Section 1: Arizona Statutes and Rules Flashcards by Delia Archer

Arizona Brief History:
* Arizona, the Grand Canyon state, achieved statehood on February 14, ______ , the last of the 48 contiguous United States to be admitted to the union.
* The State’s Constitution has 30 Articles in total.

1912

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Arizona Brief History:
* All Arizona specific real estate statutes are found in Title ___, Chapter ___.
* Article ____ deals with the Department of Real Estate.

Title 32 Chapter 20

Article 26

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Sources of Arizona Real Estate Law:
* The Arizona State Constitution:
www.azleg.gov/Constitution.asp

The ______ is the name given to the statutory laws in the state of Arizona:
www.azleg.state.az.us/ArizonaRevisedStatutes.asp
The _______ is where the official rules of the state of Arizona are published.
State agencies, boards and commissions (including ADRE), are given rulemaking
authority from the state LEGISLATURE:
www.azsos.gov/public_services/table_of_contents.htm)
IMPORTANT: A digital copy of the Arizona Real Estate Law Book can be found ONLINE:
AZ Department of Real Estate.
website:www.re.state.az.us/lawbook/Documents/LawBook_Revised.pdf

Arizona Revised Statutes A.R.S.

Arizona Administrative Code A.A.C.

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This is One of the TWO Main Sources Of Arizona “Real Estate” Law:
* ____________ Laws = Part of English law that is derived from custom and judicial precedent rather than statutes.
o This is law developed by judges through decisions of courts and similar tribunals that decide individual cases. Also known as _______ Law.
* Example of common law in Arizona real estate, it is “COMMON” for the buyer to CHOOSE which title company to use, but it is still _______.

Common Laws

Case Law

Negotiable

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This is One of the TWO Main Sources Of Arizona “Real Estate” Law:
* ____ Laws = Written laws adopted by a legislative body.
* IMPORTANT: These are laws that are divided into Federal, State and then Local Laws.
* Federal Laws are passed by ______ (Think Fair Housing Laws, Etc.)

Statute

Congress

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The TWO Main Sources Of Arizona “Real Estate” Law:
IMPORTANT:
ARIZONA recognizes all _______ laws as being the SAME as a statutory law, UNLESS there is a ________ law that is recorded to state otherwise.

Common

Statutory

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Arizona “Real Estate” Law:
* A.R.S. = ____________________

IMPORTANT: These statutes are adopted through the legislative process or regulations issued by the _______ branch of government and apply to EVERYONE in ARIZONA.

These laws give individual State Agencies the authority to make rules and the powers to enforce them:
The Arizona Department of Real Estate (ADRE) under the commissioner, can _______ and _______ Rules based on POWER Granted to the Commissioner under the ARS.

Arizona Revised Statues

Executive

Create and Enforce

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Arizona “Real Estate” Law:
IMPORTANT: AZ Constitution – Article ______: “Gives real estate licensees the power to draft or write contracts related to the sale of real estate in AZ.

IMPORTANT: ” We as “real estate agents” can NOT ______ a fee for these things or we would be considered acting as attorneys and this is illegal! www.azleg.gov

This is UNIQUE TO ________ and eliminates the need for attorneys as is customary in other states especially Midwest and back East States.

AZ Constitution – Article XXVI (26)

Charge

Arizona

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What Real Estate Agency Is This?
IMPORTANT:
Main Purpose is to “PROTECT THE GENERAL PUBLIC”

The Department of Real Estate (ADRE)

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What Real Estate Agency Is This?
* Regulates the sale of subdivisions, un-subdivided lands, timeshares, condominiums, membership campgrounds, and cemeteries.
* It approves and monitors pre-licensing instruction and testing and continuing education courses.

The Department of Real Estate (ADRE)

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What Real Estate Agency Is This?
* It maintains oversight of approved schools to ensure the quality content of their courses, the competence of their instructors, and the quality and timeliness of the materials being taught.

