Real Estate Test (Arizona)

Statutory Right of Redemption

(Six months) refers to a mortgagor's right to regain their ownership of property that has been foreclosed.

Actions by licensees to collect compensation

* An action for collection of compensation earned may be taken in the courts of Arizona. Civil court. * To begin the action, the licensee must prove that they were licensed at the time the claim arose. *The commissioner shall not entertain complaints regarding purely civil disputes between licensees concerning the earning, splitting or nonpayment of compensation.

Personal Assistants

* Assistants may be licensed or unlicensed. * Unlicensed Assistants: 1. May not be compensated on any basis that relies on the ultimate sale of a property. 2. Activities are limited to: - limited telephone duties. - assisting a licensee at an open house. - unlocking a property for a licensee. - delivering documents.

Restrictions on Compensation

* Real estate brokers may receive compensation from anyone and may pay: 1. Their own licensed salespeople and associate brokers. 2. Other licensed designated brokers.

Grounds for Denial, Suspension, or Revocation of Licenses

* The statue lists over 30 reasons (some very specific, others very general) why a license could be denied, suspended or revoked, including any violation of the Commissioner's Rules. *In a disciplinary action hearing the licensee may be represented by an attorney. * The Commissioner may issue a Cease and Desist Order to someone found violating any "act, practice or transaction" required by statue of Commissioner's Rules.

R/E Salesperson Qualifications

- 18 years old - 90 hour licensing course within last 10 years - Pass both a school and state examination

Real Estate Commissioner Qualifications

- 3 years administrative experience. - 5 years experience in real estate or a related field.

Broker Qualifications

- 3 years experience in last 5 years as a licensee or equivalent experience in Arizona or elsewhere. - 90 hour broker relicensing course within last 10 years. - Pass both a school and state examination.

Real Estate Commissioner

- Appointed by Governor. - Cannot hold an active real estate license once appointed.

Activation of License

- Brokers and salespeople have 1 year from the date of the examination to become licensed. - An original license is issued for 2 years from the end of the month of activation. - Prior to becoming licensed, applicants for a: (1) salespersons's license must complete 6 hours of instruction in contract writing; (2) broker's license must attend a broker management clinic.

Reinstate after default and trustee's sale has been recorded

90 days

Lien

A claim against property to secure a debt; money encumbrance.

Satisfaction of Mortgage

A document generated and signed by a mortgage lender, acknowledging that the borrower has paid off the mortgage loan in full and that the mortgage is not a lien on the property.

Deficiency Judgement

A judgment obtained by a lender when a foreclosure sale brings less than the amount owed.

Real Estate Salesperson

A person engaged to represent a real estate broker.

Planned community

A real estate development which includes real estate owned by an association created for the purpose of managing, maintain or improving the property, and in which the owners of separately owned parcels are mandatory members and required to pay association assessments.

Public Report (Subdivision Disclosure Report)

A statement of important facts relating to a subdivision which allows the purchaser to make an informed decision regarding the property.

Temporary Broker's License

A temporary broker's license may be issued for a period not to exceed 90 days to the surviving spouse, next of kin, or personal representative of the deceased broker or a broker who is disabled or incompetent.

Voluntary Liens

A voluntary ten is a lien placed on a property with the owner's consent. The three types of voluntary liens in Arizona are mortgages, trust deeds, and agreements of sale. All three hypothecate real estate as security for a debt, but each dictates a different foreclosure procedure.

Renewal of Broker & Salesperson's Licenses

A. - Licenses must be renewed every 2 years by the last business day of the month of activation. B. - If the license is not renewed it is EXPIRED. Licensees have 12 months after expiration to renew but may not engage in activities requiring a license during that period. A late fee is charged for late renewals. If not renewed in that time period, the licensee must retake the state exam and may need additional pre-license education. C. - Salespersons and Associate Brokers must attend at least 24 hours of continuing education every 2 years. Designated Brokers, Self-Employed Brokers, and Associate Brokers with delegated authority must attend 30 hours, including 3 Broker Management Clinics, every 2 years. Continuing education may be taken either in classroom or at home through computer based education.

Trust Account Requirements

A. Deposits must be made by deposit slips. B. Receipts or other documents shall: 1. Identify each transaction 2. Contain the date and amount of deposit 3. State the names of the parties to the transaction. Note: The broker's name need not appear on the receipt.

Ad Valorem Tax (Ad Valorem)

According to value.

Property Management Accounts

All property management accounts shall be designated as trust accounts.

