the acts of all associate brokers, salespersons, and other employees acting within the scope of their employment. A designated broker may use the services of employees to assist in administering the provisions of this Section but shall not relinquish overall responsibility for supervision and control of the acts of the employing broker's employees. A designated broker who, upon learning of a violation of real estate statutes or rules by a salesperson or associate broker under the broker's supervision, immediately reports the violation to the Department is not subject to disciplinary action by the Department for failure to supervise the salesperson or broker. If an employing broker maintains one office and employs a designated broker, no more than one other licensed person, and no more than one unlicensed person, the employing broker and designated broker are not required to develop and maintain written policies, procedures, and systems as described in subsection (A).

Property owners have certain rights to withdraw groundwater as permitted by the Groundwater Code, but in Arizona, property owners do not "own" the groundwater beneath their property. The Arizona Supreme Court stated in Town of Chino Valley vs City of Prescott that in the absolute sense, there can be no ownership in seeping and percolating waters until they are reduced to actual possession and control by the person claiming them because of their migratory character. Like wild animals free to roam as they please, they are the property of no one.

An explanation about withdrawing groundwater in Arizona by the Arizona Department of Water Resources:

An implied contract is inferred when an express contract is absent and the behavior of the parties implies an agreement. Because implied contracts are legal in Arizona, but difficult to understand, we use this court statement about an implied contract:

An implied contract is one not created or evidenced by explicit agreement, but inferred by the law as a matter of reason and justice from the acts and conduct of the parties and circumstances surrounding their transaction. Alexander v. O'Neil, 77 Ariz. 91, 98, 267 P.2d 730, 734 (1954)

Examples of tenant remedies when the landlord fails to fully disclose important, latent facts to the tenant include the following:

An issue could be mold. If the tenant moves in and discovers the landlord's property has mold and the mold is affecting the health of the tenant, the tenant may, under ARS 33-1361, issue a five-day notice to the landlord to remedy or the tenant may terminate the lease at the end of the five days. Health and safety. Usually noncurable. If the landlord fails to disclose that the property has an infestation of ants, the tenant would issue a 10-day notice for the landlord to remedy the situation or the lease would terminate in 10 days. Curable.

Sole Proprietor

An unincorporated business owned and operated by an individual who is liable for all actions by agents in the firm. Such an entity requires a separate license from the owner who acts as its broker.

While licensees owe fiduciary duties only to their clients, they also owe duties to the other parties in the transaction, including the duty to disclose material facts. According to R4-28-1101, licensees are obligated to disclose these items in writing to all other parties:

Any information that materially and adversely affects the consideration to be paid by any party to the transaction That the seller/lessor is, or may be, unable to perform That the buyer/lessee is, or may be, unable to perform Any material defect existing in the property being transferred The possible existence of a lien or encumbrance on the property being transferred That the broker/licensee is the principal or has a financial or beneficial interest in the property That the broker/licensee is related to one of the principals That the broker/licensee has a conflict of interest

Definitions and Statutes (cont.) Who will be affected by the adjudication?

Any person or entity who uses water or has made a claim to use water, on property within the Gila River system or within the Little Colorado River system, may potentially be affected. The Legislature has charged the Arizona Superior Court with determining, quantifying, and prioritizing water rights claimed in these watersheds. The final decrees will establish the existence and ownership of claimed water rights as well as important attributes of the water rights including location of diversions, water uses, quantity of water used, and date of priority of water rights.

Question #8 of 10 Question ID: 1150275 Any sale of subdivided land, which is without permanent access, A) is guaranteed by the developer. B) is rescindable by the purchaser. C) must receive an easement before completion of the transaction. D) will be given title insurance to insure access.

B) is rescindable by the purchaser.

The "handyman exemption" enables persons other than licensed contractors to perform tasks for which the aggregate contract price is less than $1,000, but there are many specifics to the statute in order for the exemption to apply to the owner.

Any person other than a licensed contractor engaging in any work or operation on one undertaking or project by one or more contracts, for which the aggregate contract price, including labor, materials and all other items... is less than one thousand dollars. Even if the work totals less than $1,000, unless it is "of a casual or minor nature," it must be performed by a licensed contractor. Allows an owner of real property, with their own employees or with duly licensed contractors, to build or improve the property themselves without being licensed with the Arizona Registrar of Contractors, providing the property is not intended to be placed for sale or for rent. To qualify for this exemption, the licensed contractors' names and license numbers must be included in all sales documents.

The conflict involved in dual agency—and the need for its disclosure—might be easier to understand when brokers handle business themselves without the use of sales associates because the broker is privy to information directly from buyers and seller. However, it is sometimes difficult for sales associates to understand this. While the representation or listing agreement technically belongs to the employing broker, it is the sales associate who maintains the relationship with the buyer or the seller. The broker is a dual agent because the buyer and the seller in the same transaction are both clients, but the sales associate feels like a single agent because he's working with one of the parties while another sales associate of the employing broker is working with the other. Here are some common arguments from sales associates in this situation and explanations that justify the broker's position as dual agent:

Argument: My broker does not even know my client (the seller). Explanation: It doesn't matter. The sales associate takes listings in the name of the employing broker, not in the sales associate's own name, so the client is a client of the employing broker. Argument: I'm an independent contractor. Explanation: It doesn't matter. Regardless if the sales associate is an employee of the employing broker or an independent contractor, the sales associate takes listings in the name of the employing broker and under Arizona law is managed and supervised by the designated broker. Argument: I don't even know the sales associate in the other office who is representing the buyer. Explanation: It doesn't matter. The sales associate takes listings in the name of the employing broker. Under Arizona law, if the sales associates are under the same employing broker with the same designated broker, the sales associates are representing that employing broker and are dual agents who must disclose that they are dual agents.

Employing Broker Non-natural person (brokerage firm) Example

Arizona Blue Sky Realty is an employing broker operating as a partnership by John Doe and his sister Jane Doe. The entity license is in the name of Arizona Blue Sky Realty, and Jane is the designated broker. There are 10 people working for Arizona Blue Sky Realty (sales associates, broker associates, and unlicensed assistants).

The following is a standard disclaimer on E&O policies regarding E&O claims payouts in Arizona:

Arizona Notice: Misrepresentations, omissions, concealment of facts and incorrect statements shall prevent recovery under the policy only if the misrepresentations, omissions, concealment of facts or incorrect statements are; fraudulent or material either to the acceptance of the risk, or to the hazard assumed by the insurer or the insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise. Brokers and/or salespersons may wish to obtain an umbrella insurance policy in order to protect assets and future earnings even with an E&O policy.

All individuals or business entities intending to engage in construction work in Arizona must obtain a state-issued contractor license through the

Arizona Registrar of Contractors.

Commercial Foreclosures

Arizona anti-deficiency statutes do not apply to commercial loans. All commercial loans are recourse loans. A deficiency judgment is to be expected along with the foreclosure. The foreclosure process is the same for commercial and residential whether using a mortgage or a deed of trust. The decision is either to allow the deed of trust to be foreclosed on by nonjudicial means or by judicial means. If a mortgage, the foreclosure process will be a judicial one. Because there are usually rents to be collected, it is possible to request the appointment of a receiver or to direct tenants to have all payments sent directly to the lender and it can be done in either a judicial or a nonjudicial foreclosure.

doctrine of prior appropriation of surface water, which stated that water rights were attached to the land as appurtenances.

Arizona became a territory in 1863 and the territorial legislature's first act was to adopt the Howell Code in 1864. The Howell Code, in addition to establishing the boundaries of the state, also established the

Can a buyer choose to cancel the agreement? More information is available at the Arizona REALTORS® site: https://www.aaronline.com

Arizona contracts generally have numerous contingencies, such as an inspection period, receipt of documents to review, additional disclosure information, appraisal, or loan approval contingencies. All of these are times for the buyers to carefully review their interest in the property because they are legal contract escapes. Should the buyer choose to walk away in deference to the conditions of the agreement, the seller may keep the earnest deposit. Most contracts limit the seller to the earnest deposit as damages.

Question #8 of 15 Question ID: 1150245 If you are in one of these AMAs (Phoenix, Pinal, or Tucson) and your subdivision was built after February 1995, you will be billed through your _______________a water charge in order to replenish the aquifers. A) gas bill B) property tax bill C) annual special assessment D) water bill

B) property tax bill

Community Property

Arizona is a community property state; married couples who wish to keep their property separate may find it difficult to do so. Any property purchased during a marriage will be considered property of both, unless one has signed a disclaimer deed, which will waive that spouse's rights to the purchased property. A disclaimer deed may also be known as a quitclaim deed. Under Arizona community property laws, both spouses must sign the purchase contract if neither intends to sign a disclaimer deed, because they both have an equal interest in the property if the property was bought during their marriage. If there is a divorce in process, court approval may be required for purchases of property by one or both parties. When individuals have taken title as community property, the property cannot be conveyed by only one member of "the community."

Title theory vs. lien theory

Arizona is a title theory state, meaning the property title remains "in trust" until the loan is fully paid. The title is put into the hands of a trustee when a deed of trust is used. The trustee holds the "naked title" and the "power of sale" for the beneficiary and will only execute a sale if so instructed by the beneficiary. In a lien theory state, the loan is a lien against the property and requires a court or judicial foreclosure. Some would argue that Arizona is a lien theory state because there are judicial foreclosures; but most lenders choose the deed of trust versus the mortgage due to the statutory and limiting 90-day period for the trustor to reinstate the loan or the foreclosure is final.

Irrigation ditches 1

Arizona is divided into nine planning areas. The Central Highlands Planning Area may be considered atlas number 5 and is a combination of five groundwater basins. According to the 2000 census, there were 88,000 residents in the Verde River Basin, which includes the Big Chino, Verde Valley, and Verde Canyons basins. The Big Chino sub-basin covers an area of approximately 1,850 miles and runs from Seligman to Paulden. The Verde Valley sub-basin is the largest of the three and is approximately 2,500 miles, including Sedona and the river towns of Clarkdale, Cottonwood, and Camp Verde. The Verde Canyon sub-basin includes Strawberry, Pine, and Payson.

Notices (cont.) Types of Notices

As its name suggests, the five-day non-pay (or five-day pay or quit) notice informs the tenants that they have five days to remit overdue rent, or leave the premises. This notice must be specific enough for the tenant to determine the full, exact amount owed so that they have the opportunity to cure the default, as stated in ARS 33-1368(B). A 10-day breach notice is curable. It can be issued for complaints of noise, smells, debris, parking, unauthorized occupants, unauthorized pets, etc., as outlined in ARS 33-1368(A). A five-day health and safety notice is issued for any act that threatens the health or safety of the tenant, other tenants, guests or the property, as detailed in ARS 33-1368(A). This includes acts of violence, including shooting, stabbing, drugs, threatening and intimidating, gang activity, imminent harm to others or property, or nuisance, as defined in ARS 12-991.

10

As of 2019, _____ Arizona tribes have come to an agreement and seven have appointed negotiation teams. The area of these adjudications covers more than half the State of Arizona. You can learn more about general stream adjudications at http://www.superiorcourt.maricopa.gov/SuperiorCourt/GeneralStreamAdjudication/Index.asp.

Question #11 of 15 Question ID: 1150263 A "shared well" is determined by ADEQ to be a community water system if there are more than ____ or more service connections, or serve _____ or more residents. A) 20, 35 B) 15, 25 C) 12, 30 D) 25, 50

B) 15, 25

Question #6 of 10 Question ID: 1250783 An unimproved subdivided lot that has been inspected by the buyer has a rescission period of A) 7 business days. B) 7 calendar days. C) 10 calendar days. D) 6 months.

B) 7 calendar days.

Question #10 of 10 Question ID: 1250770 The foreclosure process in a deed of trust is different from that in a mortgage or a contract for deed. Which of the following is TRUE of a deed of trust foreclosure process? A) The "bare naked title" is in the hands of the trustee. B) Because the foreclosure is a nonjudicial action, the event starts with a default letter to the trustor and a 90-day redemption period. C) If the trustor has not brought the loan current within the 90 days before the trustee sale is held, the deed goes to the highest bidder. D) Beneficiary notifies the trustee to exercise the power of sale.

B) Because the foreclosure is a nonjudicial action, the event starts with a default letter to the trustor and a 90-day redemption period.

Question #1 of 10 Question ID: 1150206 Cassie notified the landlord in writing that the dryer had stopped "heating" and only unheated air was drying her clothes. After 10 days the dryer remained unfixed. Cassie was paying $1,500/month rent. The electrician said the repair would be $500. What is the BEST and most complete solution for this problem? A) Cassie can hire the electrician and ask the landlord for reimbursement. B) Cassie can have the electrical contractor fix the dryer, give her a lien waiver, and deduct the $500 from her next rent payment. C) Cassie can hire the electrical contractor to fix the dryer and deduct it from her next rent payment. D) Cassie must have the permission of the landlord to have the dryer fixed.

B) Cassie can have the electrical contractor fix the dryer, give her a lien waiver, and deduct the $500 from her next rent payment.

Question #7 of 15 Question ID: 1150252 Which waste system is NOT an approved Arizona waste disposal system? A) Wisconsin mound B) Cesspool C) Constructed wetland D) Aerobic

B) Cesspool

Question #4 of 10 Question ID: 1150105 Arizona property tax rates are highest in which category? A) Land B) Commercial C) Residential D) Residential rentals

B) Commercial

Question #6 of 10 Question ID: 1150127 What kind of financing instrument was used if the foreclosure includes a notice of default, no acceleration clause, and a reinstatement period, and the high bidder at the trustee sale gets the property? A) Owner carry B) Deed of trust C) Mortgage D) Installment loan

B) Deed of trust

Question #14 of 15 Question ID: 1150258 Wildlife in Arizona can be an environmental issue for some people, especially those with pets. Disclosure is required. Which of the following would NOT be harmful to pets? A) Javelina B) Deer C) Coyotes D) Snakes

B) Deer

Question #2 of 10 Question ID: 1150102 Which of these does NOT describe a beneficiary deed? A) Can be withdrawn B) Does not need to be recorded C) Less expensive than establishing a life estate D) No probate

B) Does not need to be recorded

Question #11 of 11 Question ID: 1150068 Which of the following is NOT a required duty of a designated broker under the Commissioner's rules? A) Manage and supervise licensees B) Hold office meetings C) Create office policies D) Approve licensee advertising

B) Hold office meetings

Question #7 of 10 Question ID: 1150292 A developer's contract must state three of the following items. Which statement is FALSE or inaccurate? A) It must tell the buyer to read the public report (if there is one). B) It must state there is no rescission period. C) It must indicate if the earnest deposit is being put into escrow or in the broker's general account. D) It must indicate who holds the earnest deposit.

B) It must state there is no rescission period.

uestion #6 of 10 Question ID: 1250777 Ken and Barbie are renting from Rent Forever Rentals. They have been on a two-year lease, which expires March 31, with the understanding they can stay month to month. Which of the following statements is NOT true? A) Ken and Barbie must give a 30-day notice. B) Ken and Barbie can give notice on July 2 to leave on July 31. C) Ken and Barbie can ask to be at the move-out inspection. D) Ken and Barbie can give notice on June 10 to leave July 31.

B) Ken and Barbie can give notice on July 2 to leave on July 31.

Question #1 of 7 Question ID: 1150088 Kerry's buyer was within the 10-day inspection period, doing due diligence. The buyer was unhappy with the inspection report and wanted to cancel the transaction. Kerry asked the buyer if Kerry could personally pay for some of the issues, because the seller had refused to do so, and let the transaction continue. If the buyer agrees, what disclosures are necessary in this situation? A) None. Because the buyer agrees to this, no other parties need to be notified. B) Kerry's financial input must be disclosed to all parties. C) Kerry must disclose this to the Department of Real Estate. D) Kerry must disclose this to his employing broker and to his client only.

B) Kerry's financial input must be disclosed to all parties.

Question #6 of 7 Question ID: 1150084 In a transaction, Larry was the listing agent and also the buyer's representative, making him a dual agent who would use a limited representation form to ensure that he did not put one party's interest above the other. The seller told Larry that she did not want Larry to tell the buyer about the issues they had encountered with the neighbor and the trees along the property line because it might not matter to this buyer. Would this be a disclosable item for Larry to the buyer? A) Larry may suggest the seller have it on the disclosure form B) Larry represents both parties and owes the disclosure to the buyer C) Larry is not required to make these kinds of disclosure no matter who he is representing D) Larry must follow his seller's instructions

B) Larry represents both parties and owes the disclosure to the buyer

Question #9 of 13 Question ID: 1250773 Which of the following statements is inaccurate or FALSE? A) Licensees must give the clients a copy of all documents signed by the clients as soon as possible. B) Licensees do not have to submit oral offers. C) Licensees must present all offers to their seller client until close of escrow unless they are relieved of the duty in writing by the seller. D) Licensees may not disclose the terms and conditions of another licensee's offer to others without first getting permission in writing from the client.

B) Licensees do not have to submit oral offers.

Question #10 of 10 Question ID: 1150215 If a tenant abandons the property and leaves a pet, which one action of the following may the landlord NOT take? A) May call the animal control officer B) May keep the animal C) May take the animal to a shelter D) May care for the animal for 14 day

B) May keep the animal

Question #2 of 11 Question ID: 1150008 Which of these statements is NOT accurate when applying for an Arizona broker's license? A) Must have statements from previous brokers to verify being a licensed agent for three of the last five years B) Must have completed a contract-writing course C) Must have attended three 3-hour broker management clinic classes D) Must have a certified work history from state licensing entity to verify licensed activity in another state

B) Must have completed a contract-writing course

Question #10 of 13 Question ID: 1150152 All of the following must be disclosed in an Arizona real estate transaction EXCEPT A) damage to the property that occurs during escrow. B) the family had a home invasion and were held at gunpoint several months before listing their house. C) the fact that the property was the site of a meth lab. D) latent material issues that could affect the consideration paid by the buyer.

B) the family had a home invasion and were held at gunpoint several months before listing their house.

Question #6 of 7 Question ID: 1150090 Jennifer was representing a buyer in making an offer on an improved property. As the property moved toward closing, the buyer asked Jennifer if she would do the final walk-through for him, because he would not be coming in until the day after closing. Jennifer told the buyer that she was not allowed, by her company's office policies, to do the final walk-through unless the buyer was in attendance. Is this a breach of fiduciary? A) Yes. It's lawful and she must be obedient. B) No. While lawful, it is against her broker's policy and she is a representative of the employing broker. C) No. It was not a duty outlined in the buyer broker agreement. D) Yes. It's helpful to the buyer.

B) No. While lawful, it is against her broker's policy and she is a representative of the employing broker.

Question #9 of 15 Question ID: 1150239 The Arizona Department of Water Resources does NOT enforce which of the following? A) Develops policies that promote conservation and equitable distribution of water B) Oversees the Clean Water Act C) Conducts statewide water resource planning D) Oversees the use of surface and groundwater resources under state jurisdiction

B) Oversees the Clean Water Act

Question #3 of 10 Question ID: 1150193 Not all rental properties are subject to the Arizona landlord-tenant laws. Which of these falls under the ARLTA? A) Life estate B) Rentals 30 days or more C) Holder of a proprietary lease D) Vacation rentals 29 days or less

B) Rentals 30 days or more

Question #4 of 10 Question ID: 1150290 Which of these types of real estate may NOT have drawings as promotions? A) Time-share B) Residential real estate C) Subdividers D) Membership campgrounds

B) Residential real estate

Question #5 of 10 Question ID: 1150290 Which of these types of real estate may NOT have drawings as promotions? A) Subdividers B) Residential real estate C) Membership campgrounds D) Time-share

B) Residential real estate

Question #7 of 10 Question ID: 1150289 Section 28 is in what quadrant of a township? A) NW B) SW C) NE D) SE

B) SW

Question #7 of 10 Question ID: 1150211 Sandor listed, as a vacation rental, a condominium in Sedona with two bedrooms and two baths. A call came from a prospective tenant for two months during the winter. Which of the following statements about this transaction is inaccurate? A) Sandor must follow reasonable accommodation requests if applicable. B) Sandor's property does not have to apply ARLTA statutes. C) Sandor may refuse a group of five people under occupancy standards. D) Sandor must follow ARLTA for a two-month rental.

B) Sandor's property does not have to apply ARLTA statutes.

Question #11 of 13 Question ID: 1150141 Three of these statements are issues where a buyer or a seller may not be able to close the transaction and Arizona licensees have the responsibility to disclose to the other side of the transaction any possibility the client may have to or want to cancel. Which of these statements is NOT a legal reason? A) Buyer is unable to secure a loan B) Seller decides not to sell at the last minute C) Seller has a judgment filed against the property during escrow D) Property appraisal comes in low and the seller won't negotiate a lower purchase price

B) Seller decides not to sell at the last minute

Question #7 of 11 Question ID: 1150040 Advertising as a licensed sales associate in Arizona comes with requirements from the Department. Which one of these statements is inaccurate or false? A) The name of the team may not be such that it gives the impression it is not part of the brokerage. B) The employing broker's name must be on text messages. C) The name of the employing broker must be on each page of a website and must be seen without scrolling down on any device. D) The name of the employing broker must be on an agent's Facebook page if the licensee discusses real estate.