The Department of Real Estate (ADRE)

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What Real Estate Agency Is This?
* The Department oversees the activities of licensees, investigates complaints against licensees and land developers, and participates in administrative hearings
pertaining to their conduct.

The Department of Real Estate (ADRE)

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Requirements for The Arizona Real Estate Commissioner:
* Must be APPOINTED by the _______
* Must have _____ years experience in real estate, banking, mortgage, title
* Must have _____ years experience in Administration Duties
IMPORTANT: Commissioner ______ have an Active Real Estate License
IMPORTANT: No ________ on the Term of office = Serves at the Governor’s Pleasure
* Usually has an EXTENSIVE background in AZ Real Estate

Governor

5 Years

3 Years

CANNOT

Limit

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Commissioner Responsibilities:
* Adopts new rules and regulations which are found in the _______ Code. Even though these “rules” are NOT laws, they carry the same force and effect.
* Commissioner hires, fires and manages all _______ employees.

Arizona Administrative Code

The Department of Real Estate (ADRE)

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Commissioner Responsibilities:
* Oversees and manages the 8 ADRE Divisions:
1. Office of the _______
2. Auditing
3. _______ Services
4. Education
5. _______ and Compliance
6. Investigations
7. Licensing
8. _______ Fund

Commissioner

Development

Enforcement

Recovery

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The Commissioner oversees and manages what 8 ADRE Divisions?

Office of the Commissioner
Auditing
Development Services
Education
Enforcement and Compliance
Investigations
Licensing
Recovery Fund

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ADRE Divisions Explained:
o The Commissioner CAN investigate a licensee, broker, or entity at _____ time. I.e. compliance, Trust Accounts, record keeping, etc.

What ADRE Division is this?

ANY

Audits 6

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ADRE Divisions Explained:
o This division oversees all _____ licensing requirements

What ADRE Division is this?

New

Licensing 4

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ADRE Divisions Explained:
o Oversee the registration of proposed new subdivisions
o Issue the Public Reports (i.e. ________ Reports)
o Monitor subdivisions for compliance and adherence to Public Report
o The public report is a “disclosure document” before purchase.

What ADRE Division is this?

Subdivision Disclosure Reports

Subdivisions

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ADRE Divisions Explained:
o Responsible for making recommendations for any disciplinary actions against licensee/broker/entity including suspensions or revocations.
o Publish a quarterly bulletin for the general public – can be found on ADRE website.

What ADRE Division is this?

Administrative Actions Divisions

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ADRE Divisions Explained:
o IMPORTANT: The Commissioner MUST investigate any time a “_______” complaint has been filed with the office which many times, is sent back to broker of agent. (many times, sent back to broker of agent for follow up or a review from the brokerage on behalf of ADRE if the violation is minor)

Investigations & Audits 6

Written

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ADRE Divisions Explained:
o Continuing education overview
o New schools, instructors and materials review

What ADRE Division is this?

Education 7

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ADRE Divisions Explained:
o Issues _______ Policy Statements
* _______ ONLY, they are designed to inform the public of changes or implementations of new policies in the Department of Real Estate.

What ADRE Division is this?

Advisory ONLY

Substantive

Administrative Actions Divisions

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Commissioners Limitations:
* The Department of Real Estate DOES NOT have the authority to investigate:
o _________ - Most local jurisdictions (City or County) have a ______ that is responsible for these types of disputes or complaints.

What is the legal term?

Landlord & Tenant Disputes

Department

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Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o _______ – The Arizona Registrar of _______ has jurisdiction concerning these types of defects. What is the legal term?

Construction defects Contractors

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o _______ – Things that are NOT ethical BUT are NOT necessarily _______. What is the legal term?

Ethics violations Illegal

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o _______ violations - are civil and require _______ action; contact your local __________. What is the legal term?

Homeowners Association (HOA) violations Civil HOA

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o _______ violations - are civil and require _______ action; contact your ______ or legal counsel. What is the legal term?