Limited Property Value (LPV)

All real property taxes are calculated based on the LPV.

Affidavit of Disclosure

Applies to any property (improved or unimproved) that is not located within a municipality or recorded subdivision. Requires disclosure info regarding water, sewer or septic tanks etc.

Arizona Residential Landlord and Tenant Act

Applies to the rental of dwelling units.

Actual Laws

Articles 1-10 of Title 32, Chapter 20 of the Arizona Revised Statues. (Pertain's to real estate & realtors)

Order of Hire

Client -> Broker -> Salesperson (me)

Right to Rescind

Consumers can cancel the following sales or services after the transaction is completed: Telephone Solicitation: You can cancel the order within three (3) business days from the delivery of the merchandise or premium (gift, bonus, prize or award) whichever is later.

Sheriffs Deed

Conveys full title.

Full Cash Value (FCV)

Determined using standard appraisal techniques at the beginning of each calendar year for the next tax year. Once established, the property owner is notified by mail of the FCV and assessed value.

Brokers to keep records

Earnest money type stated in contracts. * A broker must keep records of all transactions handled for a period of at least 5 years from the termination of the transaction. * The records must be open at all reasonable times for inspection by the Commissioner or their representative.

Real Estate Recovery Fund

Established to protect parties harmed due to reliance on a licensee where the licensee either: * Performed acts that required a license. *Committed fraud or misrepresentation while acting as a principal in the purchase or sale of real property.

Default

Failure to comply with any terms of the note or mortgage.

Mechanic's Lien takes priority

From the day work begins.

Sheriff's Sale

Generally the last step in the foreclosure process after the homeowner has exhausted all his/her options to avoid defaulting on a mortgage.

ARTICLE XXVI (26) - of the Arizona Constitution

Gives licensees the authority to prepare all types of real estate contracts, but only... - When preparation is incidental to their function as agent and - Agent does not charge for preparation.

Police Power

Gives the State the right to license brokers and salespeople.

Real Estate Advisory Board

Has 10 Members: - 2 Real Estate Brokers - 2 Subdividers - 3 Persons engaged in residential real estate for the last 5 years, one must be involved in multi-family residential property management. - 3 Public members. - Appointed by Governor and meet quarterly. - Receive no compensation.

Real Estate Taxes (in Arizona)

Have #1 Priority over all liens.

Distraint

Holding a tenant's personal propter for back rent is abolished in Arizona.

Delinquent Tax - Once delinquent

Interest accrues at 16%

Hypothecation

Is a pledge of real property as security without giving possession of the property to the lender.

Real Estate Timeshare

Is a share or interest in real property (usually in a resort condominium or hotel) with a right to use the facility for a certain period of time.

lis pendens

Is a written notice that a lawsuit has been filed concerning real estate.

Trustee's Deed

Is delivered to the highest bidder. No redemption period.

Judgement Liens in AZ

Is established when recorded. Must be renewed every 5 years. Could be revealed from title report, county recorder's record or credit reports.

Subdivision

Is land which is divided into 6 or more lots, parcels or fractional interests created for sale or lease.

Deed of Reconveyance

Is the document that evidences the release of a deed of trust. This must be done within 30 days of payoff.

Sheriff's Certificate of Sale

It is a document issued by the court at a judicial sale, entitling the purchaser to receive a deed once the court approves the purchase.

Title Theory

Legal title is conveyed to the lender.

Mortgage in Default (Judicial Foreclosure)

Lender's remedy is forced sale through a Judicial Foreclosure Action.

Mechanic's Liens

Lien for labor or material supplied to a property.

Tax Calculation Formula

Limited property value X Assessed value ratio = Assessed Value X Tax rate = Real property taxes

Real Estate Employment Agreements

Listing & Buyer Broker Agreements * An employment agreement is a contract hiring a broker to buy or sell real property for compensation or commission.

Lot Reservations

Means an expression of interest by a prospective purchaser in buying at some time in the future a subdivided or unsubdivided lot, unit or parcel in this state.

Affidavit of affixture

Mobile Manufactured Homes in AZ go from personal property to real property.

HOA assessment Liens

Must be foreclosed judicially. Subordinate priority to fist mortgage, deed of trust and agreement of sale.

Redemption period after non judicial foreclosure

NO redemption

Landlord Obligations

No security deposits more than 1 1/2 months rent. Deposits are refundable unless stated. to apply deposits to damage, landlord must deliver itemized written statement 14 days prior to termination date. Landlord is subject to 2x amount of security deposit as damages if landlord does not comply.