B) The employing broker's name must be on text messages.

Question #8 of 10 Question ID: 1150212 Three of the following statements about granting a writ of restitution are accurate. Which one is NOT accurate? A) To reclaim the personal property, the tenant must pay the landlord only for the cost of removal and storage for the time the property is held by the landlord. B) The landlord must hold the tenant's property until the tenant has paid all monies owed for the storage of all the tenant's belongings left behind. C) The landlord may hold the property for 14 days and, if held at the property, may have the locks changed. D) The landlord must prepare an inventory and promptly notify the tenant of the location and cost of storage of the personal property by sending a notice by certified mail, return receipt requested, addressed to the tenant's last known address and to any of the tenant's alternative addresses known to the landlord

B) The landlord must hold the tenant's property until the tenant has paid all monies owed for the storage of all the tenant's belongings left behind.

Question #9 of 10 Question ID: 1150205 On January 3 the landlord gets a call from a neighbor that the tenant moved out the night of January 2. Rent has not been paid. The landlord has already sent a five-day pay or quit notice. What does the landlord do next? A) The landlord must post a notice on the front door. B) The landlord should give tenant a 48-hour notice to inspect property. C) The landlord must send a notice of abandonment to the tenant. D) The landlord must determine if the tenant is on the property before doing anything else.

B) The landlord should give tenant a 48-hour notice to inspect property.

Question #3 of 10 Question ID: 1150107 Which of these is NOT true regarding a nonowner taking ownership of property through adverse possession? A) The nonowner has used the property for at least 10 years. B) The nonowner's use has been with the owner's permission. C) It might require a quiet title action. D) The nonowner's use must be open and notorious.

B) The nonowner's use has been with the owner's permission.

Question #3 of 10 Question ID: 1150272 A public disclosure report is not necessary under certain circumstances. Which of the following is NOT an exemption? A) The sale or lease of parcels, lots, units, or spaces that are zoned and restricted to commercial or industrial uses B) The sale or lease of 36 acres or less C) The sale or lease in bulk of six or more lots, parcels, or fractional interests to one buyer in one transaction D) The sale or lease of lots or parcels of 160 acres or more

B) The sale or lease of 36 acres or less

uestion #9 of 15 Question ID: 1150255 One of the main purposes of the Central Arizona Project was A) to move water from Lake Havasu to Pinal County. B) to allow Arizona to draw its full allocation from the Colorado River. C) to irrigate agricultural areas of the state. D) to store water.

B) to allow Arizona to draw its full allocation from the Colorado River.

Question #5 of 7 Question ID: 1150085 Arizona's Stigmatized Property Statute, ARS 32-2156, has three categories: 1) murder, suicide, death or a felony on the property; 2) HIV or AIDS; 3) in the vicinity of a sex offender. Which of the following statements is NOT accurate? A) In Lerner vs. DMB, the courts opined that the statute was constitutional. B) This statute means that no action can be brought against a seller who chooses not to disclose that there was a death on the property, when directly asked by the buyer. C) Mr. Seller died of AIDS in his master bedroom before the property was put on the market by his heirs. This statute protects the seller so long as the seller(s) do not lie (commit fraud), if asked directly. D) Sandy's seller tells her they are moving because of the sex offender who moved into a house across the street. If asked by a prospective buyer, Sandy cannot lie about the reason the seller is moving.

B) This statute means that no action can be brought against a seller who chooses not to disclose that there was a death on the property, when directly asked by the buyer.

Question #3 of 10 Question ID: 1150279 ___________ lines run parallel to the baseline, which runs east and west. ______________lines run parallel to the meridian, which runs north and south. A) Township, Correction B) Township, Range C) Range, Correction D) Range, Township

B) Township, Range

Question #5 of 15 Question ID: 1150242 Which water rights may NOT be purchased separately from the land? A) City service facilities B) Type 1 nonirrigation grandfathered rights C) Irrigation ditch rights D) Type 2 nonirrigation grandfathered rights

B) Type 1 nonirrigation grandfathered rights

Question #1 of 13 Question ID: 1150143 Property management trust accounts have certain requirements. Of the four statements below, which one is NOT a requirement? A) A W-2 employee may be a signatory on the trust account. B) Undisputed monies must be deposited immediately. C) They can be deposited in the owner's account. D) Rental agreements must indicate where the deposits are being held.

B) Undisputed monies must be deposited immediately.

Question #10 of 15 Question ID: 1150257 Which of the following ways to control the growth of mold is not recommended? A) Fix any leaks in your home's roof, walls, or plumbing B) Use a combination of ammonia and bleach to clean moldy areas C) Control moisture D) Add mold inhibitors to paints before painting

B) Use a combination of ammonia and bleach to clean moldy areas

Question #14 of 15 Question ID: 1150257 Which of the following ways to control the growth of mold is not recommended? A) Control moisture B) Use a combination of ammonia and bleach to clean moldy areas C) Fix any leaks in your home's roof, walls, or plumbing D) Add mold inhibitors to paints before painting

B) Use a combination of ammonia and bleach to clean moldy areas

Question #2 of 15 Question ID: 1150223 Who will be least affected by the Gila River and the Little Colorado River adjudication? A) Stock pond permit holder B) User of city water C) Well owner D) User of irrigation ditch water

B) User of city water

Question #7 of 10 Question ID: 1150118 Which statement is FALSE about the process of foreclosure on a land contract? A) Grace period is determined by the equity of the vendee B) Vendor does not have to record anything except the completion of forfeiture C) Vendor sends completion of forfeiture after the grace period is up and vendee has not brought the loan current D) Vendee default and vendor sends and records a notice of intent to forfeit

B) Vendor does not have to record anything except the completion of forfeiture

Question #2 of 15 Question ID: 1150247 Which of the following statements about WQARF is NOT true? A) WQARF is the Arizona cleanup fund. B) WQARF is the federal superfund cleanup program. C) WQARF falls under ADEQ. D) It is called the Water Quality Assurance Revolving Fund.

B) WQARF is the federal superfund cleanup program.

Question #8 of 13 Question ID: 1150167 An executed contract is described by three of these choices. Which of these is NOT an executed contract? A) When the lease expires B) When the lease commences C) When all the terms and conditions of the purchase agreement have been met D) When the buyer and the seller have a meeting of the minds and agree, sign, and deliver the agreement to each other

B) When the lease commences

Question #1 of 7 Question ID: 1250768 Does a buyer's agent have the duty to disclose to the seller's agent that the buyer is making a cash offer on the property, but intends to get a loan? A) No, loyalty requires the agent to work for the best interest of his client. B) Yes, licensing laws require the agent to be fair to all parties. C) No, under confidentiality, the agent is not required to disclose. D) No, obedience requires the agent to follow the buyer's instructions.

B) Yes, licensing laws require the agent to be fair to all parties.

Question #4 of 7 Question ID: 1150094 Jan acts as a buyer broker for Charlie and Kate without a buyer broker agreement. They find a house and write an offer, at which time one of the forms states that Jan represents Charlie and Kate as a buyer agent. The signing of the buyer broker disclosure at contract writing is A) illegal in Arizona. B) called ratification. C) the only way to create an agency relationship in Arizona. D) called confirmation.

B) called ratification.

Question #8 of 10 Question ID: 1250776 A special detainer A) is requested by the landlord when the tenant has abandoned the property. B) comes after the landlord's written notice that the rental agreement has been terminated and that the tenant must leave the property. C) is a notice given by the landlord to the tenant. D) is automatic if the tenant is not out on the last day of the tenancy.

B) comes after the landlord's written notice that the rental agreement has been terminated and that the tenant must leave the property.

Question #10 of 10 Question ID: 1150273 The Department may deny a public disclosure report for all of these reasons EXCEPT A) failure to provide permanent access to lots. B) failure to disclose misdemeanor. C) owner with more than 10% interest has been convicted of fraud or dishonesty in a real estate transaction. D) inability to deliver title.

B) failure to disclose misdemeanor.

Question #9 of 10 Question ID: 1150273 The Department may deny a public disclosure report for all of these reasons EXCEPT A) failure to provide permanent access to lots. B) failure to disclose misdemeanor. C) owner with more than 10% interest has been convicted of fraud or dishonesty in a real estate transaction. D) inability to deliver title.

B) failure to disclose misdemeanor.

proof of an irrevocable trust set up for the operation and maintenance of the cemetery. There must also be a trustee of a financial institution appointed to oversee the endowed care fund.

Before the certificate of authority is issued, the cemetery developer must show

remedies.

Both the landlord and the tenant have obligations. Both the landlord and the tenant have

Arizona's anti-deficiency statutes

By many in Arizona, ARS 33-814 is called "the anti-deficiency statute." It states that all purchase mortgage monies used to acquire the property are protected if the borrower's property is on 2.5 acres or less and it's used for a one- or two-family purpose. ARS 33-729(G) extended the statute to cover situations such as refinance loans. If a mortgage lender has made a non-purchase money loan to a borrower and the real property securing the loan is located on 2.5 acres or less and is "utilized" as a single one-family or a single two-family dwelling. a foreclosure or refinance loan on the property cannot be satisfied by other real property owned by the debtor, except in cases where such an arrangement was agreed to at the initial contract.

Question #5 of 13 Question ID: 1150156 Molly, the buyer's agent, submits an offer for a buyer for $500,000, all cash, 30-day close of escrow. Another buyer's agent submits an offer for his buyer for $520,000, 80/20 financing, 45-day close of escrow. The seller accepts the offer from Molly's buyer because it's cash and a quicker close. Escrow opens, inspections are done, and the buyer accepts the property but then informs Molly that he is going to finance the property and will need an extension to the close of escrow. Which of the following is NOT accurate or is false? A) Buyer and seller will have to execute an addendum to change the financing. B) Seller could deny extending the close of escrow. C) Seller has to agree to the change to financing. D) If buyer walks away because seller will not agree to the financing change, buyer will probably lose earnest deposit if buyer cannot close escrow as originally contracted.

C) Seller has to agree to the change to financing.

Question #10 of 10 Question ID: 1150208 Renee was the property manager of four condo units in the Flagstaff area. She had a property management policy about renting to people who noted felonies on their application. Which of these four statements is the best way for Renee to address the issue without going awry of fair housing requirements? A) If her policy is not to rent to felons, she should rent only to those who have not been incarcerated. B) If her policy is not to rent to felons, then don't rent to any felons. C) She should treat each felony as a case-by-case decision. D) Her policy should state how to deal with someone who indicates a felonious background.

C) She should treat each felony as a case-by-case decision.

Question #4 of 10 Question ID: 1150125 Cassie and Simon want to purchase a property together with Simon having 60% and Cassie 40%. They are married. Which of the following is the BEST decision for Cassie and Simon on how to take title? A) Joint tenants B) Community property C) Tenants in common D) Sole

C) Tenants in common

Question #9 of 15 Question ID: 1150233 The 1980 Groundwater Management Act established all but one of these. Which one was NOT established at the time of the 1980 Groundwater Act? A) The Arizona Department of Water Resources B) The 100-year assured water supply C) The Arizona Department of Environmental Quality D) Four AMAs

C) The Arizona Department of Environmental Quality

Question #10 of 11 Question ID: 1150057 A broker is advertising another employing broker's listing. Which of the following is NOT a true statement about the ad? A) The ad must include the advertising licensee's employing broker's name. B) The ad may use a logo along with the employing broker's name. C) The ad must include the designated broker's name. D) The ad must include the listing employing broker's name.

C) The ad must include the designated broker's name.

Question #4 of 10 Question ID: 1150194 Who has jurisdiction over landlord-tenant disputes? A) Arizona Department of Housing B) Arizona Attorney General's Office C) The courts D) ADRE

C) The courts

Question #4 of 15 Question ID: 1150236 Scorpions are pests in Arizona and can inflict quite a sting with their tails. There are three accurate statements about scorpions and one inaccurate one. Which is the false statement about scorpions? A) The average scorpion lives for about five years. B) Scorpions feed on spiders and other insects. C) There are only two identified species of scorpions in Arizona. D) Use of a "black light" between 8 pm and 11 pm can assist in finding scorpions.

C) There are only two identified species of scorpions in Arizona.

Question #3 of 15 Question ID: 1150242 Which water rights may NOT be purchased separately from the land? A) Irrigation ditch rights B) Type 2 nonirrigation grandfathered rights C) Type 1 nonirrigation grandfathered rights D) City service facilities

C) Type 1 nonirrigation grandfathered rights

Question #3 of 10 Question ID: 1150118 Which statement is FALSE about the process of foreclosure on a land contract? A) Vendee default and vendor sends and records a notice of intent to forfeit B) Grace period is determined by the equity of the vendee C) Vendor does not have to record anything except the completion of forfeiture D) Vendor sends completion of forfeiture after the grace period is up and vendee has not brought the loan current

C) Vendor does not have to record anything except the completion of forfeiture

Question #2 of 13 Question ID: 1150142 A property management agreement is NOT required to A) identify the frequency of status reports. B) include a cancellation clause. C) include an automatic renewal provision. D) state who receives the interest monies.

C) include an automatic renewal provision.

Question #1 of 10 Question ID: 1150104 A proprietary lease is BEST defined as A) real property. B) a five-year lease on a condo. C) personal property. D) a 99-year lease that can be bought or sold.

C) personal property.

Question #3 of 7 Question ID: 1150083 In Arizona, when a salesperson represents a buyer, that salesperson is the representative of A) the designated broker. B) the seller. C) the employing broker. D) the buyer.

C) the employing broker.

Question #7 of 15 Question ID: 1150243 Wetlands are defined by all of the following statements EXCEPT A) wetlands are sometimes referred to as riparian areas. B) "wetland" is a generic term for all the different kinds of wet habitat - implying that it is land that is wet for some period of time, but not necessarily permanently wet. C) wetlands are classified into two categories. D) wetlands are regulated by the EPA under The Clean Water Act.

C) wetlands are classified into two categories.

Question #1 of 15 Question ID: 1250778 There are certain areas of Arizona where radon is found at high levels. Which of the following is NOT a high radon area? A) Verde Valley B) Granite Dells C) Phoenix Mountains D) White Mountains

D) White Mountains

Question #2 of 3 Question ID: 1150136 A cure notice does not need to be in writing. True False

False

Contingencies

Contingencies are addressed during the executory period. Contingencies are conditions to be met in order to bind the parties to the contract. A contingency clause in a contract gives the parties a chance to back out of the contract under specific circumstances. Common contract contingencies are based on homeowners' association rules and regulations, inspections, loan approvals, and property appraisals. The loan contingency can be a great disappointment to buyers and sellers when, after much time and effort, a loan is not possible. In rare cases, the seller will offer to carry the loan for the buyer; but, if not possible, the buyer can terminate the contract. If the appraisal comes in lower than the purchase price, it is possible to negotiate a lower purchase price, increase the amount of cash from the buyer, or a combination of both; otherwise, the contract can be terminated by the buyer. Appraisals consider much about the property. The principle of change asserts that all markets are in a continual state of change. According to this principle, properties generally go through three stages: integration (development), equilibrium (stasis), and disintegration (decline). The principle of externalities states that factors external to the property can affect the value of a property, either positively or negatively. These external factors can range from local matters to regional, national, and international considerations. Directional growth of the city will affect the appraisal, as will the orientation of the house on the lot. A house facing west may incur higher cooling bills and exterior maintenance. The appraiser will note unearned increments, such as the market value increase due to supply and demand, as well as the earned increments, such as a newly remodeled kitchen. As to excess land, a real estate appraiser is required to describe it in the appraisal but will not assess its value independent from the subject property. Ultimately, the only real difference is that excess land has the potential to be subdivided and sold, while surplus land does not. The price per square foot of a house on one-fourth of an acre would be the same as a house on three-fourths of an acre. Using the cost method of appraising, the appraiser will only give value to the insurable portion of the property—that which is covered by an insurance policy (insured property minus the land).

Contract Termination Principals generally enter into purchase agreements in good faith but might be prevented from concluding the sale because conditions of the sale have not been met or are unable to be met. For different reasons a contract may be terminated:

Contingency choice Lack of performance Disclosure information Change in disclosure information Inspection issues Destruction of property Breach of contract Inability to secure financing Rescission

The only requirement by the Department regarding digital files is that they can be reconstructed into paper files for auditing by the Department. Otherwise, these are the specifics:

Copies of earnest money deposits Closing statements indicating the disbursement of the monies Sales contracts, addenda, and escrow instructions, if any Copy of employment agreements (listing and/or buyer agent) Licensee and employee agreements

Question #3 of 13 Question ID: 1250774 The rescission period for a time-share contract is A) 7 business days. B) 10 business days. C) 7 calendar days. D) 10 calendar days.

D) 10 calendar days.

Question #5 of 10 Question ID: 1150109 How long does a seller in a condo association have to get the statutory documents to the buyer in a real estate transaction? A) 14 days B) 5 days C) 7 days D) 10 days

D) 10 days

Question #6 of 13 Question ID: 1150168 All purchase offers must be presented to the seller. Of these statements, which one is inaccurate? A) All offers must be presented to the seller until expiration or cancellation of the listing agreement. B) Verbal offers must be presented to the seller. C) Offers must be presented to the seller until close of escrow. D) A buyer's agent can present an offer directly to a seller instead of to the seller's agent.

D) A buyer's agent can present an offer directly to a seller instead of to the seller's agent.

Question #5 of 11 Question ID: 1150066 A broker receives monies from a client as an earnest deposit on a potential transaction to put into the broker's trust account. Which of the following statements is NOT true? A) Information about the transaction must be noted. B) The amount of money must be noted in the ledger. C) The name of the individual for whom the broker is holding the monies must be stated. D) A period of time for holding of the monies must be stated.

D) A period of time for holding of the monies must be stated.

Question #1 of 10 Question ID: 1150281 Three of these are characteristics of a section and one is not. Which is NOT a characteristic of a section? A) Most every section is contiguous to eight other sections. B) A section is 1/36 of a township. C) A section is 1 square mile. D) A section has two quadrants.

D) A section has two quadrants.

Question #3 of 11 Question ID: 1250767 Which of the following is NOT an unlawful license activity? A) An unlicensed assistant, in the direct employ of the broker, transfers money out of the property manager's trust account. B) An unlicensed assistant, in the direct employ of the broker, collects the rent from a tenant. C) An unlicensed assistant does a walk-through with a buyer client of her licensee. D) An unlicensed assistant prepares marketing materials approved by the designated broker.

D) An unlicensed assistant prepares marketing materials approved by the designated broker.

Question #10 of 15 Question ID: 1150250 Which of the following statements about arsenic is FALSE? A) Exposure is by air, water, and food sources. B) Arsenic is a solid substance (metalloid) naturally existing in the earth's crust and in crushed rock. C) Clarkdale, Arizona, currently is the site of a soil remediation program to remove arsenic, copper, and lead from the soil. D) Arizona has elevated levels of arsenic in groundwater across the state, especially in the Phoenix and Tucson areas.

D) Arizona has elevated levels of arsenic in groundwater across the state, especially in the Phoenix and Tucson areas.

Question #9 of 15 Question ID: 1150228 The Arizona Department of Environmental Quality was established in 1987. Which of the following statements is NOT true? A) ADEQ enforces state and federal programs. B) At the time ADEQ was established, WQARF was established. C) ADEQ is responsible for the quality of air and water. D) At the time ADEQ was established, CERCLA was established.

D) At the time ADEQ was established, CERCLA was established.

Question #10 of 10 Question ID: 1250770 The foreclosure process in a deed of trust is different from that in a mortgage or a contract for deed. Which of the following is TRUE of a deed of trust foreclosure process? A) The "bare naked title" is in the hands of the trustee. B) Beneficiary notifies the trustee to exercise the power of sale. C) If the trustor has not brought the loan current within the 90 days before the trustee sale is held, the deed goes to the highest bidder. D) Because the foreclosure is a nonjudicial action, the event starts with a default letter to the trustor and a 90-day redemption period.

D) Because the foreclosure is a nonjudicial action, the event starts with a default letter to the trustor and a 90-day redemption period.

Question #2 of 4 Question ID: 1150181 Material falsification is an example of curable breach. True False

False

Question #2 of 4 Question ID: 1250765 An employing broker can always make a payment directly to the licensee of another employing broker. True False

False

Question #2 of 10 Question ID: 1150189 Which of the following is NOT a requirement of the landlord of an apartment or condo complex as it relates to bedbugs? A) The landlord may not enter into any lease agreement with a tenant for a dwelling unit that the landlord knows to have a current bedbug infestation B) The landlord has an obligation to provide bedbug education materials in multifamily housing. C) The landlord must provide bedbug educational materials to existing and new tenants. D) The landlord should provide a statement to the tenant that the property has been inspected for bedbugs and is found to be bedbug free.