CC&R violations [CC&R means Covenants, Conditions and Restrictions. The purpose of CC&Rs are to protect, preserve and enhance the property values within the community. These restrictions and requirements can set limits on property maintenance, decorations, pets and more.] Civil HOA

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o ________ – The Arizona Department of ________ regulates Escrow and Mortgage institutions in Arizona. What is this legal term?

Loan, Interest Rate, or Escrow problems Financial Institutions

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o ________ – The Arizona Department of _______ regulates Title Insurance institutions and transactions in Arizona. What is this legal term?

Title Insurance issues Insurance

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o ________ – The Arizona Department of _______ regulates Homeowner’s Insurance institutions in Arizona. What is this legal term?

Homeowner’s Insurance (HOI) Insurance

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o _______ - For the holding or improper payment of escrow money by escrow/title companies, If you are a victim CONTACT The Arizona Department of _________. What is this legal term?

Escrow money issues Financial Institutions

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o _______ - Disputes over commission are considered _______ disputes What is this legal term?

Commission disputes between Licensees CIVIL

Commissioners Limitations: The Department of Real Estate DOES NOT have the authority to investigate: o ________ - Acts including but not limited to trespassing, assault, theft, etc. What is this legal term?

Criminal

Enforcement Agencies: What agency monitors the Commissioner?

The Real Estate Advisory Board

Enforcement Agencies: This agency was established by the Legislature to provide the Real Estate Commissioner with such recommendations as it deems necessary and beneficial to the best interests of the public. * This agency shall also provide recommendations on specific questions or proposals as requested by the Commissioner. What is this Agency?

The Arizona Real Estate Advisory Board which monitors the Commissioner.

Enforcement Agencies: The board is comprised of _______ members appointed by the Governor. o The term of office of each member is ______ years. * The Advisory Board is required by Statute to meet at least ONCE every ________. * Members receive NO ________. What is this Agency?

10 6 Years QUARTER Compensation The Arizona Real Estate Advisory Board which monitors the Commissioner.

Enforcement Agencies: 10 Member Board MUST all be from ______: o TWO members, each of whom is a real estate broker with at least ______ years of brokerage – MUST be from different _______ in AZ. o THREE members, two residential real estate brokers and one of whom has been engaged in _______ residential rental property management. o TWO members who are ______ of real property. o THREE _______ members.

Arizona FIVE Counties Multi-family Sub-Divider Public The Arizona Real Estate Advisory Board which monitors the Commissioner.

Licensing Procedures and Facts: * All applicants for an original real estate, cemetery or membership camping. * Arizona is a “________” State meaning that if you are licensed in another state and reside now in AZ, you must pass the ARIZONA portion of the Exam.

Non-Reciprocal

Licensing Procedures and Facts: * The Pre-licensure education is valid for ______ years from passing the SCHOOL exam. * Salesperson License application must occur within ______ year(s) from the date of passing the STATE examination, or the state exam must be retaken and passing score reports presented.

Ten Years One Year

Who is REQUIRED to Have a Real Estate License? A person must be licensed if they are to advertise or ‘act’ as a real estate licensee in the State of Arizona IF they perform or offer to perform the following services FOR COMPENSATION or PROMISE of COMPENSATION: o Selling/Listing/Purchasing/_______ on the exchange o Leasing or ________ of Real Estate o ________ of Land or Real Estate

Negotiation Renting Auctioning

Who is REQUIRED to Have a Real Estate License? A person must be licensed if they are to advertise or ‘act’ as a real estate licensee in the State of Arizona IF they perform or offer to perform the following services FOR COMPENSATION or PROMISE of COMPENSATION: o Selling of __________, campground memberships or cemetery plots. - Person with an active real estate license does NOT need to have a separate license for campgrounds/cemetery.

Timeshares

Who is REQUIRED to Have a Real Estate License? A person must be licensed if they are to advertise or ‘act’ as a real estate licensee in the State of Arizona IF they perform or offer to perform the following services FOR COMPENSATION or PROMISE of COMPENSATION: o Managing property for others IF their bonuses are more than ______% of their salary.