Commissioner's Rules

Not law but have the force and effect of law on licensees.

When are taxes paid: OWE NO MORE MONEY

October 1 Due date (1st half) November 1 Delinquent March 1 Due date (2nd half) May 1 Delinquent

Real Estate Commissioner - Duties: (PAMI)

P- PROMULGATE the Commissioner's Rules through public process. A- AUDIT the books and records of licensees. M - MANAGE the daily operation of the Real estate Department; hire and fire ADRE employees. I-INVESTIGATE written complaints against licensees.

Landlord must disclose:

Person authorized to manage premises. Owner or owners agent for service process. A free landlord and tenant act copy from az dept of housing.

Individuals not required to be licensed

Persons (including officers of a corporation) buying, selling, leasing, renting, or exchanging their own or corporate property.

Property Management Parties

Property Owner - Investor who employs the broker. Broker - Is the property manger

Statue of Frauds

Requires real estate contracts to be in writing to be enforceable.

Forfeiture Action

Seller must give buyer a grace period to reinstate the payments. Grace period may be as short at 30 days or as long as 9 months. After the grace period seller proceeds.

Treasure's Sale

Sells tax lien at auction and issues a "certificate of purchase" to bidder.

Taxes are paid

Semi-annually in arrears on a Fiscal Basis

Assessed Value Ratio

Set by law: 10% Owner Occupied Residential Property 10% Residential Income Property 15% Vacant Land 18% Commercial Property

Affidavit of Value

Shows the sales price and is required to record the deed upon property.

Real Estate Broker

Someone who, for another and for compensation, performs real estate services. -Sole Prop Broker - Designated broker of Corp./ Ptsp, or LLC - Associate Broker

Arizona water law (2 categories)

Surface & ground

The salesperson represents

The Broker

REAL ESTATE CODE

The cornerstone of the National Association of Realtors ethics training.

Lien Theory

The mortgage or trust deed does not convey any ownership to the lender.

Right of Reinstatement

Truster (borrower) can cure default by paying back payments (plus cost and penalties) at any time before the forced sale.

Disposition of Funds

Unless otherwise provided in writing by all parties to a transaction, a broker must immediately place all monies entrusted to the broker in either a neutral escrow depository in Arizona or in a trust fund account with a federally insured depository located in Arizona.

Recovery Fund Fees

When originating a license: 1. Broker pays $20 2. Salesperson pays $10 When renewing a license, if the fund has dipped below $600,000 on June 30th: 1. Broker pays $20 2. Sales person pays $10

Taxes are levied annually

and become a lien in advance for the calendar year on the 1st Monday in January.

mortgagOR

bOrrOwer

2 days notice

before landlord enters the premises. (unless emergency)

Landlord must:

comply with health, safety & business codes. Keep premises fit, habitable and safe. maintain mechanical equipment in working order. Provide trash receptacles and trash removal. Provide running hot/cold water etc.

Who can sign check in property management?

designated broker licensee of the broker employee of the broker

Homestead Exemption

exempts a portion of a homeowners equity from attachment and execution of a forced sale due to nonpayment of judgment. Max exemption is $150,000. Must be primary residence. Does not need to be recorded.

"Attorney-in-Fact"

holding a specific power of attorney acting is an isolation transaction.

Redemption after a sheriffs sale

is 6 months

Notice of Default

is a notification given to a borrower stating that he or she has not made their payments by the predetermined deadline, or is otherwise in default on the mortgage contract.

Trustee's Sale

is a public auction at which a piece of real estate is sold.

Property Manager

is concerned with getting the highest net return on the owners investment and protecting the owner from foreseeable risk.

MortgagEE

lEndEr

Persons conducting real estate actions must be

licensed.

5 days

tenant may deliver notice to terminate lease for breaches affecting health and safety such as hazardous materials, no heat or air conditioning.

10 days

tenant may deliver notice to terminate lease for other breaches

Equity of Redemption

the right of a mortgagor over the mortgaged property, especially the right to redeem the property on payment of the principal, interest, and costs.

Contractor or material supplier must deliver preliminary lien notice

to the property owner within 20 days of commencement of work or when material is delivered.

Brokers in Arizona are not required to maintain a trust account

unless they are engaged in property management.

Tenant Obligations:

use premises in safe manner. keep premises clean. use mechanical equipment in reasonable manner. not destroy premises. Do not destroy neighbors. follow rules and regulations established by landlord for tenants welfare.

Orignal and sub-contractors must record the mechanic lien

within 120 days of completion of work.