D) The landlord should provide a statement to the tenant that the property has been inspected for bedbugs and is found to be bedbug free

Question #8 of 13 Question ID: 1150175 The listing agent receives a call from a buyer's agent with an offer $350,000 for the property, even though the property is listed at $375,000. Which of these statements is correct? A) The listing agent should tell the agent that the offer might be accepted if the offer was $360,000. B) The listing agent should tell the buyer that the offer is too low. C) The listing agent should ask the buyer to put it in writing. D) The listing agent must present the offer to the seller

D) The listing agent must present the offer to the seller.

Question #8 of 10 Question ID: 1150128 Edwin thought he was protected from foreclosure because of the homestead exemption. His loan amount is $200,000, and market value for the house is about $225,000. Edwin lost his job and has his house on the market, hoping for a sale, but he just received a foreclosure notice. What is Edwin's situation with the homestead exemption? A) The lender cannot foreclose because there's not $150,000 in equity. B) The lender will have to give Edwin $150,000 out of the foreclosure sale proceeds. C) The property will be protected only if Edwin owns it together with his spouse. D) The loan is consensual, so the homestead exemption does not apply.

D) The loan is consensual, so the homestead exemption does not apply.

Question #3 of 15 Question ID: 1150229 Which of the following statements is NOT true about septic and alternative waste systems? A) ADEQ regulates wetland disposals. B) It is estimated that 1 in 5 people in Arizona are served by septic or alternative waste systems. C) If there is a well on the property, the well and the septic system must be at least 100 feet apart. D) The mound system is effective if the waste passes through 6 feet of soil.

D) The mound system is effective if the waste passes through 6 feet of soil.

Question #5 of 10 Question ID: 1150272 A public disclosure report is not necessary under certain circumstances. Which of the following is NOT an exemption? A) The sale or lease of parcels, lots, units, or spaces that are zoned and restricted to commercial or industrial uses B) The sale or lease in bulk of six or more lots, parcels, or fractional interests to one buyer in one transaction C) The sale or lease of lots or parcels of 160 acres or more D) The sale or lease of 36 acres or less

D) The sale or lease of 36 acres or less

Question #11 of 13 Question ID: 1150166 Sondra and Larry were looking for property in Casa Grande and found a perfect property, a small two-bedroom house on two acres. They executed the purchase agreement and opened escrow, but due to additional information received after opening escrow, they chose to cancel on the seventh day. Which of the following statements is NOT accurate? A) Sondra and Larry need to give a material reason about the property for cancellation in order to get their earnest deposit returned to them. B) The buyer may cancel the agreement if any information found out about the property during the due diligence period is unacceptable to the buyer. C) Sondra and Larry have the right to use the escrow period to do their due diligence and determine if there are material issues that will prevent them from purchasing the property. D) Under the Arizona statutes, this is okay because the buyers have seven calendar days to cancel this agreement.

D) Under the Arizona statutes, this is okay because the buyers have seven calendar days to cancel this agreement.

Question #7 of 13 Question ID: 1150166 Sondra and Larry were looking for property in Casa Grande and found a perfect property, a small two-bedroom house on two acres. They executed the purchase agreement and opened escrow, but due to additional information received after opening escrow, they chose to cancel on the seventh day. Which of the following statements is NOT accurate? A) Sondra and Larry have the right to use the escrow period to do their due diligence and determine if there are material issues that will prevent them from purchasing the property. B) The buyer may cancel the agreement if any information found out about the property during the due diligence period is unacceptable to the buyer. C) Sondra and Larry need to give a material reason about the property for cancellation in order to get their earnest deposit returned to them. D) Under the Arizona statutes, this is okay because the buyers have seven calendar days to cancel this agreement.

D) Under the Arizona statutes, this is okay because the buyers have seven calendar days to cancel this agreement.

Question #5 of 15 Question ID: 1150260 Ginny owned a piece of property with grandfathered irrigation rights. Which of the following statements about irrigated grandfather rights is FALSE? A) An irrigation grandfathered right specifies how much groundwater may be used. B) An irrigation grandfathered right may not be sold apart from the associated land. C) An irrigated grandfathered right confers the right to irrigate specific plots of land that had been irrigated with groundwater between 1975 and 1980. D) Under the Code, "irrigate" means to apply water to three or more acres of land to produce plants for sale or human consumption or as feed for livestock.

D) Under the Code, "irrigate" means to apply water to three or more acres of land to produce plants for sale or human consumption or as feed for livestock.

Question #12 of 15 Question ID: 1150234 Radon and uranium have a very close relationship. Of the following statements, which is FALSE? A) Radium paint glows green. B) Radium is highly radioactive, and if it is inhaled or swallowed, it is particularly dangerous. C) Radon is a naturally occurring radioactive gas and comes from the natural breakdown of uranium. D) WHO considers 4.0 pCi/l the minimum allowable quantity for radon indoor levels.

D) WHO considers 4.0 pCi/l the minimum allowable quantity for radon indoor levels.

Question #6 of 15 Question ID: 1150234 Radon and uranium have a very close relationship. Of the following statements, which is FALSE? A) Radium paint glows green. B) Radium is highly radioactive, and if it is inhaled or swallowed, it is particularly dangerous. C) Radon is a naturally occurring radioactive gas and comes from the natural breakdown of uranium. D) WHO considers 4.0 pCi/l the minimum allowable quantity for radon indoor levels.

D) WHO considers 4.0 pCi/l the minimum allowable quantity for radon indoor levels.

Question #3 of 3 Question ID: 1149994 A real estate licensee promises a buyer that the property will earn at least $1,200 in rent each month, but after the purchase the buyer is only able to rent it out for $950 each month. The buyer will be able to collect from the recovery fund. True False

False

A designated broker's license will have the same expiration/renewal date as the entity license for which it is designated. One cannot renew one without renewing the other. For example, if the designated broker's license expires on December 31, 2018, then the employing broker's license (entity license) expires on

December 31, 2018, also.

Broker Audit Brokers are subject to audits that allow the Arizona Department of Real Estate to properly oversee the real estate business in the state and to take action where necessary. There are four types of audits:

Declarative = Self-audit (done online by designated broker). Normal and routine = Employing brokers are audited on a random basis by the ADRE. Electronic = ADRE is granted limited, remote access to the Employing Broker's computer to audit certain electronic records. Investigative = This is the result of 1) a complaint, or 2) a problem that shows up in an electronic or a normal and routine audit.

Question #3 of 3 Question ID: 1150073 Arizona requires employing brokers to carry E&O insurance. True False

False

Groundwater rights 3 The Assured Water Supply Program operates within Arizona's five Active Management Areas (AMAs). The Adequate Water Supply Program operates outside of the AMAs to ensure that the water adequacy or inadequacy is disclosed in the public report. However, if in a mandatory adequacy jurisdiction, the adequacy of the water must be demonstrated prior to issuance of a public report. If 100-year supply must be assured, these are the criteria:

Demonstrate specific source of water Must be uninterruptable for 100 years Demonstrate legal rights Satisfy water quality standards Demonstrate financial capability to complete water delivery service Demonstrate consistency with AMA management plan Demonstrate consistency with AMA goals If a developer purchases land for the purpose of developing homes in a subdivision, there will be irrigation rights attached to the land. When the deed is transferred to the developer, the irrigation rights will be retired and a Type 1 or a Type 2 nonirrigation right will be assigned to the new owner, or the developer may use the retired irrigation rights toward the 100-year assured water supply that the developer will have to prove in order to receive the public disclosure report from the Department.

Transaction record requirements are as follows:

Deposit slip indicating date and amount Names of the parties Documentation as to the purpose of the transaction Records set up according to general accounting principles Client ledger, receipts, and disbursement journal Reconciliation of account every 30 days Broker money limited to $3000 in trust account No commingling or conversion Annual sweep of interest (i.e., interest gained on the account over the year goes to the general operating account)

Types of Ownership Type: Time-Share

Description: Multiple purchasers buy interests in real estate—usually resort or hotel property. Each purchaser has the right to use their unit for a set time each year. Ownership: Time-share estate is a fee simple interest. Time-share use agreement is personal property that expires after a specified time period. Transfer: An interest in a time-share estate may be conveyed by deed or will by the owner. An interest in time-share use is personal property that may or may not be transferable according to the contract. Governed by: Developer

Types of Ownership Type: Condominium

Description: Single units are located in lowrise and highrise complexes. Ownership: Owners have fee title to interior space of units and share title to common areas. Transfer: Single units are transferred by dead, will, or living trust. Governed by: Declaration of condominium and elected board of directors (HOA)

Types of Ownership Type: Cooperative

Description: Single units are located in lowrise and highrise complexes. Ownership: Tenants own shares in a corporation, partnership, or trust that holds title to the building, Tenants have proprietary leases and the right to occupy their respective units. Transfer: Shares are personal property. Shareholders may sell or transfer shares. Transfer of shares may be restricted by bylaws. Governed by: Bylaws of the corporation and elected board of directors or trustees

New Home Sales

Developers are new home builders who usually use their own contract forms, and the transaction is different than a resale one. The developer usually puts the earnest deposit into their general operating account as disclosed in the agreement between the developer and the purchaser. While most purchasers work with a sales agent of the developer, that agent represents the developer only. Haldiman v. Gosnell Development Corp., 748 P.2d 1209 (Ariz. Ct. App. 1987) established the marketing/sales agent as one representing only the developer. It is possible that a buyer hires a buyer broker to show them new homes and to act as their representative. Arizona new home developers usually require that the agent accompany the buyer on the first look at the property in order to receive a commission. If the buyer views the development without the agent but wants the representation of a buyer's agent, the developer usually will allow the representation but will not pay a commission.

Person Receiving the Product

Devisee Grantee Legatee Lessee Mortgagor Offeree Optionee Sublessee Trustee

Person giving the product

Devisor Grantor Legator Lessor Mortgagee Offeror Optionor Sublessor Trustor

Roof rats

Discovered in the Arcadia area of Phoenix in 2001, efforts have been made to eradicate them, and have failed. The roof rats can now be found throughout the greater Phoenix area. They can be mostly found on properties that have citrus trees.

Land Subsidence

Downward movement or sinking of the earth's surface caused by removal of underlying support (e.g., pumping out groundwater).

ADEQ (Arizona Department of Environmental Quality) requires permits for the following:

Dry wells, drain areas, and hazardous substances Stockpiles at mining sites Vehicle and equipment washes Disposal wetlands Tertiary treatment areas Biosolids Stormwater construction Discharge of domestic wastewater Reuse of reclaimed water Drinking water facility Hazardous waste (including hospitals) Hot mix asphalt plants Aquifer protection Lead/acid batteries recycling and collection Onsite wastewater treatment facilities Open burn permit Pesticides Public and semipublic pool and spa construction Sewage collection systems Used oil collection centers Used tires And more

Question #3 of 4 Question ID: 1168585 Commission payment to a departing licensee by the broker is a standardized procedure that is the same no matter where the licensee is employed. True False

False

Question #3 of 4 Question ID: 1250775 A special detainer means a tenant has started to hoard newspapers and magazines in the rental property. True False

False

Unit 24: Agency Relationships REVIEW 12%!!!!!

Dual agency is permitted in an Arizona real estate transaction if there are appropriate prior disclosures and written consent of the parties. Arizona is a common law state and takes direction for many agency issues from court decisions in addition to statutory decrees. The statutory fiduciary duties owed to a client include obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care. Statutory disclosure exceptions that protect licensees from liability are failing to disclose that the property has been the site of a natural death, suicide or homicide or any other crime; was owned or occupied by a person exposed to (HIV) or diagnosed as having (AIDS); or is located in the vicinity of a sex offender. The courts in Arizona have defined the illegal practice of misrepresentation and fraud but puffing is legal. In Arizona, a seller listing agreement or buyer broker agreement must contain the following four items: clear and unambiguous language, start and expiration dates, description of the commission, and signatures of all parties. If the buyer does not have a buyer-broker agreement with the client, the commission will be paid if the agent is a member of the area MLS or has a written agreement with the listing agent that gives him cooperation and compensation.

Seller Disclosures

During the executory period of an Arizona real estate contract, the seller is required to disclose all latent material issues that could affect the consideration paid by the buyer. The seller is required to continue to disclose material facts that surface after any initial disclosures up until the close of escrow. For example, perhaps the property sustains heavy wind and flood damage during the escrow period. Even if the insurance covers the repairs necessary, it may be considered a material event that may drastically change the property, so it must be disclosed to the buyer.

The Maricopa County Assessor's office defines legal description systems as written descriptions of the physical boundaries of property rights. If the property is a metes and bounds property, the description would read something like this:

EXHIBIT "A" LEGAL DESCRIPTION The locator information: Section 19, Township 17 North, Range 5 East (T17NR5E) A parcel of land in the Southeast quarter of the Southeast quarter of the Southeast quarter of Section 19, Township 17 North, Range 5 East of the Gila and Salt River Base and Meridian, Yavapai County, Arizona, and a portion of the Northeast quarter of the Northeast quarter of the Northeast quarter of Section 30, Township 17 North, Range 5 East of the Gila and Salt River Base and Meridian, Yavapai County, Arizona, more particularly described as follows: BEGINNING at the Southeast corner of Section 19, a brass cap set in 1956 and being 18 inches below the ground and being the TRUE POINT OF BEGINNING; Thence North 0 degrees, 17 minutes, 54 seconds East, a distance of 143.22 feet to a point; Thence South 89 degrees, 10 minutes, 24 seconds West, a distance of 706.54 feet to a point; Thence South 0 degrees, 12 minutes, 58 seconds West, a distance of 123.25 feet to a point, said point also being the Southwest corner of the Southeast quarter of the Southeast quarter of the Southeast quarter; Thence continuing South 1 degrees, 16 minutes, 31 seconds East, a distance of 79.78 feet; Thence North 89 degrees, 31 minutes, 05 seconds East, a distance of 706.29 feet; Thence North 1 degree, 25 minutes, 23 seconds West, a distance of 64.07 feet to the TRUE POINT OF BEGINNING. TOGETHER with a 15 foot easement for ingress, egress and utilities as described in instrument recorded March 18, 1983 in Book 1523 of Official Records, Page 713 and re-recorded June 8, 1983 in Book 1543 of Official Records, Page 127. If the property is in a subdivision, the legal description would read something like this: "Lot 14, Manzanita Hills II" and it would state the book and the map where it could be found Boundary surveys are risk reduction items to buyers and can be done during the due diligence period if the seller has not provided a full survey. Since many disagreements occur over encroachments and boundaries, it is highly recommended that the buyer hire a surveyor to determine the property boundaries, as well as any encroachments that may exist. It is also recommended that the surveyor be requested to draw into the survey any possible encroachments such as trees, walls, or other potential issues of dispute.

In Arizona, there is a requirement under ARS 11-1133 that an affidavit of legal value must be filed with the deed, containing the following:

Each deed evidencing a transfer of title and any contract relating to the sale of real property shall have appended at the time of recording an affidavit of the seller and the buyer to the transaction, or the agent of either the seller or buyer, or both, in a form approved by the department of revenue, who shall declare and jointly certify the following information: The name and address of the buyer and seller The name and address where a tax statement may be sent The complete legal description of the property The property address The date of sale Purchase price, cash, loan, assumption, down payment Personal property over 5% of property purchase price The assessor's parcel number Relationship of the parties The use and description of the property - owner-occupied or not The name and address of the person to contact about the sale Generally, the escrow officer has this signed by the buyer and the seller when the final documents are signed. The affidavit of legal value is filed with the deed as per statute, in the county where the property is located. Its use is to change the name on the assessor's records and to give pertinent information to the taxing authorities as to the value of the property.

30

Effective 2019, the association must give the unit owner _________ days' notice before authorizing a collection agency or an attorney. The notice must contain the statutory language warning that the proceedings could result in a foreclosure action.

Reclaimed water. There is increasing interest in effluent as a water supply as population growth continues and other renewable water sources become more extensively used. There are some states who already do "toilet to tap." It's currently not done in Arizona due to state laws, but may change in the future. Primary, secondary, tertiary levels of treatment take effluent water to a potable stage.

Effluent water is

Employing Broker Sole proprietor Requires:

Entity license Designated broker (the sole proprietor/employing broker)

Cure Notice

Establishing a Breach of Contract

"A species of estate less than freehold, where lands and tenements are let by one man to another, to have and to hold at the will of the lessor; and the tenant by force of this lease obtains possession." —Black's Law dictionary

Estate at will:

Disclosure Exception Example Situation 3: Same situation, the seller does not tell the listing agent about the murder and accepts an offer from a buyer. Escrow opens. About a week before closing (cash), the buyer wants to go over and do measurements for the furniture. Buyer's agent, listing agent, seller and seller's agent are all together making happy about what a great transaction this has been. Buyer's agent said to seller: "Someone said there had been a murder in this neighborhood, do you know anything about it?" Seller said, "Yes, it was here."

Everyone was surprised. At first the buyers were upset and felt they should have been told. The seller did the best thing by telling the truth. Had the seller said "I don't know" or anything but the truth, this could have been another Lerner vs. DMB Realty lawsuit situation where the courts have opined that ARS 32-2156 is constitutional and that, absent fraud, the seller and the agent are protected against any claims.

The landlord begins to look for a tenant, generally at the same rental rate. If the landlord increases the rent and it takes a couple of months to rent the property, a judge may find that the rent increase delayed the mitigation of the lease under ARS 33-1305.

Example Scenario A: The landlord finds a tenant to move in the beginning of the next month and the loss to the skip-tenant is minimal. The lease is over. Scenario B: The landlord does not find a tenant until the beginning of month 8. Generally, at this point, the tenant will owe more monies than the security monies being held will cover. The landlord may go to court to get a judgment for the deficit monies. The rent is $1,000/month. Security deposit is $1,500. The security deposit is automatically forfeit... to the ledger. $1,500 - $1,000 rent = $500 less any court costs, property damages. The landlord begins to look for a tenant, generally at the same rental rate. If the landlord increases the rent and it takes a couple of months to rent the property, a judge may find that the rent increase delayed the mitigation of the lease under ARS 33-1305.

NOTES Landlord gives keys to the tenant = possession Tenant gives keys to the landlord = return of possession If the landlord gives the keys to the tenant a few days early, then the occupancy begins early. If the tenant does not give the keys back to the landlord at the end of the tenancy, then the tenant may owe another month's rent, or damages to the landlord due to another tenant waiting to move in. In ARS 33-1321, the landlord must let the tenant know that the tenant may be at the move-out inspection.

Example Tenant is leaving December 31 and has notified the landlord that he would like to do the walk-through on in late afternoon of that day. Landlord says he is too busy to do the walk-through until January 2, because of the holiday. The tenant should do the following: Video or take pictures of the property upon move-out In writing, request the return of the security deposit as soon as possible Return the keys to the landlord by the end of the day on December 31 Decide if he wants to come back to do the walk-through with the landlord on January 2 Let the landlord know what the he intends to do If the tenant does not return the keys by December 31, the tenant may be responsible for another month's rent. Both landlord and tenant should keep written confirmations of their discussions.

ARS 32-2165 is the statute that specifically describes unlicensed activities: Examples of unlawful license activity are as follows:

Examples of unlawful license activity are as follows: Unlicensed assistant doing a walk-through with a buyer or a tenant without a licensee in attendance Unlicensed person finding tenants for landlord/owner and receiving compensation Unlicensed person holding an open house without a licensee in attendance Unlicensed person answering phone calls who discusses price, terms, details of a listed home Unlicensed person who meets an unlicensed home inspector and lets him into the property Unlicensed person who delivers transaction documents to a client and discusses the terms of the agreement Unlicensed person who gives a licensee a lead for a listing or a buyer, and receives compensation from that licensee Refer to Substantive Policy Statement 2017.01 (Unlicensed Assistants) in Figure 23.4 for more information.