50%

If you are caught impersonating a licensee or acting WITHOUT a license, it’s a ________!

Felony

Who is NOT required to have a license?(Exemptions) * Selling for yourself (______). IMPORTANT: Attorney representing a client – where attorney DOES NOT RECEIVE _______ from the SALE Related to job duties such as; property liquidation of assets, bankruptcy, and foreclosures.

FSBO Commission

Who is NOT required to have a license? (Exemptions) * Auctioneers of ______ property. * _____ acting under a trust agreement or a deed of trust.

Personal Trustee

Who is NOT required to have a license? (Exemptions) * Executor of a will/Attorney in fact with a ___ of Attorney. * Property managers who manages only ______ property on behalf of someone else. (That one property could be multiple units, or apartment managers).

Power ONE

Who is NOT required to have a license? (Exemptions) IMPORTANT: Real estate _______ – CAN NOT discuss PRICE, TERMS, or AVAILABILITY. * A ______ may have an unlicensed person perform clerical, bookkeeping, accounting and other administrative and support duties, so long as they are NOT engaged in any other acts requiring a license.

Assistants Broker

General Licensing Requirements: * Candidates for AZ Salesperson must: o Must be 18 years or older (No maximum age Limit) o Must prove legal presence in US > Be a Resident of Any State – No Residency Requirement o Complete ____ hours of education with an approved real estate school o Pass a Certified Real Estate School Exam o Pass the State of Arizona Real Estate Exam o Must take a _____ hour Intro to Contract Writing Class o It’s legal to be ________. As an active licensee a P.C. or a PLLC, which must be your name can be paid commission from the broker. Tax reasons, if interested contact an attorney

90 Hours 6 Hours Self-Incorporated

General Licensing Requirements: Salesperson candidates must submit an application that includes: o Identity Information Statement o LI-____ Criminal Record Disclosure o LI-____ Past License Revocation Disclosure o DPS Issued Fingerprint Clearance Card o All Required Fee’s due to the Department of Real Estate

LI-214 LI-400

#1 Arizona Statutes and Rules: Broker Licensing Requirements: o Age -must be at a minimum ____ Yrs of age (18 years + 3 Years of experience) o Education – must pass ___ hours of brokers education o Testing – must pass the State and National Broker exam o Fingerprint Card – must obtain a NEW and updated fingerprint card o ________ – must attend a brokers 9 hour clinic o Pay Fees – ADRE application fees paid to department of Real Estate

21 9 Hours Broker Management Clinic

#1 Arizona Statutes and Rules: Broker Licensing Requirements: Candidates must submit an application that includes: o _____/_____ – must fill out and submit a disciplinary action form o _____ – must be filled out in case of civil or criminal action disclosed o _____ – Broker must provide proof of _____ years experience within past 5 years o Current or previous brokers must sign candidate experience form o IF from another state, a FULL license ____from that state o Candidate has a period of ____ year(s) to ‘ACTIVATE’ their brokers license from the date of passing the exam (similar to new salespersons).

LI244/LI214 LI400 LI226 3 Years History

Issuance of your license: * ______ years to take the STATE exam AFTER passing the SCHOOL exam. IMPORTANT: You have ____ year(s) to activate your license after passing the STATE exam. * To “______” your license means you are “STARTING UP”

10 Years 1 Year ACTIVATE

Keeping Your License Current (Renewals): IMPORTANT: * Your License is good for a period of ____ years or ____ Calendar Months * Your license will EXPIRE on the LAST day of the month of the ___th month from ORIGINAL date. * Every 24 months a license will need 24 hours of education (24/24) o 3 hours of Agency Law o 3 hours of Contract Law o 3 hours of Disclosure o 3 hours of Real Estate Legal Issues o 3 hours of Fair Housing o 3 hours of Commissioners Standards o 6 hours of and ADRE approved “general electives” o BONUS – Your Contract Writing Course counts towards CE classes

2 Years 24 24th

Keeping Your License Current (Renewals): * Your License is good for a period of ____ years or ____ Calendar Months * Your license will EXPIRE on the LAST day of the month of the ___th month from ORIGINAL date.

2 Years 24 24th

Keeping Your License Current (Renewals): IMPORTANT: Every ____ months a license will need 24 hours of education for renewal. (REMEMBER: The _______ Rule) o 3 hours of Agency Law o 3 hours of Contract Law o 3 hours of Disclosure o 3 hours of Real Estate Legal Issues o 3 hours of Fair Housing o 3 hours of Commissioners Standards o 6 hours of and ADRE approved “general electives”

24 Months 24 Hours The 24/24 Rule o BONUS – Your Contract Writing Course counts towards CE classes

Keeping Your License Current (Renewals): * Licenses are “______” for those who do NOT complete their CE classes. * If an agent does not renew their license on time, they enter into a “________”. The GRACE period lasts for a period of ____ year(s). IMPORTANT: You are NOT ALLOWED TO ACT AS A REAL ESTATE AGENT. IMPORTANT: YOU CAN NOT earn NEW during the grace period. * You can reinstate with full CE courses, fees and penalty w/in 1 year time. * If you do not renew on time, you license is “Terminated” * Once terminated, you must redo all courses, tests, etc.

EXPIRED Grace Period 1 Year

Keeping Your License Current (Renewals): * Licenses are “______” for those who do NOT complete their CE classes. * If an agent does not renew their license on time, they enter into a “________”. * The grace period lasts for a period of ____ year(s). * You are NOT ALLOWED TO ACT AS A REAL ESTATE AGENT * YOU CAN NOT earn new ______ during the grace period * You can reinstate your license with full CE courses, fees and penalty within ____ year(s) time. * If you do not renew on time, you license is “__________” * Once this occurs, you must redo all courses, tests, etc.

EXPIRED Grace Period 1 Year Commission 1 Year TERMINATED

Agent Compensation Break Down: IMPORTANT: Commissions are ONLY payable to the _____. * You work for your BROKER. It is your broker who works for the CLIENT. * Your broker OWNS all Listings and Sales and EARNS all commissions. IMPORTANT: All _____ to agents MUST be paid directly BY their BROKER. * An out of state licensed broker/agent _____ work underneath a Designated Broker in the State of Arizona as long as they have an _____agreement and all work is handled through the Designated Broker in _____. * Your Employment Agreement is a _______.

Designated Broker DB Commission CAN Operating Agreement Arizona (By Referral) Contract

Agent Compensation Break Down: * Your broker EARNS all commissions as discussed earlier. * You will be PAID by your Designated Broker BASED on your contract. * You MUST be ______ at the TIME the Commission was Earned. o Commissions are “EARNED” in ARIZONA at the time the sale is _______, NOT when the sale is CLOSED or RECORDED. IMPORTANT: If you produce a Ready, Willing and Able buyer to a seller and a _______ is FORMED, that is the EXACT time your commission is EARNED and DUE, BUT IS payable LATER. * Agents TYPICALLY get PAID AFTER ______, sometimes from escrow directly. IMPORTANT: If your broker has a full and complete file, they may release payment to the agent directly from close of escrow. This is COMMON and ALLOWED.

Licensed PROCURED Contract Close Of Escrow (COE)

Agent Compensation Break Down: IMPORTANT: Referral Fees are LEGAL in the State of Arizona. o Agent to Agent referrals are NOT uncommon but, remember that ALL commissions earned NEED to be paid to YOUR ______. IMPORTANT: Agent must be licensed at the time the commission was “EARNED” and do NOT have to be licensed when the commissions are "______".

Designated Broker PAID

Agent Compensation Break Down: IMPORTANT: _______ - Payments for referrals or leads made to someone who does NOT have a current real estate license is ______ in the State of Arizona.

Finder's Fees ILLEGAL

Agent Compensation Break Down: * It is LEGAL to be a lender (MLO) and a real estate agent, but must COMPLY with all lender laws and MUST ______ if earning money from BOTH real estate AND Lender sides.