Question #1 of 2 Question ID: 1150028 A nonresident employing broker who has a trust account is not required to have the trust account maintained in Arizona. True False

False

Question #1 of 2 Question ID: 1150095 The forfeiture process of a land contract is statutory or judicial, depending on the judge's choice. True False

False

Question #1 of 2 Question ID: 1150217 Water issues have little if any effect on real estate licensees or their ability to conduct business. True False

False

Question #1 of 2 Question ID: 1150268 A cemetery salesperson or broker is required to attend the same 90-hour prelicensing course required of real estate salespersons or brokers. True False

False

Question #1 of 2 Question ID: 1250771 A seller must disclose that her home was broken into three months ago and that she was held at gunpoint during the robbery. True False

False

Question #1 of 3 Question ID: 1150071 Arizona takes its direction from specific statutory decrees for MOST issues. True False

False

Question #2 of 2 Question ID: 1150035 A person with no real estate license may present themselves to the public as a real estate broker or salesperson. True False

False

Question #2 of 2 Question ID: 1150037 Teams may advertise as entities separate from their brokerage and are not required to include the brokerage name in their ads. True False

False

Question #2 of 2 Question ID: 1150070 It is the salesperson who is the agent in dual agency. True False

False

Question #2 of 2 Question ID: 1150096 A deed of trust has three participants: the trustor, the trustee, and the mortgagee. True False

False

Question #2 of 2 Question ID: 1150098 In a beneficiary deed, the property will transfer to a named beneficiary after the death of the owner and presentation of the death certificate, with any and all liens and encumbrances completely forgiven. True False

False

Question #2 of 2 Question ID: 1150134 During the executory period, when the buyers are doing their due diligence, they can rely entirely on the seller's disclosures to assist them in identifying issues that might prevent them from moving forward with the transaction. True False

False

Question #2 of 2 Question ID: 1150139 Property management agreements are of a special agency nature. True False

False

Question #2 of 2 Question ID: 1150218 Arizona real estate licensees have no responsibility for determining if the property being sold or bought is in an adjudication area and whether a claim has already been filed with the court. True False

False

Question #2 of 2 Question ID: 1150267 A subdivider may hold a drawing or contest to "induce" a sale, so long as the subdivider intends to submit a current public disclosure report. True False

False

Question #2 of 2 Question ID: 1150269 In Arizona, membership campgrounds are regulated by the Arizona Game & Fish Department. True False

False

Question #2 of 3 Question ID: 1149993 In the event of a complaint, a licensee has seven calendar days from the date of the letter to respond to the complaint. True False

False

Does a deed of trust's promissory note fall under the UCC? Under the UCC, the security instrument must be a negotiable instrument. In Hogan vs Washington Mutual, the Court of Appeals, 1 CA-CV 10-0383, July 2011 concluded the following:

Hogan argued that the bank could not foreclose on the note because the note was a "negotiable instrument" subject to the UCC and the bank did not qualify as a "person entitled to enforce" under A.R.S. § 47-3301. Rejecting this theory, the Court explained that Chase was not suing on the note but instead was conducting a sale pursuant to the deed of trust. A "negotiable instrument" under the UCC is an "unconditional promise or order" to pay money. A deed of trust, in contrast, conveys property to a trustee "to secure the performance of a contract." A.R.S. § 33-801(8). The UCC therefore does not govern a deed of trust because the deed is not an "unconditional promise" or an "order" to pay money.

Arizona Associations Planned Communities (HOAs or POAs) In 1997, the Arizona Legislature chose to do a major rewrite of the planned communities and condominium statutes, and almost every year since, there have been additional substantial changes. Title 33, Chapter 16, Article 1, Planned Communities, ARS 33-1801 through 1818 There is no legal definition for an HOA or a POA in Arizona. For conversational reference:

Homeowner association = HOA Property owner association = POA

The U.S. Department of Housing and Urban Development of office issued a letter on the topic of service animals which provides the following:

Housing providers may ask individuals who have disabilities that are not readily apparent or known to the provider to submit reliable documentation of a disability and their disability-related need for an assistance animal. If the disability is readily apparent or known but the disability-related need for the assistance animal is not, the housing provider may ask the individual to provide documentation of the disability-related need for an assistance animal.

If the sales associate is aware that the client intends to wire earnest deposit funds upon opening escrow, the sales associate should be aware that wire fraud and identity theft are on the rise and transmit this message from the National Association of REALTORS® to those client(s):

IMPORTANT NOTICE: Never trust wiring instructions sent via email. Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct. No matter how the buyer is to make the earnest money deposit, ARS 32-2121.01(C) says this: A broker shall specifically state in the real estate purchase contract, lease agreement or receipt for earnest money the type of earnest money received in any real estate transaction, whether it is cash, a check, a promissory note or any other item of value. Earnest deposits that are not received at the escrow company in a timely manner can cause a potential breach of contract. Arizona contracts spell out how these issues are to be handled.

Notices (cont.) Abandonment notice ARS 33-1370 sets the standard for notice in case of abandonment:

If a dwelling unit is abandoned after the time prescribed in subsection H of this section, the landlord shall send the tenant a notice of abandonment by certified mail, return receipt requested, addressed to the tenant's last known address and to any of the tenant's alternate addresses known to the landlord. The landlord shall also post a notice of abandonment on the door to the dwelling unit or any other conspicuous place on the property for five days.

Part of B defines Arizona's "mailbox rule." Because certified mail seldom brings good news, tenants may choose to ignore the delivery, or they may choose not to pick up the letter at the post office. ARS 33-1313 says the following:

If notice is mailed by registered or certified mail, the tenant or landlord is deemed to have received such notice on the date the notice is actually received by him or five days after the date the notice is mailed, whichever occurs first. A landlord may want to send a certified letter and a regular first class letter at the same time. When the first class letter does not come back, it usually infers that the tenant received both the notice of a certified letter and the first class letter.

Contract Termination (cont.) Remedies Specific Performance

If one party to a purchase contract does not perform a condition of the contract, and the harmed party does not want money, that harmed party files for specific performance. First, a party to a transaction who does not follow a condition of the contract must be given a written notice and a period of time to perform or be considered in breach of contract. Then, the nonbreaching party has the ability to terminate the contract by following the contract provisions for notice and cancellation. The process should be completed by the nonbreaching party delivering a cancellation notice to the breaching party and to escrow. In the situation where the seller does not want to sell, the buyer may choose to ask for "specific performance" in a court of law. In any court case for specific performance, the court will base its decision on whether or not all five of these exist: A valid and binding contract Definite and certain terms Mutuality of obligation and remedy Freedom from fraud and overreaching Lack of remedy at law Shreeve, 65 Ariz. at 39, 173 P.2d at 644 (1954)

90 days before an examination is passed. Cemetery salespersons and brokers are exempt from continuing education requirements; but are required to renew their licenses every two years.

If requested by the prospective salesperson, a temporary cemetery license may be issued by the Department for a maximum of

Central Arizona Groundwater Replenishment District (CAGRD) background

In 1993, the legislature created a groundwater replenishment authority to be operated by the Central Arizona Project throughout its three-county service area. This replenishment is commonly referred to as the Central Arizona Groundwater Replenishment District (CAGRD). In any subdivision built in 1995 or later in either the Phoenix, Pinal, or Tucson AMA, a subdivision property owner is required to pay a cost to replenish groundwater. It's a line item on their annual tax bill every year. Water is the currency of this century and many real estate licensees will deal with significant water issues while working with customers and clients. This section is designed to help licensees understand the different statutes and transaction requirements when listing and selling property in an arid state.

The Executory Period

In Arizona, a contract is executed two times, with an executory period between. A purchase agreement is first executed when the terms are negotiated and the contract is signed and delivered to all contracted parties. The agreement enters escrow and is said to be in an executory state. During this period, the seller, the buyer, the sales associate, and the broker have responsibilities to fulfill to make sure the transaction continues as intended or ends when it will not fairly serve all parties. When the contract is recorded or the deed is conveyed to the grantee, the purchase agreement is executed for the second and final time.

Membership Campgrounds

In Arizona, membership campgrounds are regulated by the Arizona Department of Real Estate. The membership works similarly to a time-share in that you pay a fee for membership, an annual assessment, and are allowed access to different properties for low nightly fees. They are not open to the public. The membership purchased may be used across Arizona at the resort's campgrounds, as well as the resort's campgrounds in other states. There is no "Membership Campgrounds" definition, only definitions for Membership Broker, Salesperson, Operator, and Contract; but the devil is in the details of ARS 32-2101. A membership camping license is required for the broker and any salespersons of the campground. There is a specific membership campgrounds contract used only for membership campgrounds that outlines the specifics of the membership and the use of the recreational facilities. The membership camping operator runs only a membership facility that is not open to the public. Membership campground operators are required to have a public disclosure report issued by the Department that is similar in application to other public report applications. The operators are generally required to post a bond to insure against indebtedness, all for the protection of the membership. The operators are required to use a licensed broker for all sales and contracts. A campground salesperson applicant may request a maximum 30-day certificate of convenience without examination so long as the membership campground broker certifies that the salesperson will be properly trained prior to any involvement in an offer or sale. As with cemetery licensees, membership campground licensees are exempted from any continuing education, but are required to renew their licenses every two years

Subflow background

In a legal decision in 1931, the Arizona Supreme Court defined subflow as "those waters which slowly find their way through the sand and gravel constituting the bed of the stream, or the lands under or immediately adjacent to the stream and are themselves a part of the surface stream." The importance of the decision is that subflow of a stream is treated like surface water in state law. Even if the property owner is pumping well water that would appear to be groundwater, to use subflow, the party must hold the surface water right. There are over 7,000 residential wells in the Verde Valley, most of which are pumping in or near the subflow zone of the Verde River and its tributaries. This is the important area of the Gila River adjudication. Rights will be determined by subflow and who has filed a certificate of claimant with the ADWR.

Concept of Reasonableness

In determining damages in a case, a court will apply the concept of reasonableness. Reasonableness is the cornerstone of common law, because it must take into consideration the premise that not everyone can be judged by the same rule in every situation. It relies heavily on the theory of good faith. The conduct of the reasonable man serves as a comparative standard for determining liability. Example Agent Nora had a property listed for three days when a prospective buyer contacted her and asked if the seller would take $XXXXXX? Nora ignored the verbal offer and within seven days had a written offer for $20,000 less than the verbal offer. The seller accepted the offer, not knowing there had been a higher verbal offer. After closing, the person who made the verbal offer happened to be at a party with Nora's seller. He discussed with the seller his verbal offer and told the seller how very disappointed he was that Nora had not returned at least three phone calls. The seller sued Nora for the $20,000 the seller lost because the offer was never delivered to her. In a bench trial (judge only), the court decides reasonable damages depending on the evidence. If a jury trial, the judge instructs the jury to listen to the evidence, determine the standard of care, and determine if damages are due. The jury is made up of "reasonable" persons.

Control Allocate Alleviate

In some ways, the withdrawal of groundwater is like fishing from a boat in a lake. A fisherman does not "own" the fish beneath his boat. The groundwater, like the fish, is a public resource, and the state can regulate its "capture." This policy applies to AMAs, INAs, and areas outside the management areas. The 1980 Groundwater Management Code goals are threefold

Section H says the following:

In this section "abandonment" means either the absence of the tenant from the dwelling unit, without notice to the landlord for at least seven days, if rent for the dwelling unit is outstanding and unpaid for ten days and there is no reasonable evidence other than the presence of the tenant's personal property that the tenant is occupying the residence or the absence of the tenant for at least five days, if the rent for the dwelling unit is outstanding and unpaid for five days and none of the tenant's personal property is in the dwelling unit.

An agreement that is against public policy cannot be enforced; a contract that obligates any party to perform an illegal act is void. All void contracts are unenforceable. Example

It is illegal to gamble in Arizona. A gambling IOU would be void and unenforceable. An individual could not take an IOU for gambling winnings to court in order to collect on the debt. A voidable contract is a valid, enforceable contract which can be legally canceled by one of the parties without causing a breach of contract. For example, a contract may be rendered voidable when a contracted party is a minor, guilty of fraud or deceit, unduly influenced, under the influence of drugs or alcohol at the time of agreement, or otherwise incapacitated or not of sound mind. In these examples, a voidable contract is enforceable by the minor, party who was defrauded or deceived, party who was unduly influenced, party who was under the influence of alcohol or drugs, or party who was incapacitated or not of sound mind, or the person acting on behalf of the incapacitated party (e.g., an individual's power of attorney).

Question #15 of 15 Question ID: 1150244 Which of the following statements about ADEQ is NOT true? A) It is responsible for inspections and enforcement of air quality compliance, waste program compliance, and water quality compliance. B) The Arizona Department of Environmental Quality's mission is to protect and enhance public health, welfare, and the environment in Arizona C) It regulates mold issues along with other water issues. D) It was established by the Arizona Legislature in 1987 in response to growing concerns about groundwater quality.

It regulates mold issues along with other water issues.

Hoarding as a Disability

It's against the law to discriminate against disabled individuals, and hoarding is a recognized and diagnosable mental disorder in the Diagnostic and Statistical Manual of Mental Disorders, or DSM-V, the book used by the American Psychiatric Association (APA) to classify mental disorders. Because hoarding is considered a disability, property owners must comply with the Fair Housing Act and provide reasonable accommodations. A written agreement can provide the specific guidelines and requirements. Depending on local laws, a hoarder may need help in keeping the property up to code. Wording in the lease should be specific as to what is expected to be done by the tenant, reasonable visitations by the landlord, and what would be unacceptable. If eviction is necessary, photos and inspection reports for the court to view will go a long way.

Unit 25: Real Estate Ownership REVIEW 13%!!!!!!

Judicial foreclosure is a process that takes place in the courts. In Arizona, mortgages must be judicially foreclosed and deeds of trust may also be judicially foreclosed. Nonjudicial foreclosure is a statutory process. A deed of trust may be foreclosed statutorily, eliminating the expense and time of a court proceeding. With a deed in lieu of foreclosure, a borrower conveys all interest in the property to the lender to satisfy a loan that is in, or may go into, default and avoid foreclosure proceedings. The forfeiture process of a land contract is statutory or judicial depending on the seller's choice. There is a statutory grace period from 30 to 120 days depending on the percentage of the purchase paid that has been paid. Alternatives to foreclosure include short sale and loan modification. Leasehold estates in land are estate at will, estate for years, estate at sufferance, and periodic estate. Freehold estates in land are fee simple absolute, defeasible or conditional fee, life estate, and pur autre vie estate. Title to real estate may be held in Arizona by severalty (sole ownership), tenants in common, joint tenancy with right of survivorship, community property and community property with right of survivorship, cooperatives, condominium, time-share, real estate investment trust, and joint ventures. A person may acquire property ownership through adverse possession by using the property without the owner's permission in an open, notorious, and hostile manner for 10 years.

Mold

Many people who come from states with high humidity do not anticipate mold in Arizona's dry, desert climate. It often comes as a shock. Arizona home inspectors can recommend a mold inspection service, but be certain the inspector understands mold. Mold is a form of fungus that can be found almost anywhere and can grow on almost any organic substance, so long as moisture and oxygen are present. Mold growth can gradually destroy what it is growing on, as well as cause serious health problems. The health problems are usually related to allergic reactions and weakened immune systems.

ARS 32-2175 regulates records, audits, and requirements. Property managers are held to high standards for their records, accounting procedures, and ability to keep accurate records. Below are specifics of this statute:

Keep residential leases and documentation for one year Keep records of finder's fees for three years Keep financial records for three years Only the property manager, broker, or a delegated real estate licensee with written authorization may sign nonresidential lease agreements. Sales associates may sign residential lease agreements. Fully executed residential lease agreements are not required to be reviewed and initialed. Consecutively number all PMAs in an orderly manner, easily accessible by the Department Nonresidential lease agreements must be filed chronologically and contain confirmation of deposits and monies handled as per instructions of parties, a complete copy of the lease, and contain a copy of the listing if there is one Onsite PMs must number transaction folders by unit number (apartments) or system easily accessible by ADRE Be prepared to furnish material documents to ADRE upon request

Unit 23: Real Estate Brokerage REVIEW 10%!!!!!

Key Point Review An employing broker is either a brokerage firm (corporation, limited liability company, or partnership) or a sole proprietor and must have a designated broker to fulfill the duties required of an employing broker. A sole proprietor may also be the designated broker. A sole proprietor must either operate in the sole proprietor's name or as a DBA, but not both. LLCs can only be used for non-natural persons (employing brokers); professional corporations and professional limited liability companies are reserved for natural people. The designated broker must delegate a licensee to act for her for every absence of at least 24 hours, but not more than 30 days. If the designated broker dies, the Department may issue a temporary broker license to a licensed or nonlicensed person, for up to 90 days. There are four types of broker audits: declarative (self-audit done online by designated broker), normal and routine (audited on a random basis), electronic (designated broker gives the ADRE access to the employing broker's transaction platform to audit certain records), and investigative (result of a complaint or a problem found in an electronic or normal and routine audit). It is the licensee's responsibility to make an electronic request through ADRE.gov if the licensee wishes to work for another employing broker. The new employing broker will be notified and can accept or reject the licensee. A licensee is entitled to all earned commissions while with an employing broker, even if payment takes place after the licensee's departure. If a departing licensee has open escrows at the time of departure, that licensee may not continue to work the escrows unless the escrows are transferred to the new broker. Compensation can only be paid by an employing broker to a former licensee, if the licensee's commission was earned while working for the employing broker. The employing broker is required to develop written office policies if they have more than one of any of these: designated broker, licensed salesperson or associate broker, unlicensed assistant, or office. Every broker who receives monies entrusted to him must immediately place them in the broker trust account or give them to an escrow company. The trust account must be maintained in a federally insured or guaranteed repository within Arizona and show it is a "trust" or "fiduciary" account. Only the broker (or a licensee designated by the designated broker) may accept into their trust account monies from clients or customers, and it must be used for a specific purpose. There is no commingling violation if the broker limits personal funds in the trust account to $3,000. The designated broker or their designee must review and initial sales documents within 10 business days and keep the files for at least five years. Rejected offers are to be kept one year and employee records kept for at least five years. Blind ads should not be used; the employing broker's name must be included in all advertising. This includes all promotional items, Facebook pages, and pages of a website.

Unit 27: Arizona Residential Landlord-Tenant Act REVIEW 14%!!!

Key Point Review Arizona follows the HUD occupancy standards, which require an owner to adopt and publish reasonable occupancy standards when renting. An occupancy limitation of two persons per bedroom in a dwelling unit is presumed to be reasonable in Arizona. Occupancy considerations when renting include these: tenants with felonies must be considered on a case-by-case basis not a blanket policy, familial status is protected by fair housing laws, it is illegal to discriminate against individuals with disabilities such as hoarding, and service or assistive animals may be allowed on the premises. When the landlord gives the keys to the tenants, they have possession. When the tenants return the keys to the landlord, it is return of possession. A security deposit belongs to the tenant, held by the owner or the property manager, to ensure the property is returned in the condition it was received or as outlined in the lease agreement. If a notice is mailed by registered or certified mail, the tenant or the landlord is deemed to have received the notice on the date it is actually received or five days after the date the notice is mailed, whichever occurs first. The landlord must send the tenant a notice of abandonment by certified mail, return receipt requested, addressed to the tenant's last known address, and post a notice of abandonment on the property for five days. Curable notice occurs if a breach of lease can be remedied by payment of money or by repair, and the tenant cures the breach within a time frame specified in the breach notice. The lease will not terminate. Noncurable notice occurs with material falsification, a second breach act that is the same or similar in nature during the lease, or irreparable breach. These all qualify for immediate removal of the tenant. Types of notices that may be given include the following: a 5-day non-pay for overdue rent; a 10-day breach notice issued for complaints of noise, smells, debris, parking, unauthorized occupants, unauthorized pets, et cetera, a 5-day health and safety notice issued for any act that threatens the health or safety of the tenant; a notice of at least 2 days (48 hours) of the landlord's intent to enter the property only at reasonable times.

Unit 22: Arizona Real Estate Law, Rules, and Licensing REVIEW 13%!!!

Key Point Review Arizona operates under common law making case law very important. The Arizona Real Estate Law Book is an essential source of laws, rules, and guidance for real estate licensees. The 26th Amendment of the Arizona State Constitution gives real estate licensees the right to "draft or fill out and complete" real estate documents incidental to the real estate transaction; however, it does not relieve licensees from recommending the advice of an attorney, financial advisor, or other expert to their clients. The Commissioner of the Arizona Department of Real Estate is appointed by the governor and is responsible for the licensing of real estate licensees, cemetery licensees, and membership campground licensees. The Commissioner handles homeowners association disputes, and is also responsible for maintenance of the recovery fund. The Arizona Real Estate Advisory Board consists of 10 members, appointed by the governor, for six-year terms. Salesperson and broker applicants must complete a 90-hour prelicensing course, pass the course exams, and earn a passing grade on the state-administered licensing exam. Salesperson applicants must also take a 6-hour contract-writing course and broker applicants a 9-hour broker management clinic and have reached three active years as a salesperson. A licensee from another state who has been actively licensed for at least one year, moves to Arizona, and establishes residency may apply for an Arizona license by passing the state exam without taking the 90-hour prelicense course. Licenses for new licensees who do not yet have an employing broker will be on inactive status. A license will not be issued to a person who has been convicted of a felony and is currently incarcerated or paroled or under community supervision. Salesperson and broker licensees renew their license, active or inactive, every two years. A salesperson or a non-delegated associate broker must complete 24 continuing education hours. A designated broker or delegated associate broker must complete 21 continuing education hours and the Broker Management Clinics trilogy (three 3-hour classes) for a total of 30 hours. The Commissioner has the power to examine the employing broker's books and records, investigate actions of licensees, and require documentation. Licensees have 14 calendar days to respond to complaints and the investigation process may result in a letter of concern, consent order, or final order that might include license suspension, revocation, or a fine to be determined by the Commissioner. A member of the public who has been harmed by the actions of a licensee, such as misrepresentation or fraud, breach of real estate licensing statutes, or rules, may be able to recover an unpaid judgment through the recovery fund. The fund will pay only for any actual or "out-of-pocket" expense, limited to $30,000 and $90,000.