DISCLOSE

Offices and Commissions: * _______ Commissions offices: o You the sales agent will receive your ENTIRE commission. o Typically, in this case you will have a _______ fee. o Most often there are fees taken out of your commission.

100% Monthly

Offices and Commissions: * Commission ______ Offices o Depending on your agreement, you will SHARE or SPLIT commissions. o Most often you see splits ranging from 50/50 to _____/_____. o Splits cover your expenses.

Sharing (Split) 90/10 Split

Real Estate Offices: * Brokerage must have a ______ location in Arizona. IMPORTANT: Sign must have _______ name and Brokerage Name. * Sign at entrance made visible to the general public. * All other agent licenses must be available for review. * IMPORTANT: Current copy of ARIZONA ___ book readily available (online OK) IMPORTANT: Any change of address must be filed with ADRE within _____ DAYS. (This includes moving, closing, opening etc.)

Real Estate Offices Physical Designated Broker [DB] AZ RE Law 10 Days

Real Estate Offices: ______ Offices: (Secondary Locations) o MUST be managed by a licensed _____ or ______ o Sign must have Designated Broker's name and ______ Name o Sign must indicate that this is a “_______ Office”

Branch Offices Brokerage Branch

Real Estate Offices: o ______ Offices are exempt from ADRE license fees

New Home Sales Offices

Operating Without A License: IMPORTANT: Anyone who acts or advertises as being a licensed agent without having a current license is guilty of a ______. * A licensee conducting real estate activity while their license is Inactive, Expired or Terminated, or someone who has never obtained a license. This is common with Property Management. * Commissioner can send out ______ orders to stop this behavior as they don't have more authority since the individual is NOT licensed. * If found GUILTY a ______ Penalty can be issued like FINES. IMPORTANT: The penalty is up to $1000

FELONY Property Management Cease and Desist Civil

Violations & Penalties: IMPORTANT: Before the COMMISSIONER or ADRE can use action AGAINST a licensee, they must PRESENT _____ notice of any charges and provide the OPPORTUNITY for a _______. IMPORTANT: The licensee has ONLY _____ days to file a written reply and CAN be represented by an attorney.

Written Hearing 20 Days

Violations & Penalties: * IMPORTANT: Agents MUST MAKE and SUBMIT any LEGAL status CHANGES TO ADRE within _____ Days to Commissioner. o Must disclose ANY misdemeanor or Felony conviction – NOT arrest, only a _______. o Any court decision rendered as result of _____ judgment. o Suspension or revocation of ANY OTHER ______ license.

10 Days Conviction Civil Professional

Violations & Penalties: IMPORTANT: ONLY the Commissioner can issue this type of Order. * ______ - A disciplinary action resulting FROM ______ between the Department and the Respondent.

Consent Order / Consent Agreement Negotiation

Violations & Penalties: (Types and Examples) IMPORTANT: _______ are usually subject to CIVIL cases while some can be CRIMINAL. Most real estate disputes are OFTEN resolved in _____ actions. o Example: An unlicensed person who accepts a finder’s fee, if found guilty of operating without a license is potentially committing a class 6 felony.

Violations civil

Violations & Penalties: (Types and Examples) IMPORTANT: _______ - This term means you still have a license but CANNOT use it for a defined period of time, and it can be REINSTATED if certain criteria are met. o Example: Failure to report a conviction, a DUI, theft.

Suspension of a License

Violations & Penalties: (Types and Examples) IMPORTANT: _______ - This may be issued to a licensee if the commissioner feels that a ‘CERTAIN’ action may negatively be affecting the general public. o Example: Fraudulent activities, or scams against the public.

Summary Suspension

Violations & Penalties: (Types and Examples) IMPORTANT: ________ - This means you no longer have a license at all. – It’s gone. o Examples: Felony acts, Forgery, Theft, or Misrepresentation.