Unit 26: Contracts and Contract Law review 14%!!!!!

Key Point Review In an express contract, principals agree in writing or verbally to the terms of a contract. Real estate purchase contracts are express contracts. Implied contracts are created by the actions and conduct of the parties. Implied contracts are legal in Arizona, but difficult to prove in court. Unilateral contracts, such as options and right of first refusal, allow only one party to make a promise. In a bilateral contract, each party makes a promise to the other. Real estate purchase agreements, listing agreements, and lease agreements are examples of bilateral contracts. A contract that obligates any party to perform an illegal act is void. A voidable contract is a valid contract that can be canceled by one of the parties without causing a breach of contract. The Statute of Frauds requires all real estate purchase agreements plus any amendments to the agreement to be in writing. At a minimum, a valid offer must contain a purchase price, legal description, and consideration and be signed by the offeror(s). Under Arizona community property laws, both spouses must sign the purchase contract and contracts may also be signed by designated trustees and individuals with power of attorney. Licensees must promptly present all offers, verbal or written, to the seller until close of escrow or the expiration of the listing agreement unless relieved of the responsibility by the principal. When a purchase agreement enters escrow, it is in an executory period. The designated broker or a delegated associate broker must review the purchase document within 10 business days of the document execution and ensure that it states the type of earnest deposit and who is holding it. The documents must be retained for no less than five years. The executory period allows the buyers to do their due diligence and inspect the property, and the seller is required during the period to disclose all latent material issues. Contingencies are also addressed during the executory period. Common contract contingencies are based on homeowners association rules and regulations, inspections, loan approvals, and property appraisals. Reasons a contract may be terminated include contingency not met, lack of performance, disclosure information, change in disclosure information, inspection issues, destruction of property, breach of contract, inability to secure financing, and rescission. When one party to a real estate contract is in danger of breach, the other party may give written notice of the potential breach and offer curative measures. Should the seller decide not to sell, the buyer may agree to the cancel the contract and request return of the earnest deposit and any out-of-pocket expenses or sue for specific performance. Should the buyer walk away, most contracts limit the seller to the earnest deposit as damages. Property management agreements must be clear, state material terms and conditions, be signed by the owner and manager, and have beginning and ending dates, compensation, assignment and cancellation terms, reporting requirements, and disposition of money collected earned interest. The bank account used to hold other people's monies must be designated with certain language such as "trust account." Property management financial records must be kept for three years, leases for one year, and finder's fees for three years.

Unit 29: Land-Use Controls & Property Development REVIEW 12%!!!!

Key Point Review Legal description methods are Rectangular Survey System (Public Land Survey System [PLSS]), metes and bounds, and lot, block, and tract. Most of Arizona is mapped using the Rectangular Survey System—PLSS. It provides for a unit of land approximately 24 miles square divided into areas six miles square called townships. Townships are further divided into 36 sections, each 1 mile square. A mete is the line, and the bound is the area within the metes describing a parcel of land starting at the point of beginning (POB). Survey benchmark monuments or markers are brass or metal disks in the ground. They measure exact horizontal positions. The base line runs east and west, while the meridian runs north and south. Township lines run parallel to the base line, which runs east to west. Range lines run parallel to the meridian, which runs north to south. A quadrangle is a 24-mile-square area made up of 16 townships. A subdivider is someone who offers for sale or lease six or more lots, parcels, or fractional interests. Unsubdivided land has not gone through the Department of Real Estate's subdivision application process. Subdivision or subdivided lands refer to either unimproved or improved lands intended to be offered for sale or lease. Not included are lots that will be divided into 36 acres or more and leased commercial or agricultural lands. Improved land means a lot or parcel of a subdivision with a residential, commercial or industrial building or a contract between a subdivider and a purchaser that obligates the subdivider to construct a residential, commercial, or industrial building within two years from the date of the contract. The Arizona Department of Real Estate regulates subdivided properties through a process known as the application for subdivision public report. Under ARS 32-2181, a subdivider must apply to the Commissioner of the intent to subdivide. There are 22 requirements in the application that must be documented. After receiving the application, the Department will perform a review and will approve or deny a public disclosure report. While awaiting the application for the public disclosure report, the subdivider/developer may take lot reservations. It is unlawful for a person or persons to attempt to circumvent the subdivision statutes by "acting in concert." The subdivider's advertising must be truthful, clearly represent the property, and consistent with the public disclosure report. Association means a nonprofit corporation or unincorporated association of owners created by a declaration to own and operate portions of a planned community. The association has the power to assess members the costs and expenses incurred in the performance of the association's obligations under the declaration. There is no legal definition for a homeowners association (HOA) or a property owners association (POA) in Arizona. In Arizona, membership campgrounds are regulated by the Arizona Department of Real Estate and work like a time-share. Members pay a fee for membership, an annual assessment, and are allowed access to different properties for low nightly fees. They are not open to the public.

Unit 28: Water, Wells, Waste, and Environmental Issues REVIEW 12%!!!!

Key Point Review The right to divert ground water in Arizona is governed by the state's doctrine of prior appropriation, "first in time, first in right." Groundwater is water under the surface of the earth. Groundwater does not include water flowing in underground streams with ascertainable beds and banks. Surface water is waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, floodwaters, wastewaters, or surplus water, and of lakes, ponds and springs on the surface. Effluent water is water that has been collected in a sanitary sewer for subsequent treatment in a facility. ADWR requires all wells drilled to be reported to the Department. They also require notice of a change in ownership of the well. Under the Groundwater Code, wells are classified as exempt wells pumping 35 gallons per minute or less and nonexempt wells that pump over 35 gallons per minute. When selling vacant land, the buyer must be made aware of the requirements of adding a waste disposal facility on the property if a sewer hookup is not available. A permit will be required for a conventional septic system. Alternative waste disposal systems include an aerobic system and a mound septic system. Environmental concerns requiring disclosure in Arizona include arsenic in groundwater, radium, radon, lead in old paint and pipes, mold, exterior insulation and finishing system, propane tanks, wood infestation, roof rats, scorpions, other wildlife.

Unit 28: Water, Wells, Waste, and Environmental Issues 12%!!!!

Key Terms CAGRD doctrine of prior appropriation effluent water exempt well groundwater irrigation grandfathered rights land subsidence nonexempt well surface water

Unit 26: Contracts and Contract Law 14%!!!!!

Key Terms affidavit of legal value bilateral contract contract express contract implied contract open listing option rescission period specific performance statute of frauds stigmatized property unilateral contract valid contract void contract

Unit 29: Land-Use Controls & Property Development 12%!!!

Key Terms base line correction line Government Survey System legal descriptions meridian metes and bounds Public Land Survey System quadrangle range line Rectangular Survey System section standard parallels subdivided land township township line

Unit 25: Real Estate Ownership 13%!!!!!!

Key Terms deeds of trust foreclosure forfeiture judicial foreclosure mortgage nonjudicial foreclosure

Unit 24: Agency Relationships 12%!!!!!!

Key Terms dual agency errors and omissions insurance fraud limited representation real estate employment agreement special agency

Unit 27: Arizona Residential Landlord-Tenant Act 14%!!!!!

Key Terms security deposit special detainer writ of restitution

Subdivided Land

Lands of six or more parcels of improved or unimproved lands intended to be offered for sale now or in the future.

Land contract, agreement for sale, contract for deed, contract for conveyance

Late payment File the notice of forfeiture Statutory grace periodIf there has been paid less than 20% of the purchase price, 30 days.If there has been paid 20%, or more, but less than 30% of the purchase price, 60 days.If there has been paid 30%, or more, but less than 50% of the purchase price, 120 days.If there has been paid 50%, or more, of the purchase price, 9 months. Acceleration of the debt File the affidavit of completion of forfeiture. Forfeiture by note falls under ARS 33-745. It should be noted that a land contract can also be foreclosed by judicial procedure under ARS 33-744. The period of time to reinstate the agreement is during the grace period. The vendor holds the title until the vendee pays off the loan in full.

Both a mortgage lien and a deed of trust must be recorded. Notably, a borrower's promissory note (detailed loan terms) is not recorded in either case.

Late payments Beneficiary instructs trustee to send the notice of default Beneficiary tells trustee to exercise of the power of sale Title guaranty report ordered from a title company Ninety-day reinstatement period begins Notification of all parties Public notice for four weeks in newspaper in county of property Credit bid Trustor has 90 days to reinstate the loan (bring payments current) Trustee sale held 90 days after the power of sale is exercised Highest bidder wins Trustee's deed delivered seven days after delivery of the purchase funds Excess money bid lender pays junior lienholders Deficiency bid lender may sue for deficiency unless trustor qualifies under anti-deficiency statutes

Net lease

Lease in which the tenant regularly pays not only for the space, but for a portion of the landlord's operating costs as well. Many leases are "triple net," meaning the tenant is responsible for the ongoing expenses of the property, including real estate taxes, building insurance, and maintenance, in addition to paying the rent and utilities.

If these were subdivided lands, the developer or subdivider would be required to furnish a public subdivision report, but because these properties are exceptions to the subdivision rules, Arizona laws then require individual sellers to make disclosures to any and all buyers about the property they are about to purchase, such as the following:

Legal access Physical access Road maintenance Flood plain Subject to fissures or expansive soils Services provided on the property Hauling of water Water provider Onsite waste facility Perc tested Meets minimum county zoning requirements Must meet ARS 11-831 Near Military airport Any pending litigation Solar panels Whether the property is subject to water adjudication Consider the Affidavit of Disclosure a seller disclosure document in lieu of a public disclosure report. While done on a much smaller scale, the information is intended to inform a potential buyer about certain risks that may be known only to the seller. After receipt of the Affidavit of Disclosure, the buyer has five days to rescind the sale of the property. This does not mean the seller can forego the written seller disclosure of material defects. The properties will require both.

Mechanics' liens

Liens that arise from construction and other improvements to real estate.

Noncurable

Material falsification, a second act that is the same or similar in nature during the term of lease, or irreparable breach, all qualify for immediate removal.

There are two ways to set up your LLC for an employing brokerage:

Member managed Manager managed

The Department may deny a public disclosure report. These are some of the reasons:

Misrepresentation, deceit, or fraud Inability to deliver title Owner(s) with more than 10% interest has been convicted of fraud or dishonesty in a real estate transaction(s) Had a judgment or adverse decision entered against owner(s) for fraud or dishonesty in a real estate transaction(s) Attempt to procure a public disclosure report by fraud, misrepresentation, or deceit Failure to give assurance that lot owner may acquire lot free of blanket encumbrance Failure to provide permanent access to lots Situation where use of the lots would present unreasonable health risk

Security Deposit

Money held by the landlord to ensure that rent will be paid and other responsibilities of the lease performed.

Actual Damages

Monies paid out to a harmed individual based on proven harm, loss, or injury are actual damages. They are also considered compensatory damages.

Dispute Resolution

Most Arizona contracts contain a dispute resolution clause which indicates how a dispute shall be handled. Arizona courts, from small claims court to superior court, require mediation prior to a trial; therefore, most contracts have a dispute resolution clause requiring mediation first. Should mediation not resolve the dispute, the contract may allow the parties to go next to arbitration or directly to the courts. Mediation is a process whereby the parties come to a solution on their own, facilitated by a mediator. Arbitration is a process whereby an Arbitrator is agreed to by the parties and after hearing all the evidence, decides the case.

Close of Escrow

Most Arizona residential contracts state that the closing of the escrow happens when the deed is recorded; but, other transfers of title may be just the passing of the deed from the vendor to the vendee. It should be noted that many lenders use the term "closing" when the loan is approved and the documents are drawn and signed. This should not be confused with the "closing of escrow."

Requirements of a Lease Agreement (cont.) Commercial Offers Letter of Intent

Most commercial transactions begin with a letter of intent, often referred to as an LOI, which is meant to express an interest in the property, but not meant to bind the parties. Consider it a non-binding offer. After the due diligence period, if the purchaser intends to purchase the property, the formal documents are drawn and the negotiations begin. Some buyers will go directly to a purchase agreement with a due diligence period well defined. A difference from a residential purchase with tenants and a commercial purchase with tenants is the request for estoppel certificates from the tenants. The estoppel certificate, as defined in Black's Law Dictionary, 9th Edition, is a "signed statement by a party (such as a tenant or mortgagee) certifying for another's benefit that certain facts are correct, such as that a lease exists, that there are no defaults, and that rent is paid to a certain date. A party's delivery of this statement estops that party from later claiming a different state of facts."

A time-share contract has a 10-calendar-day rescission period from the time the time-share purchase agreement is executed. Someone who purchases a raw, undeveloped lot or parcel (unimproved lot) without physically seeing it has six months to see the property and rescind the contract. A buyer of land who completes the purchase before receiving the public disclosure report has three years to rescind the agreement.

NOTES

Emotional support animals (also called comfort animals) do not require specialized training. They help alleviate symptoms of a disability that impact one or more daily activities. An emotional support animal also qualifies as an assistive animal under fair housing laws.

NOTES

For example, persons who are blind or have low vision may not be asked to provide documentation of their disability or their disability-related need for a guide dog. A housing provider also may not ask an applicant or tenant to provide access to medical records or medical providers or provide detailed or extensive information or documentation of a person's physical or mental impairments.

NOTES

For example, the housing provider may ask persons who are seeking a reasonable accommodation for an assistance animal that provides emotional support to provide documentation from a physician, psychiatrist, social worker, or other mental health professional that the animal provides emotional support that alleviates one or more of the identified symptoms or effects of an existing disability. Such documentation is sufficient if it establishes that an individual has a disability and that the animal in question will provide some type of disability-related assistance or emotional support.

NOTES

However, a housing provider may not ask a tenant or applicant to provide documentation showing the disability or disability-related need for an assistance animal if the disability or disability-related need is readily apparent or already known to the provider.

NOTES

Unsubdivided and Subdivided Lands (cont.) Procedures Under ARS 32-2181, a subdivider must notify the Commissioner of the intent to subdivide. There are many requirements in the application that must be documented. Among those items are assured water supply, in an AMA, INA or not, CAGRD, access, expansive soil engineering studies, flood studies, financial documents, sanitary facilities approval from ADEQ, CC&Rs, and numerous other requirements. A specific requirement regarding CAGRD, Central Arizona Groundwater Replenishment District: Any subdivision built in 1995 or later in the Phoenix, Pinal, or Tucson AMA, requires a subdivision property owner to pay a cost to replenish groundwater. It's a line item on their annual tax bill.

NOTES

If the housing provider has an office policy that requires all reasonable accommodation requests to use a specific form of the landlord's, that is the policy, and the only exceptions would be those who are blind or who can be seen to need an assistive animal or service animal. It's important to remember that the request for reasonable accommodation is for the animal, not the person. It's about the work the animal does for the individual. The Arizona REALTORS® Application for Occupancy states the following on line 58: "Will you have an assistive or service animal? Yes or No. Accommodation request required with application." The rental criteria should stipulate if there is a special form the landlord uses. An Arizona landlord had a tenant who informed the landlord that the tenant now had an assistive animal, Miss Piggy. The landlord was in total disbelief! What could a pig do for the tenant? She called her attorney, who made an appointment with the tenant to meet Miss Piggy and to determine if the work Miss Piggy did for the tenant met the litmus test of an assistive or service animal. After a few minor demonstrations, the attorney asked to see more. The tenant said: "Miss Piggy, get me a beer." The pig went into the kitchen's refrigerator, grabbed the towel tied to the door, opened the door, grabbed a beer with its mouth, nudged the door closed, and took the beer to the tenant. Miss Piggy was allowed to remain as an assistive animal.

NOTES

NOTES Estates, Ownership, Acquisition, and Transfer (cont.) Ownership Sole ownership-severalty Joint tenancy with right of survivorship Tenancy in common Community property Community property with right of survivorship Ownership in severalty means that when real estate is owned by a single person or legal entity, it provides the owner with the most complete control of the land.

NOTES

NOTES If using the AAR purchase contract, a seller has three days from contract execution to give the buyer the completed AAR Seller Property Disclosure Statement. The buyer has five days from the receipt of the disclosures to accept or reject the property based on that information alone. Even if the initial disclosure is made and accepted by the buyer, the seller is still required to update any material information during the escrow period. Upon receipt of any material disclosure later, during escrow, the buyer has five days to accept or reject the property as it pertains to the updated information.

NOTES

NOTES Implied contracts are difficult to prove in court. The party asserting the existence of the oral contract has the burden of proof. For example, if buyer Sarai is looking for a property, and agent Reggie shows Sarai properties in her price range and location, but the parties do not have a signed buyer broker agreement, their contract is implied. The implied contract is a valid contract, but such an agreement may not meet the terms of the statute of frauds or ARS 32-2151.02, real estate employment agreements, as it relates to commissions.

NOTES

NOTES In many situations, the owners will not want to manage their own property and will assign the management to a property manager through a property management agreement. If there is a property management agreement in place, the property manager will be acting for the owner, as outlined in the agreement. This general agency authority extends beyond specific tasks and may be ongoing for extended periods. An Arizona property management agreement will go beyond finding a tenant. Whether owner or property manager, when "landlord" is mentioned, the Arizona Residential Landlord and Tenant Act applies to both.

NOTES

NOTES Two days' notice means 48 hours' notice, not a call to the tenant Monday morning at 8 for access at 5 pm Tuesday. It is suggested that reasonable times be business hours. In the event the tenant needs a repair or service call, the request to the landlord waives a two-day notice and receipt of notice. Then, there is the immediate access by the landlord if there is an emergency. This statute does remind the landlord not to harass the tenant and that there is no other right of access except by court order or abandonment by the tenant.

NOTES

NOTES When one party to a real estate contract is in danger of breach of contract, the other party may give notice of the potential breach and offer curative measures. The cure notice must be in writing. For this, REALTOR® members use a cure notice. This is a standard form for REALTORS®; non-REALTOR® members who wish to issue a cure notice would provide a written notice detailing the unresolved issue, actions to complete to resolve the issue, and a deadline by which time the unresolved issue must be "cured." If the issue is not attended to within the time period stated in the notice, the nonbreaching party has established a breach of contract and may choose to cancel the contract, give the breaching party more time, or waive the issue altogether. In the case of an earnest deposit, the seller would probably not waive the duty of the buyer to deposit earnest money in the transaction.

NOTES

Service and assistive animals Service animals are specifically and rigorously trained to perform specific tasks or alerts to mitigate their handler's disability. These animals are permitted to accompany their handlers in public areas because of ADA laws. They are working and should not be interacted with by others unless the handler gives permission to do so. These animals qualify as an assistive animal under fair housing laws.

NOTES

Therapy animals are trained to provide psychological or physiological therapy to individuals other than their handlers. Typically, they visit various institutions such as hospitals, schools, hospices, psychotherapy offices, and nursing homes. They are encouraged to interact positively with others. A therapy animal does not qualify as an assistive animal under fair housing laws.

NOTES

Township lines run parallel to the base line, which runs east to west. Range lines run parallel to the meridian, which runs north to south. The shaded township above can be located by the township locator code T3NR4E. Township lines run east to west; hence, T3N would take us three lines north from the base line. Range lines run north to south; hence, R4E would take us three lines east from the meridian. It may help to remember that the locator code uses T for township, R for range, and N, S, E, and W for north, south, east, and west. A section is described under the Public Land Survey System as an area 1 square mile, containing 640 acres, with 36 sections making up one township in a quadrangle.

NOTES

Damages

Parties to an Arizona real estate contract enter it and show good faith by their signatures and delivery, but there's not always a happy ending. When the transaction does not conclude as planned and the parties suffer as a result of it, the parties might be awarded actual or liquidated damages.

Disclosure Exception There is one statutory disclosure exception where the licensee is protected from liability, unless the potential buyer asks about specific issues. ARS 32-2156, the stigmatized property statute, says the following:

No criminal, civil or administrative action may be brought against a transferor or lessor of real property or a licensee for failing to disclose that the property being transferred or leased is or has been:The site of a natural death, suicide or homicide or any other crime classified as a felony. Owned or occupied by a person exposed to the human immunodeficiency virus (HIV) or diagnosed as having the acquired immune deficiency syndrome (AIDS) or any other disease that is not known to be transmitted through common occupancy of real estate. Located in the vicinity of a sex offender. Failing to disclose any fact or suspicion as set forth in subsection A shall not be grounds for termination or rescission of any transaction in which real property has been or will be transferred or leased.

is a process that is agreed to in the lending contract, thus bypassing the courts. A deed of trust may be foreclosed statutorily, eliminating the expense and time of a court proceeding.

Nonjudicial Foreclosure A process that is agreed to in lending contracts using an acceleration clause and power of sale clause, thus bypassing the courts

ease Agreements Title 10, Chapter 33 The Arizona Residential Landlord and Tenant Act, also called the ARLTA, can be found on the Arizona Department of Housing's website: https://housing.az.gov/. Who is responsible for landlord-tenant issues? The courts. The specific statute that limits the Department's role in landlord-tenant issues is ARS 32-2160(C), which states:

Nothing in subsection B shall give the department jurisdiction over any landlord and tenant disputes or federal or state fair housing violations or authorize the commissioner to seek sanctions under this chapter or any rule or order of the commissioner relating to these matters.

Lease Agreements (cont.) Occupancy Standards Arizona adopts the HUD occupancy standards: ARS 33-1317(F) states:

Nothing in this section shall prohibit a person from refusing to rent a dwelling by reason of reasonable occupancy standards established by the owner or the owner's agent which apply to persons of all ages, and which have been adopted and published before the event in issue. An occupancy limitation of two persons per bedroom residing in a dwelling unit shall be presumed reasonable for this state and all political subdivisions of this state.

Notices (cont.) Delivery and Receipt

Notice must be made through actual receipt or in hand or by certified or registered mail, as detailed in ARS 33-1313. Notice must be written and sent to the address held out by the tenant or landlord as a place for communication, or to the last known address (if tenant) or place of business (if landlord). All notices are deemed received after five calendar days if mailed certified or registered mail, or when actually signed for, whichever is sooner. If a party has proof that the other party received the document (usually this requires some responsive acknowledgment by the receiving party), then it is acceptable proof as receipt of notice. Text messages, voicemails, emails or other electronic communications serve as excellent back-up notice vehicles, particularly if the parties have agreed to this type of communication either at the beginning of the lease or at a time prior to the need to send a notice by email or text.

The fiduciary duties owed to a client include the following (OLD CAR):

Obedience: to Lawful instruction of client and to Price, Terms, and Motivation (PTM) Loyalty: to the client's Interests above the agent's Disclosure: of licensee's interests, ateriand mal facts known about a property or a buyer's qualifications Confidentiality of PTM lasts for life, it's unique because all other duties expire at the end of a contract but a person hired as an agent may never in the future disclose what she knows of a client's confidential information / PTM. Accounting: of all valuables owned by a client such as signed documents, keys, and monies in trust. Reasonable care is acting with competence. Licensees work in specialties in which they possess current, relevant education and experience, or work with a broker or mentor who can provide such assurance to newer licensees and clients.

ARS 32-2176 is particularly specific to apartments and their tenants:

Pay a finder credit to an unlicensed person who is a tenant Residential leasing manager may receive a bonus Pay a finder credit to an unlicensed person who is a tenant A tenant may receive multiple finder fees pursuant to this section up to five times in any 12-month period

In a commercial foreclosure, the lender will want to do certain due diligence:

Obtain an appraisal to determine the appropriate credit bid Obtain a Phase I environmental study (noninvasive) before the foreclosure. If necessary, a Phase II environmental study (samples) to determine issues and extent. Review current leases Review all title documents: development agreements, CC&Rs, potential option, and first right of refusal triggers Conduct a physical inspection of the collateral property Confirm the borrower's liability and casualty insurance is still in place Check all taxing authorities to determine tax liabilities that may be passed on at foreclosure Determine if the lender needs to qualify to do business in Arizona for business purposes Determine the expense of Phase III environmental remediation

Agreements Put it in writing Property management agreements are of a general agency nature. Most have clause components stating that the property manager will act for the owner. One example is the following:

Owner shall approve all expenditures in excess of $ for any one item, including repairs to be paid by deductions from tenant's deposits, except that no Owner approval shall be required for recurring operating expenses or emergency repairs if in the sole discretion of the Broker such repairs are necessary to protect the Property from damage or to maintain services to the tenant as required by the lease(s). The property management agreement may also allow the property manager to solely be in charge of choosing the tenant. These are examples of the property manager doing more general duties versus a listing agent doing specific, simple duties that don't require acting for the client. Listing agents do very limited duties, such as marketing the property in order to find a buyer. If the marketing provides a buyer for the property, the seller pays the listing broker a commission. Property management agreements are of a general nature. Listing and buyer broker agreements are of a specific nature. Property Management Agreement shows a sample Property Management Agreement. Through ARS 32-2171, all real estate property management agreements are regulated by what must be in an agreement and what may be in an agreement. Agreements must have the following: Be in clear and unambiguous language State all material terms and conditions Be signed by the property owner or his agent and the property management firm's designated broker or the broker's authorized real estate licensee Specify a beginning and ending date Specify the compensation terms to PM Note no assignment to another PM without express written permission of the owner Contain cancellation provision agreeable to both parties State disposition of all monies collected by PM including security deposits Specify type and frequency of status reports Describe amount and purpose of operating monies held by PM State who gets the interest monies Agreements may have the following: Contain an automatic renewal provision so long as PM sends notice at least 30 days in advance of renewal Provide reasonable liquidation damages or cancellation fees for early termination Authorize a licensed or unlicensed employee of the brokerage to put monies into or be a signatory on the property management trust account Require more than one signature on checks of trust account

Recapping Handyman Exemption

Owner/builders are exempt so long as the purpose is for their own occupancy. No sale or rental for one year. The maximum is $1,000 for aggregate work done by an unlicensed person. Work that requires a permit is not exempt. Disclosure must be made by the sellers and the licensees who do work using the handyman exemption. For those who are "fix 'n' flippers," additional disclosure information must be made to ensure the buyer has all the facts before a purchase is made. Sellers are obligated by Arizona common law to disclose all known material facts about a property to the buyer, even if they have never lived on the property.

Employing Broker Sole proprietor can hire:

Sales associates Broker associates Unlicensed assistants

Unsubdivided and Subdivided Lands (cont.) Subsequent Owner Exemption—ARS 32-2181

Per the statutes: The subdivider shall file a statement with the commissioner indicating the change of ownership in the lots or parcels together with any material changes occurring subsequent to the original approval of the subdivision.

If the branch office is managed by a sales licensee, only these duties can be performed:

Perform office management tasks that are not statutory duties of the employing broker (e.g., filing, ordering materials, etc.) Be a signer on the broker's trust account and property management trust account

Property has two categories:

Personal property Real property For property tax purposes in Arizona, personal property is defined as all types of property except real estate. Taxable personal property includes property used for commercial, industrial, and agricultural purposes. Personal property is considered to be movable and not permanently attached to real estate. - Arizona Department of Revenue

Lease Agreements (cont.) Trends Affecting Tenant Lease Payments

Positive leasehold. A tenant whose lease rent is below market rents in the same vicinity is said to have a positive leasehold should the tenant choose to sublet the property. Negative leasehold. A tenant is paying a higher market rent than that of renters of similar properties. Excess rents. When a tenant chooses to sublet the property according to the terms of the lease and charges the subtenant more than the lease rent. Many leases give all or some of the excess rents to the landlord.

Potable Water

Potable water is drinking water. To get to a potable state, water must go through different processes: Primary treatment: screening of large objects, removal of grit; then sent to a sediment tank where the raw primary biosolids (sludge) are separated out. Secondary treatment: effluent sent to the trickling filter or an activated sludge process and later treated with chlorine. Dechlorination then takes place to remove the excess chlorine. Tertiary treatment: sometimes called "effluent polishing." Water is purified with filters to remove larger protozoans, and by chemical or UV disinfection to kill bacteria and other small pathogens. Arizona's drinking water rules are located in Title 18, Chapter 4, of the Arizona Administrative Code (18 A.A.C. 4). ADEQ adopted the federal rules in order to maintain Arizona's primary enforcement authority of the Safe Drinking Water Act.

According to ____________, "a licensee owes a fiduciary duty to the client and shall protect and promote the client's interests. The licensee shall also deal fairly with all other parties to a transaction."

R4-28-1101(A)

According to ___________, "a salesperson or broker shall not accept compensation from or represent more than one party to a transaction without the prior written consent of all parties." The Department may suspend or revoke a license if the licensee "acted for more than one party in a transaction without the knowledge or consent of all parties to the transaction" (______________).

R4-28-1101(F), (ARS 32-2153(A)(2).

covers professional corporations and professional limited liability companies.

R4-28-303(F)

_______________allows the employing broker to have branch offices by submitting paperwork to the Department and delegating an associate broker or sales licensee as the branch manager.

R4-28-304

There is no Arizona statutory definition for a "homeowners association." There is only a definition in the Arizona Administrative Code

R4-28-A1213, that refers to a "property owner's association" as it applies to a developer's requirements for a public disclosure report. A POA or an HOA, is an "association" if it meets ARS 33-1801 as described above. The corporation must not have lapsed with the Arizona Corporation Commission. If the association's status has lapsed as a legal entity or the association has been dissolved by the membership, it would take every member of the association to bring it back to the mandatory association status and, as a result, these associations can only be voluntary memberships.

Radium

Radium comes from uranium. Radium is highly radioactive and, if inhaled or swallowed, is particularly dangerous. Once inside the body, it emits radiation directly to living tissue, where it damages cells. Uranium mines have flourished in Arizona in the past, so it's not surprising that there are lasting effects from those mines, but radium, at the turn of the 20th century, found its way into paint. The paint glowed! Antiques, watches, and clocks were collectables containing radium and, in the dark, cast a greenish glow. After the health effects of radium were discovered, the radium was replaced with phosphorescent light sources.

Radon

Radon is a naturally occurring radioactive gas and comes from the natural breakdown of uranium. It is considered the second-highest cause of lung cancer in the United States. EPA considers 4.0 pCi/L the action level for indoor radon. At this measurement, the EPA recommends taking corrective measures to reduce the level of indoor radon. The World Health Organization recommends 2.7 pCi/L as a safe level. Some of the areas with higher radon levels, due to basalt, limestone, and granite, are The Phoenix Mountains, Cave Creek, Granite Dells, the Verde Valley, and the Cardinal Avenue area of Tucson. The regulatory department for radon in Arizona is the Bureau of Radiation Control, under the Department of Health Services. The United States Geological Survey can provide additional information. Radon can be found in the air throughout Arizona, but because ventilation is the remedy, most houses will see levels at the benchmark or below. The EPA puts all of Arizona in the "Moderate Potential: counties have a predicted average indoor radon screening level between 2 and 4 pCi/L..."

Effluent Water

Reclaimed water that has been collected in a sanitary sewer for subsequent treatment in a facility. Such water remains effluent until it acquires the characteristics of groundwater or surface water.

ARS 33-1816 states the term "notwithstanding any provision in the community documents." Even if the governing documents of a community say solar is not permitted, an association shall not prohibit the installation or use of a solar energy device. The association may adopt reasonable rules regarding the placement of a solar energy device. Should the association violate this statute, the court shall award reasonable attorney's fees and costs if the homeowner prevails against the board of directors of the association for not allowing the solar installation.

Regarding solar,

From ADOR regarding rentals over 30 days: What residential rental income is taxable? All payments made by the tenant or on behalf of the landlord are taxable. Common income sources are as follows:

Rent Nonrefundable and forfeited deposits Late payment fees Pet fees Federal rent subsidies (HUD) Fees passed on to the tenant: Common area fees Maintenance charges Homeowners association fees Landscaper maintenance Property tax Pool Service Repairs and/or improvements

Statute Of Frauds

Requires real estate contracts to be in writing and signed to be legally enforceable. Created in unambiguous language, it includes defined beginning and end dates to the agreement, as well as the time and conditions of payment, and the five elements to a valid contract. In Arizona, the Statute of Frauds is codified in ARS 44-101.

The definition of a residential rental, according to the Arizona Department of Revenue, is as follows:

Residential rental is the rental of real property for a period of more than 30 days for residential purposes only and not commercial purposes. It is important for buyers to become familiar with the taxing categories and requirements of the county of the property. Some cities will also tax the rental properties. With the advent of vacation rentals, the use of the Transaction Privilege Tax (TPT), a tax on the privilege of doing business in Arizona, most rentals will be required to pay taxes on their rentals. A tax license is required from the Arizona Department of Revenue (ADOR).

An associate broker managing the branch office may do all of the following:

Review and initial contracts, Supervise the activity of salespersons and associate brokers, Hire or sever a salesperson or associate broker, Sign compensation checks, Be a signer on the branch office trust account and property management trust account, Write checks from the broker's trust accounts, and Be responsible for the handling of all trust account funds administered by the branch manager.

STUDY INFO Commercial properties present more liability than do most residential properties. The properties have been used for business purposes, which may be undiscoverable to a lender in the process of foreclosure. What was the property used for? What did the tenants do with the property? Were toxins of any sorts used in the business? Waste disposal? Underground storage tanks? Liability under CERCLA is "strict," which means that parties can be held liable without regard to fault, and the liability is "joint and several," meaning that a responsible party can be held liable for all cleanup costs, although such party may be able seek contribution from other parties potentially responsible for the contamination.

STUDY INFO

While licensees will not be required to locate a property by using a full metes and bounds legal description for the Arizona state exam, there will be questions of a simple location nature. We will present to you several ways to determine the location of a particular piece of land using simplified examples. Let's begin with this legal description:

SW1/4, NE1/4, SE1/4, SE1/4, NW1/4, SW1/4

Arizona's statute of frauds, ARS 44-101, states that certain items must be in writing. The security agreements and the UCC requirement regarding commercial transactions only requires that certain transactions be in writing:

Sale of goods of $500 or more must be signed by the party to be charged Leases for personal property over $1,000 must be in writing Bank loan for commercial personal property must be in writing

Scorpions

Scorpions are prevalent in Arizona in many locations and are real pests to many homeowners. While about 40-60 species occur in Arizona, there are four identified species found in Arizona: The Arizona Bark Scorpion The Arizona stripetail scorpion The Arizona Giant Hairy Scorpion The Yellow Ground Scorpion Scorpions are nocturnal, predatory animals that feed on a variety of insects, spiders, centipedes, and other scorpions. Scorpions have a long gestation period from several months to over a year, after which the young are born live and ascend down their mother's back. The womb is a "birth basket." The average scorpion lives for about 5 years, but some have been known to live 25 years. All scorpions possess venom and can sting, but their natural tendencies are to hide and escape. Scorpions are almost impossible to manage with insecticides alone. They are easiest to find during the hours of 8 p.m. and 11 pm, especially when attempting to find the nest, because all scorpions fluoresce under UV light, including bright moonlight and standard black light bulbs.

Wetlands

Section 404 of the EPA Clean Water Act defines wetlands: Wetlands are areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas." Arizona has a number of wetland areas, including Sedona. The Sedona Wetlands Preserve is not only part of the city's wastewater treatment system, it is a park available for the enjoyment of area residents, especially by birding enthusiasts. In June 2015, White Amur Grass Carp fish were planted in the ponds of the Sedona Wetland Preserve to control weeds under a permit from Arizona Game and Fish Department. Fishing is not allowed.

Notice of Abandonment ARS 33-1305 of the ARLTA states that the landlord has a duty to mitigate damages. If the lease agreement is terminated by the tenant before the expiration of the lease term, in accordance with ARS 33-1373, the landlord may have a claim for unpaid rents in addition to a separate claim for actual damages. To mitigate damages for unpaid rent, Arizona law requires a landlord to take reasonable steps to re-rent the vacant property.

See Dushoff v. Phoenix Co., 23 Ariz. App. 238, 532 P.2d 180 (1975): Our holding (22 Ariz. App. at 449, 528 P.2d at 641) only requires that the landlord "make reasonable efforts to rent it (the property) at a fair rental." This requirement leaves intact the tenant's contractual obligations under the lease, subject to the effect of the landlord's failure to make reasonable efforts, if such be the fact. The tenant has a year's lease. The first day of the sixth month, the neighbor calls the property manager and says she thinks the neighbor moved out "last night." The property manager tries to call the tenant, but gets no answer. Next, the property manager goes over to the property and rings the doorbell. No answer. He peeks in the window and does not see any furniture in the living room. He returns to his office and begins the process to get the property back by starting with the notice of abandonment. Important: If the landlord enters the property without the 48-hour notice at this point, it may harm the landlord's position before the judge. It's important to follow the rules of proper noticing.

An assignment of "the contract" or of "all my rights under the contract" or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances... indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract. Example

Seller accepts a buyer's offer that is below the asking price and escrow is opened. Buyer finds out shortly after opening escrow that his offer of employment has been withdrawn and he won't be able to go through with the purchase. His agent mentions that he knows a buyer who might be willing to take his position through an assignment of the contract. The buyer, the assignor, agrees and assigns his rights to the contract to the assignee, the new buyer. As long as there is no adverse effect on the contract, and all terms and conditions are met according to the original agreement, the assignment is made because the seller has no right to deny an assignment. Should the assignment come with a request for a two-week extension of the closing date, the seller could deny the contract extension and the assignment might not take place. Novation is defined as a new contract and substitution of another party for one of the parties to the contract in the performances to be made under the contract, or substituting one contract for another.

If the seller has paid something in advance, such as flood insurance or property insurance, the settlement statement would show a credit to the seller and a debit to the buyer:

Seller—Arrears—Debit Seller—Advance—Credit The sale price of the property is a credit to the seller. The seller's loan payoff is a debit to the seller. The sale price of the property is a debit to the buyer. The buyer's loan is a credit to the buyer: Buyer—Arrears—Credit Buyer—Advance—Debit

A tenant who looks for potential tenants "shall not do any of the following:

Show a residential dwelling unit to a prospective lessee. Discuss terms or conditions of leasing a dwelling unit with a prospective lessee. Participate in the negotiation of the leasing of a dwelling unit." Advertise.

An Arizona LLC does not have to file annual reports, pay annual fees, or have annual meetings. An advantage of the LLC is that it is perpetual in nature, and it does have IRS considerations for taxation purposes:

Sole proprietorship if the LLC is owned by one individual or by a husband and wife who own the company as community property Disregarded entity if the LLC is owned by a single entity Partnership if the LLC is owned by two or more owners C corporation if the LLC files an IRS Form 8832 S corporation if the LLC files an IRS Form 2553

NOTE Note: In Arizona, under ARS 44-101, the Statute of Frauds, requires that "unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged...," an action cannot be heard in court to collect a commission. Under Young v. Rose, 286 p.3d 518 (Ariz. ct. app. 2012), the court concluded that an employment agreement must be signed by all parties, as required in ARS 32-2151.02.

Study info

Advertising The subdivider's advertising must be truthful, clearly represent the property, and consistent with the public disclosure report, under ARS 32-2183.01. A subdivider may hold a drawing or contest to "induce" a sale, so long as the following are present:

Subdivision has a current public disclosure report Subdivision is not under investigation Details of the contest or drawing are submitted to the Department before advertising Limitation of time, scope, and location is specified All material terms have been disclosed No fee charged participants to participate Participant in contest or drawing not required to attend a tour or sales presentation Subdivider is in compliance with all applicable laws and is the responsible party A time-share subdivider is required to turn over any advertising records to the Department, if requested, within 10 days. The Department then reviews the materials to determine if the advertising meets the statutes and rules. If not, the Department may take numerous steps against the subdivider, including a cease and desist order to discontinue sales.

Wood infestation

Termites and carpenter bees can cause great damage to a property. While there are at least 17 species of termites found in Arizona, only three cause any economic damage, and of the three, only the subterranean termite is the bane of the homeowner's existence. The difference between an ant and a termite during swarming season is that a termite will look like a little cigar, while an ant will have a "waist." Swarming is mating season and usually happens in the late spring through the summer. To see if a termite inspection or treatment has ever occurred on a property, Arizona residents may contact the Pest Management Division of the Department of Agriculture. Remediation is best accomplished by hiring a professional termite company. Many issues can be handled by spot treatment, while others may require "tenting" the property.

Arizona Department of Environmental Quality

The Arizona Department of Environmental Quality (ADEQ) was established by the Arizona Legislature in 1987, as was the state's comprehensive groundwater protection act, and the state's Water Quality Assurance Revolving Fund (WQARF, pronounced "Warf"). The agency legislates and enforces state environmental protection laws and a number of federal programs, such as the Clean Air Act, Safe Drinking Water Act, National Pollutant Discharge Elimination System program, and the Resource Conservation and Recovery Act program.