Revocation of a license

Violations & Penalties: (Types and Examples) IMPORTANT: ______ - These are issued when a licensee has been found to be doing an individual act that is ILLEGAL or potentially HARMFUL to the public. o Example: Illegal property management position without a license.

Cease and Desist Orders

Violations & Penalties: (Types and Examples) IMPORTANT: ______ - This is issued under situations where a licensee is ALLOWED to practice. o limited aspects of real estate but NOT everything o Example: If a licensee was charged with domestic violence but not yet convicted.

Provisional License

Violations & Penalties: (Types and Examples) IMPORTANT: ______ - These are issued by the department if and when a licensee’s conduct doesn’t warrant any other type of disciplinary action. o Example: An agent violated terms of the “Realtor code of Ethics”.

Letters of Concern

Violations & Penalties: (Types and Examples) IMPORTANT: ______- This can be issued after a hearing if a licensee is found to have VIOLATED a provision of the “Realtor code of Ethics”, they can be assessed up to a $______ penalty. o Example: unlicensed activity or property management without a license.

Civil Penalty $1000

Violations & Penalties: (Types and Examples) IMPORTANT: ________ - This can be assessed if the commissioner feels that a licensee may just need a better UNDERSTANDING in certain areas. o Example: Licensee FAILURE to recognize federal fair housing acts.

Additional Education

IMPORTANT: ______ = Is a last resort for recovery of losses, in an attempt to make a claimant whole, caused by the conduct of a licensed salesperson / broker in a real estate transaction. * This is administered under the direction of the Arizona Real Estate _______.

Recovery Fund Commissioner

How to apply to the Recovery Fund? o Eligibility applies when: IMPORTANT: A court judgment either civil or criminal OR an _____ award has been obtained against the salesperson and broker (NOT just the brokerage company) involving a real estate transaction and the conduct of the salesperson AND broker were in VIOLATION of the law. o The collection of a judgment or the award WITH documented attempts to COLLECT required but has been UNSUCCESSFUL the injured party MAY seek _____ damages from the Recovery Fund. o A Client must bring action against a licensee within ____ years of the CAUSE for action.

Arbitration Monetary Compensatory 5 Years

Who Pays for the Recovery Fund? IMPORTANT: The fund is FUNDED by _____ who are required to pay $10 per issuance of their new sales license and $20 for a new broker’s license. o IMPORTANT: If on June _____th of any year, the balance in the Recovery Fund falls below $________ every broker or salesperson who renews their license will be required to pay the same fee upon renewal to increase the balance of the fund.

Licensees June 30th IMPORTANT: $600,000

Who Pays for the Recovery Fund? Distribution of the Fund: o The Recovery Fund pays ONLY for actual, directly related out of pocket costs arising out of the real estate transaction. Paid only against a natural _____ ONLY, not a corporation. o IMPORTANT: Damages are limited up to $____ per transaction. Ex. The party who was harmed can collect a maximum of $30,000 from the fund o IMPORTANT: Maximum that will be paid from the fund over a licensees lifetime is $_____ Ex.10 people are owed $10,000 each, the first 9 to make a claim can get $10,000 back while the 10th person was too late and the fund payed out the maximum.

Person $30,000 $90,000

Who Pays for the Recovery Fund? Licensee Action: o IMPORTANT: If the commissioner pays money from the fund on behalf of a licensee, that **licensee’s salesperson or broker license is AUTOMATICALLY _________.** o The licensee isn’t eligible to obtain a license until they have repaid the fund with ______.

Terminated Interest

Who is REQUIRED to Have a Real Estate License? * A person must be licensed if they are to advertise or ‘act’ as a real estate licensee in the State of Arizona IF they performs or offers to perform the following services FOR COMPENSATION or PROMISE of COMPENSATION: o Selling/Listing/Purchasing/Negotiation on the exchange o Leasing or renting of Real Estate o Auctioning of Land or Real Estate

* If you are caught impersonating a licensee or acting without a license, it’s a felony!

Section 1: Arizona Statutes and Rules Flashcards

(87 cards)