Unsubdivided and Subdivided Lands (cont.) Subdivision report

The Arizona Department of Real Estate regulates subdivided properties through a process known as the application for subdivision public report, which can be handled as a paper or an electronic submission. The report reminds the applicant: This application must be filed and a Disclosure report issued pursuant to A.R.S. § 32-2181 et. seq. prior to the sale or lease of subdivided lands as defined in A.R.S. §32-2101(56), unless an exemption has been issued pursuant to A.R.S. § 32-2181.01 or you are exempt pursuant to A.R.S. § 32-2181.02 or 32-2181.03

Ditches

The Central Arizona Project is Arizona's diversionary canal, which extends from Lake Havasu to Tucson, 336 miles. The canal carries 1.5 million acre-feet of Colorado River water from Lake Havasu City to points east, terminating 14 miles south of Tucson. Water from the canal reaches municipal users (the cities of Mesa, Phoenix, and Scottsdale, for example), agricultural irrigation districts such as the Maricopa-Stanfield Irrigation District, and twelve American Indian communities. Water is also conveyed to groundwater recharge facilities for storage underground. This water delivery system was created in response to two issues at the very heart of Arizona's water use. One is to address a 2.5 million acre-foot groundwater overdraft, and the second is to allow Arizona to draw its full allocation from the Colorado River, 2.8 million acre-feet annually.

Inspection Period Example

The Environmental Protection Agency (EPA) implemented a ban on the production and import of Freon R22 for use in air conditioners and heat pumps. Most sellers are not aware of this new rule if their air conditioner or heat pump has been working properly. Any unit built before 2010 uses Freon. The replacement cost of a new air conditioner unit or heat pump can run between $3,000 and $8,000.

Lease Agreements (cont.) Occupancy considerations Felonies Felonies must be considered on a case-by-case basis rather than by a blanket policy of no leasing to felons:

The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have a discriminatory effect on protected classes. HUD says that because of racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely to disproportionately affect African Americans and Hispanics. That doesn't mean you can't consider criminal history information when making housing decisions, but arbitrary and broad criminal history-related bans may violate the Fair Housing Act. —Texas REALTORS (https://www.texasrealestate.com/members/communications/texas-realtor-magazine/issues/april-2018/fair-housing-is-for-everyone/)

Real Estate Investment Trust (REIT)

The Internal Revenue Code (IRC) § 856(a) and (0c) set forth the requirements for an organization to qualify as a REIT: In general,... for purposes of this title, the term "real estate investment trust" means a corporation, trust, or association— (1) which is managed by one or more trustees or directors; (2) the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; (3) which (but for the provisions of this part) would be taxable as a domestic corporation; (4) which is neither (A) a financial institution referred to in section 582(c)(2), nor (B) an insurance company to which subchapter L applies; (5) the beneficial ownership of which is held by 100 or more persons; (6) subject to the provisions of subsection (k), which is not closely held (as determined under subsection (h)); and (7) which meets the requirements of subsection (c). Section c is about taxation, gains, interest, et cetera.

Rectangular Survey System and Public Land Survey System (There is no difference in the systems, only in the labels)

The Public Land Survey System (PLSS) is a way of subdividing and describing land in the United States. All lands in the public domain are subject to subdivision by this rectangular system of surveys, which is regulated by the U.S. Department of the Interior, Bureau of Land Management (BLM). It is also commonly known as the Rectangular Survey System or Government Survey System.

24 miles square. This 24-mile square is divided into areas 6 miles square called townships. Townships are further divided into 36 sections, each 1 mile square. The units are called quadrangles.

The Rectangular Survey System/Public Land Survey System provides for a unit of land approximately

Current ADEQ listed sites are as follows: Clarkdale, Arizona, residents are having their properties tested for arsenic and other heavy metals. ADEQ states the following:

The United Verde Soil Program VRP site consists of soil testing and remediation on eligible residential and commercial properties located in an area of Clarkdale, Ariz., near the former United Verde smelter. Contaminants of concern at the site are arsenic, copper and lead. The Remedial Action Work Plan provides details on soil removal and replacement and landscape restoration on properties where soil testing has shown metal concentrations exceeding risk-based cleanup levels. Harrison Road and Millmar Road in Tucson must remedy contaminated soil containing arsenic and myriad other heavy metals. The Estes Landfill in Phoenix, near Sky Harbor Airport is being monitored twice a year for arsenic and other contaminants. Dewey-Humboldt is the location of the Iron King mine and the Humboldt smelter. Residents in the area who have wells are reminded to have their wells tested often due to the possibility of arsenic washing into the aquifer. The EPA has cleaned up yards in the area that contained arsenic and/or lead. Remediation: Distillation, reverse osmosis, ion exchange, and activated alumina.

Disclosure Exception Example Situation 1: The sellers' home was invaded a couple of years before putting their house on the market. During the felony, their oldest child was murdered. In discussing the listing of the property with the salesperson they had selected, they asked how this would affect the sale.

The agent responded that this would not be a disclosable issue through the seller disclosure statement the seller would fill out; but, since it had been in the papers, the buyer might be aware of the situation. Only if directly asked would either of them have to respond with the truth.

member, attorney fees.

The association can sue a __________ for up to six years of past assessments, fines, fees, and __________.

constructive, assessments.

The association may file a "notice to lien" as ____________ notice that the member is behind in paying her______________.

Quadrangle

The base unit of the government survey system, 24 miles along each of four sides. A quadrangle is divided into 36 six-mile townships, each of which are divided into 36 one-mile sections. A quadrangle is a 24-mile square area made up of 16 townships. Each quadrangle contains 576 sections. 24 miles x 24 miles 368,640 acres Every section does not and cannot contain 640 acres, on account of the curvature of the earth and the impossibility of absolute accuracy in surveying. Therefore, correction lines are found every 24 miles, allowing the surveyors to make corrections from the principal meridian to again set the range lines at 6 miles apart. These lots are of irregular acreage.

Due Diligence

The buyer should expect many disclosures from the seller and ascertain the relevance to the purchase. One such disclosure a buyer should require from the seller is a certificate of elevation, which is issued by the NFIP. If the property is located near a stream or creek, or in a potential flood area, the certificate will be used by the insurance agent to determine the flood insurance premium for the buyer.

FIRPTA

The disposition of a U.S. real property interest by a foreign person (the seller) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests. Persons purchasing U.S. real property interests from foreign persons are required to withhold 15% of the any gain. The buyer is responsible for withholding the tax. The withholding normally occurs during escrow with the escrow officer handling the paperwork if the contract instructs such.

Joint ventures

When two companies want to form a new legal entity to engage in a mutually profitable transaction for a finite time, those parties can enter into a joint venture agreement. There are five required characteristics to form a joint venture: An agreement A common purpose A community of interest An equal right of control Participation in profits and losses

R4-28-502 and Substantive Policy Statement 2007.18 rev. explain additional requirements

The employing broker's name should be on top or bottom of flyer, clearly legible. On other promotional items, the employing broker's name must be on the front. The front page and all pages of a website must contain the employing broker's name without scrolling down on any device. Facebook must contain the employing broker's name. Tweets, texts, and advertising "thumbnails" are not required to contain employing broker's name, but if they link to a page, the employing broker's name must be displayed. Teams must advertise in such a way that the public understands that the team is part of the brokerage. At each use of the employing broker's name, the name must be spelled out in its entirety, including which branch and, if a franchise, include identification of the office. For example:Phoenix Mountain Properties, Gilbert BranchReMax Fine Properties - Flagstaff

Doctrine of Prior Appropriation

The first legislative definition of surface water rights in what is now the State of Arizona. Under the doctrine of prior appropriation, or the First in Time, First in Right doctrine, the first person to take a quantity of water from a property establishes priority, and has the right to determine who else is permitted to use the property's water.

Rufus Putnam

The first surveyor general of the United States (considered the "Father of Surveying") was

Active Management Areas (AMAs

The five ____________ include 80% of Arizona's population and 70% of the state's groundwater overdraft. The Act also established the 100-year assured water supply required by developers in order to acquire their public disclosure report from the Arizona Department of Real Estate.

Nontaxable Income

The following items are deemed nontaxable by the IRS: inheritances, gifts and bequests, cash rebates on items you purchase from a retailer, manufacturer or dealer, non-taxable alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, money that is reimbursed from qualifying adoptions, welfare payments.

The recovery fund pays only actual damages for acts by licensees that are in violation of license law or rules. According to ARS 32-2186(G),

The fund is not liable for damages or losses resulting from or caused by speculation, including lost profits and other unrealized losses; transactions for property that is located outside of this state; loans, notes, limited partnerships or other securities, regardless of whether the loss was caused by an investment in or was secured by real property; a judgment entered against a bonding company if the bonding company is not a principal in the underlying real estate transaction; a tenant's conduct or neglect; vandalism; natural causes; punitive damages; postjudgment interest; and undocumented transactions or losses.

45-251 to 45-264.

The general stream adjudications are judicial proceedings to determine the extent and priority of water rights in the Gila River system and in the Little Colorado River system. Thousands of claimants and water users are joined in these cases that will result in the Superior Court issuing a comprehensive final decree of water rights for both river systems. The adjudications are conducted pursuant to Arizona Revised Statutes sections

Inspection Period

The inspection period is one of the most crucial for buyers and sellers. Sellers do not know everything wrong with their properties, even if they had a presale inspection performed. During the transaction, the buyer, armed with disclosure information from the seller, also hires an inspector to give an opinion of property condition. Arizona home inspectors are certified by the state, under the Arizona Board of Technical Registration, and must adhere to ASHI, American Society of Home Inspectors, standards. The inspector provides the inspection report, which might or might not include items of concern. The buyer gets bids for things the buyer wants fixed by the seller. Upon receipt of the list of items to be fixed, the seller may agree to repair all, some, or none of the requested items. Then, having received the response of the seller, the buyer may continue with the transaction by accepting the seller's repair conditions, or terminate the agreement. Buyers who terminate an agreement during this period will need to provide a material reason for cancellation to get their earnest deposit returned to them. How well the negotiations go will determine if the transaction will move on to fruition.

ease Agreements (cont.) Application to Lease Property The Arizona REALTORS® form covers many very important issues that can be considered disclosure by the tenant to the landlord and substantiated in a credit/background check. This is widely used by the REALTOR® community because it has been created by attorneys, brokers, and leasing agents and tested in the courts. The importance of the application cannot be understated as the document is used as a good-faith statement from the tenant. Under ARS 33-1368, material noncompliance includes material falsification of the information provided on the rental application, and material falsification is grounds for termination within 10 days.

The landlord has the right to screen prospective applicants and set rental criteria. A landlord cannot knowingly refuse to rent to a person based on the fact that the tenant has minor children. ARS 33-1317. Exception is exclusive adult subdivisions of 62 years of age or older. Check with 55-plus communities to determine their restrictions about children. The landlord may adopt a reasonable occupancy limit. Two persons per bedroom in a dwelling unit is presumed to be reasonable. ARS 33-1317(F). The landlord may not refuse to rent to someone solely based on the fact that the tenant holds a medical marijuana card. ARS 36-2813 Remedy for a landlord if a tenant material falsifies the application is termination of the tenancy. Material falsification includes name, DOB, SS number, who will occupy, employer or wage, presence of pet, and anything that the materially relied upon contained or omitted from the application. ARS 33-1368(A)

Pass Through Income:

The most common types of pass-through entities are limited liability companies ("LLC"), S corporations, partnerships, and sole proprietorship. If the individual earns less than $157,500 or $315,000 if filing jointly and has "Qualified Business Income," the individual would qualify for the 20% pass-through deduction and will only pay tax on 80% of his or her "Qualified Business Income."

Asbestos

The name given to a group of minerals that occur naturally in the environment as bundles of fibers that can be separated into thin, durable threads. These fibers are resistant to heat, fire, and chemicals and do not conduct electricity. For these reasons, asbestos has been used widely in many industries. Asbestos was originally banned in 1989, but the Fifth Circuit Court of Appeals overturned the ban in 1991. The court said only uses established prior to 1989. EPA suggests that asbestos be kept well maintained and encapsulated and not to abate or remove. Asbestos fibers can lodge in the lungs and cause asbestosis and mesothelioma, to name a few health risks.

Designated Broker

The natural person who is licensed as a broker under ARS 32-2101.21 and carrying out the duties of the employing real estate, cemetery, or membership camping entity, or doing business as a sole proprietor.

The beneficiary deed is explained in ARS 33-404:

The owner of a property can record a beneficiary deed. Upon the death of the owner and presentation of the death certificate, the property will transfer to the named beneficiary. There is no probate. The deed must be recorded. The deed may be revoked at any time. If the owners want to change the beneficiary, they need only record a new deed and, at death, the most recent deed will be the effective deed. Any and all liens and encumbrances will be the liability of the beneficiary.

Case law in Arizona for "as is" transactions raises the level of due diligence to a high level. In S. Development Corp. v. Pima Capital Management Co. [201 Ariz. 10, 31 P.3rd 123 (2002), and notes at #59], the following determination was made:

The purchase contracts between two parties in equal bargaining positions were freely and fairly made. Both parties, with the aid of legal counsel, negotiated the specifications of commercial contracts and knowingly bargained for agreements that contained the "as is" clauses. When the agreements expressly placed the risk as to the existence of defects on the appellees [buyers], they should be expected to have been aware of the meaning of an "as is" sale and to have taken precautions to examine the property thoroughly before buying it.

Limited Representation

The real estate employing broker represents both the buyer and the seller in the same transaction and as such, cannot represent the interests of one party to the exclusion or detriment of the other party. Agreement form used by REALTORS® in Arizona.

Dual Agency

The real estate employing broker represents both the buyer and the seller in the same transaction through one salesperson or more than one salesperson. Allowed in Arizona if fully disclosed and agreed to by the principals.

Trust Deeds outlines

The relationships among the three parties. The trustee holds the naked title and the power of sale.

Groundwater rights 1

The right to divert groundwater in Arizona is governed by the state's doctrine of prior appropriation, "first in time, first in right." Irrigation rights are attached to the land that was historically irrigated and can be conveyed only with that land.* Type I nonirrigation grandfathered groundwater rights originate from retired irrigation acreage. The right runs with the land.* Type 2 nonirrigation grandfathered groundwater rights are freely transferable within the AMA. The right can be leased in whole or in part.* *All three can be extinguished to obtain credits that can be used for proving an assured 100-year water supply for a subdivision or development. Note: An irrigation grandfathered right confers the right to irrigate specific plots of land that had been irrigated with groundwater between 1975 and 1980. Land without an irrigation grandfathered right may not be irrigated with groundwater.

There are some exemptions to the public disclosure report requirement. ARS 32-2181.02 notes the exemptions to the subdivision public disclosure report:

The sale or lease in bulk of six or more lots, parcels or fractional interests to one buyer in one transaction. The sale or lease of lots or parcels of 160 acres or more. The sale or lease of parcels, lots, units or spaces that are zoned and restricted to commercial or industrial uses. Time-share developers must go through a similar application process to acquire a public disclosure report prior to selling a time-share interest or plan. See ARS 32-2197.02.

Arizona's homestead exemption

The scope of the Arizona homestead exemption is detailed in ARS 33-1101: Any person the age of 18 or over, married or single, who resides within the state may hold as a homestead exempt from attachment, execution, and forced sale, not exceeding $150,000 in value, any one of the following: House and the land upon which it resides Condominium or cooperative Mobile home Mobile home and the land upon which it resides, if you own the land as well The exemption only applies to nonconsensual liens or judgments and the homestead exemption's cash proceeds continue for 18 months after the date of the sale of the property or until the person establishes a new homestead with the proceeds, whichever period is shorter. Only one exemption at a time is allowed. The homestead exemption could come into play if a parent cosigns for a child and the business goes under. Perhaps the lienholder goes after the parent for the remaining monies on the building lease and receives a judgment from the courts. With that judgment, the lienholder can foreclose the parent's property, so long as there is enough cash to give the parent $150,000 from the proceeds. There will be no foreclosure by an unsecured creditor unless there is at least $150,000 in equity.

Vicarious Liability and Imputed Notice Under the principle of vicarious liability, buyers and sellers are liable for misrepresentations knowingly made by agents who are representing them in an agency capacity. Example

The seller knows the agent is not disclosing an infestation of insects behind a wall at the rear of the house. Later, the seller reads an email to which he is copied from the agent to a buyer stating the home has never had an insect problem. In this case, the seller is vicariously liable for the agent's actions. However, without knowledge of the misrepresentation, no vicarious liability applies. For example, suppose the seller did not know the agent was hiding the facts or if the agent had no reason to know of the infestation behind the wall because the seller never disclosed it, no vicarious liability applies. Imputed knowledge: The client is notified when his agent is notified and vice versa. Additionally, the agent will perform her obligation to the principal all knowledge relevant to the principal's protection and interest. An example: Prompt delivery of the signed purchase contract from listing agent back to the buyer's agent, forming an agreement upon "delivery and consent."

There are many material disclosures a seller might be required to give a buyer under common law in Arizona. To facilitate the disclosure of all required items, the Arizona REALTORS® created the Seller Property Disclosure Statement, known as the SPDS or "the spuds". It functions as a checklist for the seller to disclose a number of items known to be important to buyers. For example:

The seller must disclose to the buyer any property claims paid by the seller's insurance company over the past five years. The disclosure is a five-year history from the seller's insurance company. Sellers must disclose anything that might influence the price to be paid for the property. Solar lease agreements must be disclosed due to the fact that a buyer of a property with solar panels will have to qualify for the lease loan. The seller must disclose if the property is prone to flood or is in a flood zone, in the vicinity of a military airport or training area, near a public or private airport, in an expansive soil area, in a special taxing district, in a superfund area, or an area with environmental hazards such as arsenic or radon. Although the SPDS is available for use only by members of AAR, it is an excellent source of information regarding disclosures. Read the Seller Property Disclosure Statement carefully to familiarize yourself with these disclosures.

The CDC describes the dangers of mold:

The term "toxic mold" is not accurate. While certain molds are toxigenic, meaning they can produce toxins (specifically mycotoxins), the molds themselves are not toxic, or poisonous. Hazards presented by molds that may produce mycotoxins should be considered the same as other common molds which can grow in your house. There is always a little mold everywhere - in the air and on many surfaces. There are very few reports that toxigenic molds found inside homes can cause unique or rare health conditions such as pulmonary hemorrhage or memory loss. These case reports are rare, and a causal link between the presence of the toxigenic mold and these conditions has not been proven. EPA and the Arizona Department of Health Services are the regulatory departments that deal with mold issues. Remediation measure include eliminating water intrusion, leaks, and unventilated areas. Cleanup measures recommended by the Centers for Disease Control and Prevention (CDC) include using no more than 1 cup of bleach per gallon of water. Using bleach straight from the bottle will not be more effective.

Municipal use—87% of statewide water use is under mandatory conservation program requirements Industrial use—72% of statewide water use is under mandatory conservation program requirements Agricultural use—34% of statewide water use is under mandatory conservation program requirements In three of the five AMAs—Phoenix, Pinal, Prescott—the 2025 expectations are that these areas will be in rough balance between withdrawal and recharge. In the Pima AMA, the goal is to preserve the agricultural economy as long as possible. The Santa Cruz AMA's goal is to maintain a safe yield and to prevent local water tables from long-term declines.

The use of water by residents, facilities, golf courses, and providers is highly regulated by the Arizona Department of Water Resources in order to insure water for future generation.

Colorado Doctrine" of water law. The allocation of water rests upon the fundamental maxim "first in time, first in right." The first person to use water (called a "senior appropriator") acquires the right (called a "priority") to its future use as against later users (called "junior appropriators"). ~Findlaw

The use of water in many of the states in the western U.S. is governed by the doctrine of prior appropriation, also known as the

mandatory

There are _____________ associations and voluntary associations

that affects every member.

There are mandatory associations and voluntary associations. A mandatory association is one

When selling vacant land, the buyer must be made aware of the requirements of adding a waste disposal facility on the property if a sewer hookup is not available. Arizona does not allow cesspools, and, depending on the property's percolating underground water, a permit will be required for a conventional septic system or an alternative waste system. All of these can be expensive and are highly regulated at construction and at transfer. There are permit forms for the following:

There are permit forms for the following: Notice of Intent (NOI) Request for Discharge Uniform Site Investigation Report Alternative Design Request Manufacturer's Cert. of Conformance Product Listing of Proprietary & Other Products Notice of Transfer Inspection for Septic Systems

Staying a Foreclosure

There are situations that put a borrower behind in loan payments and catching up is difficult to do. With a deed of trust, the trustor may attempt to sell the house, and with a contract on the property, the beneficiary and the trustee may agree to stall the foreclosure. It there is no contract and the 90 days are running out, filing bankruptcy will stay the foreclosure. Bankruptcy is federal and the foreclosure of a deed of trust in the State of Arizona is local. After the bankruptcy court has given its decision as to which bankruptcy chapter will be accorded the borrower, the process may move forward.

Groundwater rights 2

There are three main exceptions to the general rule that groundwater rights in AMAs must be grandfathered. The first exception allows cities, towns, private water companies, and irrigation districts to pump groundwater to serve their customers. The other two exceptions are for exempt wells and operations such as mining, road construction, and general industrial use. Under the Code, "irrigate" means to apply water to two or more acres of land to produce plants for sale or human consumption or as feed for livestock.

Power of Attorney

There may be an individual who has a specific or general power of attorney to act as the agent for the owner. That person would be an attorney-in-fact. The power of attorney, or POA, may be specific to the transaction, a more general POA, or a durable POA. A general POA covers everything. A durable POA covers everything and continues after a person becomes incapacitated or incompetent. ARS 14-5501 is the statute that covers Arizona powers of attorney. An executor only has signatory power after the death of the owner and only as it affects probate assets.

Pocket Listing

This is a listing that is generally between a seller and a broker and not placed in the MLS or advertised by the broker. Many of these owners are not motivated to sell their properties, but will do so under the right circumstances. Pocket listings may or may not be in writing.

Breach of contract clause

This is the part of the contract that tells all parties the consequences for not dealing with the referenced issue in the cure notice, establishment of the breach, and the consequences for the breaching party, which may or may not include contract cancellation by the nonbreaching party.

Stigmatized Property

Three categories of disclosures not required of a seller, lessor, or agent during a real estate transaction unless specifically asked by a buyer. Murder, death, suicide, or any felony other than a situation where the house was used as a drug manufacturing site, HIV or AIDS, or in the vicinity of a sex offender.

Means test

To file chapter 7 bankruptcy, the debtor must pass the Arizona means test. The exemptions are as follows: If the debtor's monthly income is less than the Arizona median income, the debtor is eligible to file a chapter 7 bankruptcy. If the debts are not primarily consumer debts, then the debtor is exempt from the means test. A disabled veteran who incurred debt primarily during active duty or performing a homeland defense activity is exempt. an income qualification program that determines whether one is eligible for benefits under government programs reserved for lower-income groups The means test calculation will determine if the debtor can pay back a portion of unsecured debts through a chapter 13 bankruptcy. It's referred to as "wage earners bankruptcy" because it involves a restructuring and the repayment of all debts that are included in the bankruptcy.

Foreclosures and Forfeitures

To understand the loan process in Arizona, one must first understand the difference between a judicial foreclosure, a nonjudicial foreclosure, and a forfeiture. The choice of how the lender will be compensated in the event of a default is paramount. A foreclosure, whether judicial or nonjudicial, is a legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage or deed of trust note, or default of other terms in the mortgage or deed of trust document. The foreclosure procedure brings the rights of the parties to a conclusion and passes the title in the encumbered property to either the holder of the mortgage, the beneficiary of a deed of trust, or a third party, who may purchase the realty at the foreclosure sale. Depending on the priority of the foreclosed mortgage or deed of trust, the property may be sold free of all other encumbrances incurred prior to the sale. A forfeiture is the consequence of a failure to meet the terms of a contract; the property is removed from the defaulting party's ownership without compensation.

The Arizona Department of Revenue is the centralized collection point for TPT monies. Examples of TPT by classification and county are as follows:

Transient Lodging TPT (4-2018): Coconino County 6.90% Maricopa County 7.27% Yavapai County 6.325% If you run a vacation rental (a rental 29 days or less), you will be required to pay TPT.

Question #1 of 2 Question ID: 1150034 An employing broker is responsible for the acts of all associate brokers, salespersons, and other employees acting within the scope of their employment. True False

True

Question #1 of 2 Question ID: 1150036 A "blind ad" is one where the advertiser is anonymous to the reader. True False

True

Question #1 of 2 Question ID: 1150069 A salesperson or broker can represent more than one party to a transaction if he has the oral consent of all parties. True False

True

Question #1 of 2 Question ID: 1150097 Real estate can be classified into two categories: freehold and leasehold. True False

True

Question #1 of 2 Question ID: 1150129 A party who was under the influence of alcohol or drugs can still enforce a contract he has signed. True False

True

Question #1 of 2 Question ID: 1150131 All written or verbal offers to the seller must be presented until close or escrow or until the expiration of the listing agreement. True False

True

Question #1 of 2 Question ID: 1150138 A property management agreement must specify a beginning and an ending date. True False

True

Question #1 of 2 Question ID: 1150219 Scorpions are pests in Arizona but are almost impossible to manage with insecticides alone. True False

True

Question #1 of 2 Question ID: 1150264 Because many disagreements occur over encroachments and boundaries, it is highly recommended that the buyer hire a surveyor to determine the property boundaries as well as any encroachments which may exist. True False

True

Question #1 of 2 Question ID: 1150266 A subdivision or subdivided lands includes cooperatives and residential condominiums. True False

True

Question #1 of 4 Question ID: 1150032 If a licensee chooses to sever from the current employing broker without associating to a new broker, the license will become inactive. True False

True

Question #1 of 4 Question ID: 1150180 Arizona's "mailbox rule" says notice sent by registered or certified mail is deemed received either on the date the notice is actually received or five days after the date the notice is mailed, whichever occurs first. True False

True

Question #1 of 4 Question ID: 1150184 The Arizona Department of Real Estate will investigate a complaint against a property manager when that licensee uses a property management agreement that does not meet the minimum statutory requirements. True False

True

Question #2 of 2 Question ID: 1150130 A bilateral contract requires performance by both parties. True False

True

Question #2 of 2 Question ID: 1150132 A seller can withdraw a counteroffer before the buyer's agent delivers a signed agreement. True False

True

Question #2 of 2 Question ID: 1150220 Roof rats can be found throughout the Phoenix area and are prevalent on properties that have citrus trees. True False

True

Question #2 of 2 Question ID: 1386486 The Arizona REALTORS® Buyer-Broker Exclusive Employment Agreement is an example of a real estate employment agreement True False

True

Question #2 of 3 Question ID: 1150072 Arizona law requires sellers to disclose known facts that materially affect a property's value, even if those facts are not easily observable by the buyer. True False

True

Question #2 of 4 Question ID: 1150185 A move-in form allows the tenant to note the condition of the property at the commencement of the lease and can be used as a comparison at the termination of the tenancy. True False

True

Question #3 of 4 Question ID: 1150186 Under Arizona law, single-family homes are exempt from the bedbug disclosure statute. True False

True

Question #3 of 5 Question ID: 1168582 Designated brokers complete the Declarative Audit upon each license renewal on behalf of the employing broker. True False

True

a cure notice

When one party to a real estate contract is in danger of breach of contract, the other party may give notice of the potential breach and offer curative measures. The cure notice must be in writing. For this, REALTOR® members use

under ARS 33-1256

Under ______________, the association has a lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association's lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of and costs incurred with respect to those assessments, for a period of one year or in the amount $1,200 or more, whichever occurs first.

Agents are always anxious to get a new listing into MLS, but getting the property ready for showings takes time, sometimes weeks. With many states showing limited inventory, agents are beginning to advertise their properties as "coming soon." From a listing agent's point of view, this could be great! The listing agent can find a buyer before putting it into MLS and having to offer cooperation and compensation to the other agents in the area. It goes into MLS pending. What's wrong with this concept? According to NAR, situations that could be problematic can occur:

Use of coming soon status may not be in the seller's best interest but requires the seller's permission or consent. The seller has not executed a listing contract. The property is shown only to a select group of buyers. Offers are accepted before the property goes active on the MLS. Sellers are encouraged or compelled to accept offers from a buyer represented by the seller's own agent.

Requirements of a Lease Agreement (cont.) Unconscionability and Prohibited Provisions According to ARS 33-1315, a lease may not state that a tenant does any of the following:

Waive a right or forego a remedy Pay landlord's attorney fees (unless prevailing party provision) Limitation of liability or indemnification provision Waive or limit tenant's right to call police or emergency assistance or charge them a fee or penalty for doing so Remedies: If landlord deliberately includes a prohibited provision, the tenant may recover actual damages and not more than two month's rent. Note: This does not affect a landlord's right to evict a tenant for a breach. An example would be to include a term that allows the landlord access within 24 hours or requiring the tenant to pay a pet deposit for a service dog.

Groundwater

Water under the surface of the earth regardless of the geologic structure in which it is standing or moving. Does not include water flowing in underground streams with ascertainable beds and banks is water under the surface of the earth, regardless of the geologic structure in which it is standing or moving. Groundwater does not include water flowing in underground streams with ascertainable beds and banks. See ARS 45-101.

Surface Water

Waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, whether perennial or intermittent, floodwaters, wastewaters, or surplus water, and of lakes, ponds and springs on the surface.

Subflow

Waters that slowly find their way through the sand and gravel constituting the bed of the stream, or the lands under or immediately adjacent to the stream, and are themselves a part of the surface stream.

Tenants in common is for

anyone, with equal or unequal shares taken at any time. The shares may be sold, exchanged, encumbered, or leased. Should one of the parties die, the deceased's share goes to the party designated in the will.

Offer and Acceptance (cont.) Signatures

Whether using a real estate licensee or an attorney to sell the property, the buyers and the sellers will be required to sign the purchase agreement to indicate to each other that they have reached a meeting of the minds. There are a few things to consider in obtaining proper signatures for a property sales contract.

Unsubdivided and Subdivided Lands (cont.) Unimproved lots

While ARS 32-2185.01 regulates unimproved lots, these provisions are the most important for learners to remember: Unimproved lots may be rescinded within seven calendar days of execution of agreement by the buyer by sending written notice to developer. If a buyer of an unimproved lot or parcel has not inspected the lot or parcel prior to the execution of the purchase agreement, the buyer shall have a six-month period after the execution of the purchase agreement to inspect the lot or parcel and at the time of the inspection have the right to unilaterally rescind the purchase agreement. ARS 32-2183 states that the sale or lease of subdivided lands prior to issuance of the public report or failure to deliver the public report to the purchaser or lessee shall render the sale or lease rescindable within three years of the date of execution of the purchase or lease agreement by the purchaser or lessee. ARS 32-2185.02 states that no subdivided land may be sold without permanent access across the land which may be traversed by conventional motor vehicle, unless the provision is waived by the commissioner. The buyer has up to 3 years from the contract execution date to rescind the transaction.

Lot Reservations

While awaiting the application for the public disclosure report, the subdivider/developer may take lot reservations. Under ARS 32-2181.03, a single lot reservation may be taken with no more than $5,000 as a deposit. That deposit must be put into an escrow account. Upon issuance of the public disclosure report and delivery to the prospective buyer, the parties have seven business days to enter into a contract. At any time that the prospective buyer chooses to cancel the contract, the subdivider/developer has five business days to return the earnest deposit. It should be noted that the prospective buyer may cancel the reservation at any time prior to the delivery of the public disclosure report. Each lot reservation form must contain the following statement: "The state real estate department has not inspected or approved this project and no public report has yet been issued for the project. No offer to sell may be made and no offer to purchase may be accepted before issuance of a public report for the project."

Settlement

While many states use attorneys and have formal settlements where all parties gather to sign the final documents, Arizona does not. Attorneys and the buyers and sellers are seldom, if ever, together signing the final documents. Signing by the parties has been accomplished by the escrow officer meeting individually with each or by sending a traveling notary to one or both in order to have the final documents signed. When the parties are local, they may come in to sign the documents and to deposit any necessary funds.

Arizona has a high level of arsenic in the water, and it should be determined if the arsenic levels are at a healthy level during the inspections. ARS 45-593 requires the registration of the well's new owner. The statute continues to say the following:

Within 30 days after a change of ownership of real property, the new owner shall notify the director in writing of the existence of any open well or wells on the property which the new owner has discovered. Thereafter, the owner shall report the existence of any open well on the property within ten days after the owner discovers the well.

Legal Description

Written descriptions of the physical boundaries of property rights.

provide evidence to a broker's supervision and training of its agents, so it's important when defending against a legal claim, even if it's not required. By having a policies and procedures manual, an agent in violation of license law or other offense was informed of the standards prohibiting such actions.

Written office policies

Can an association foreclose a member's home?

Yes. ARS 33-1807 allows the association to file a "notice to lien" as constructive notice that the member is behind in paying their assessments. The association can sue a member for up to six years of past assessments, fines, fees and attorney fees. Collection proceedings must be brought within three years. The foreclosure process is a judicial procedure and may not begin until the homeowner is at least $1,200, or one year, past due in assessments.

Township, base line

__________ lines run parallel to the _________, which runs east to west

Range, meridian

__________ lines run parallel to the ___________, which runs north to south

ARS 33-1260

______________ is the section for rental governance, and it is similar to planned community laws.

ARS 33-1321

_________________covers both possession and termination. Arizona is unique in that the statute does not allow "first and last month's rent" as is custom in many other states. The statute provides for one month's rent and a security deposit of not more than 1.5 times the monthly rent. There is an allowance for a "reasonable" cleaning fee. The landlord may not ask for any additional rent payments from the tenant unless the tenant "voluntarily" offers to pay an additional amount. Any fees not noted "nonrefundable" must be part of the maximum of 1.5 times the monthly rent as the security deposit.

If the nonresident broker has an agent in Arizona, the broker must establish

a branch office and appoint a branch manager. A statement of how the licensee will be supervised must be sent to the Department. If the nonresident broker does not employ an agent in the State of Arizona, establishing a branch office is not necessary. For specific rules regarding out-of-state brokers, refer to R4-28-302.

Broker Duties, Supervision, and Control (cont.) Trust Account Recordkeeping and Accounting The files must be in

a chronological or other systemic manner for easy access and evaluation by the Department.

Uniform Commercial Code (UCC)

a comprehensive statutory scheme that includes laws that cover aspects of commercial transactions

Definitions and Statutes (cont.) Conveying property with a septic or alternative waste disposal system As of July 1, 2006, new Arizona Department of Environmental Quality rules require any person transferring a property served by an onsite wastewater treatment facility to have an inspection of the facility performed before the transfer of ownership. This requirement applies to any property served by

a conventional septic tank system or an alternative onsite system used instead. The required transfer form must show that the certification and pumping occurred within six months of transfer of title, and the buyer must complete the Notice of Transfer form and submit it with the applicable $50 fee within 15 days following the property transfer. This is usually handled by the escrow company.

Any real estate company must have both 1) a licensed employing broker (company); and 2)

a licensed designated broker (human) to carry out the duties of the brokerage firm.

If an LLC needs to hire a designated broker, that person must be a

a member of the LLC. While one person may be an LLC, it is important to contact an attorney for the ups and downs of a single-member LLC.

An act of misrepresentation or fraud by a licensee or a breach of real estate licensing statutes or rules, which harms a consumer, may cause

a payout from the recovery fund.

R4-28-502. Advertising by a Licensee A. A salesperson or broker acting as an agent shall not advertise property in a manner that implies that

no salesperson or broker is taking part in the offer for sale, lease, or exchange. It should be noted that there is no Arizona requirement that a phone number be used, only that the employing broker's name be on all advertisements.

A married couple can choose with right of survivorship or

not

An implied contract, unlike an express contract, is

not agreed to orally, written down, or signed. Instead, an implied contract is an agreement created by the actions and conduct of the parties. An implied contract is inferred when an express contract is absent and the behavior of the parties implies an agreement.

Dual agency, on the other hand, is

not an accepted practice everywhere. Some states allow it with proper disclosures or allow an arrangement that is similar to dual agency but referred to by a different name. Arizona allows the practice of disclosed dual agency in real estate transactions.

On August 9, 2017, the statutes changed to allow licensees to sell mobile and manufactured homes

not legally affixed to the land in manufactured housing communities. See ARS 41-4028.

The Rules of Advertising (cont.) R4-28-502. Rules for Teams "With team advertising it must be clear that the team is a part of the employing brokerage. For example, placing 'The (Team Name) Team'" at the top of the page in large letters with a much smaller brokerage symbol somewhere below is

not sufficient." It is further advised that the broker's name be consistent in size with that of the team name. All licensed team members are managed, supervised, and paid by the designated broker; however, unlicensed assistants are paid directly by those who hire them. While these unlicensed individuals may be included in team advertising, the ad must indicate they are not licensed.

An executory contract is

not yet been completed, or "in progress" as tasks are completed toward closing, such as title work.

Joint tenancy with right of survivorship means any

number of equal shares taken at the same time. Upon a death, the remainder of the parties share equally.

Contract Essentials and Terminology (cont.) Validity of a Contract A lawful agreement has the following components:

offer and acceptance Consideration Consent Competency and capacity Legal purpose

Any employing broker who has a designated broker, a licensed salesperson or associate broker, an unlicensed assistant, and one office is not required to have

office policies. Note that the employing broker is still required to follow the law and fulfill all required duties but isn't required to develop and maintain office policies (written or otherwise) to

A planned community under ARS 33-1802 is defined as a

real estate development that includes real estate owned and operated by [...] a nonprofit corporation or unincorporated association of owners, that is created for the purpose of managing, maintaining or improving the property and in which the owners of separately owned lots, parcels or units are mandatory Members and are required to pay assessments to the association for these purposes.

A contract needs a "time is of the essence" clause. The purpose of the clause is to

remind all parties that they have time constraints in the performance of their contractual duties. If a party is required to act within a period of time and the time passes without performance, that party may find himself or herself in breach of contract.

There is no________________ for the purchaser of a resale, single-family, improved property.

rescission period

The entity's name must first be approved by the Department. An application must be made by the broker to the Department asking for a specific name, and it is also wise to check with the Corporation Commission's "name search" for entity name availability before submitting to the Department. The Commissioner

reserves the right of approval in order to limit public confusion, and the approval could take up to 30 days (R4-28-103).

For an Arizona licensee, when the seller gives the licensee information that would affect the consideration to be paid by the buyer, the licensee, if asked, must

respond the same way: either don't answer the question or answer truthfully.

Upon death of the estate holder, the estate either

reverts back to the maker/owner as a reversionary estate, or to a remainderman, a third party. The holder of a life estate has the entire bundle of rights.

An associate broker is a licensee who has a broker's license and is working as a _______________ under an employing broker and who is managed and supervised by that entity's ______________

salesperson, designated broker

Taxable Income: Taxable income, generally speaking, is

the gross income of an individual or corporation, less any allowable tax deductions. Your taxable income is, in other words, the amount of your income that is subject to income tax

Commission payment to a departing licensee by the broker will be made according to

the independent contractor agreement entered into by the licensee and the employing broker or the agreement in effect at the time of the licensee's departure. For example, the agreement might indicate that the licensee is entitled to a full commission, a partial commission, or no commission if the licensee departs the brokerage before the transaction has closed.

Any additional occupants will require approval of the landlord. Any pets introduced to the property also require landlord approval. Should either of these occur, the landlord has the right to issue a 10-day material falsification notice to the tenant. It would outline the breach of the lease and give 10 days for the issue to be remedied by the tenant. If the breach is an additional occupant,

the landlord will want to run a background check on the new occupant, and if the person proves creditworthy, the landlord would require the lease be amended to include the new occupant.

If a member of the REALTOR® organization, the offer of cooperation and compensation comes through

the local association's MLS Each listing indicates a "co-broker" to an employing broker whose client purchases the listing broker's property. Co-brokerage does not mean the commission is an equal split, only that a percentage of the listing commission will be paid by the listing employing broker to the buyer's employing broker. If a non-realtor, or a nonmember of the MLS wants cooperation and compensation of the listing employing broker, the non-realtor, or the nonmember must get in writing an agreement stating cooperation and compensation, as the offer of cooperation and commission is only offered to those members of the local MLS.

An express contract exists when

the principals express, in writing or verbally, and voluntarily agree to the terms and conditions of a contract. Any signed contract is an express contract; all purchase contracts a licensee will be party to while practicing real estate will be express contracts.

A couple can take title as community property with right of survivorship so that

the surviving spouse will take title to the entire property upon the death of the spouse.

A deed of trust has three participants:

the trustor, the trustee, and the beneficiary.

"Condominium" means real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of the separate portions. Real estate is not a condominium unless

the undivided interests in the common elements are vested in the unit owners. ARS 33-1260 is the statute governing resale of units:

Misrepresentation & Fraud The courts in Arizona have defined misrepresentation in numerous cases. Misrepresentation is important in the discussion of disclosure because the purpose of disclosure is

to allow an individual to have enough information to make an informed decision. When items that require disclosure are misrepresented, that individual's ability to make an informed decision is obstructed. Arizona courts are prone to reward plaintiffs when it is apparent that there has been an attempt to deceive, which is usually determined to be fraud

A major difference between the mortgage and the deed of trust is the

trustee

The major types of property use include

vacant land, residential, commercial, industrial, agricultural, centrally valued properties, natural resources, personal property, and government-owned property.

In 1980, the Groundwater Management Act

was adopted and it established the Arizona Department of Water Resources. Four Active Management Areas (AMAs) were created: Phoenix, Tucson, Pinal, and Prescott. In 1994 Santa Cruz was added.