B u l l e t i n

Arizona Department of Real Estate

T h e

Let’s Get Acquainted
Learn About the Education Team

May 2004
Volume 30, Issue 3

Vicky Murillo
Deputy Director of Education
Years of Service: 11.
One unique thing about her:
She just survived having four
teenagers under one roof!

Bobbie Pierce
Administrative Assistant
Years of Service: 20.
One unique thing about her:
She treats all people with
respect, the way she likes to
also be treated!

Joe Amy
Administrative Assistant
Years of Service: 10.
One unique thing about him:
He is an organic gardener!

The Game of “Life” at ADRE
By Dick Simmonds

If you have ever played the board
game called “Life,” you know that the
purpose is to make choices so you can
earn more money, accumulate things, and
not end up at the “Poor Farm.” Sometimes
here at ADRE we do all the right things,
earning more money for the State General
Fund, but never seeing any of it.
Therefore, we have landed at the Poor
Farm.
We are a uniquely funded agency
known as a “95/110” agency. This means,
according to §A.R.S. 32-2103, that the
Commissioner sets fees so that the
revenue the Department generates comes

Inside this issue:
Let’s Get Acquainted...

1

The Game if Life at ADRE

1

Legislative Wrap-Up

2

Commissioner’s Corner

3

Working Together Is Critical

5

What Does the Real Estate Advisory Board Do?

6

Radon — It’s a Gas!!?

7

Frequently Asked Questions (FAQ)

8

Administrative Actions

9

to within 95% to 110% of its
appropriation. This is not easy to do
since our fees are established either in
Statute or by Rule and take a long
time to change. Also, for the past two
years, legislators have exempted us
from this requirement so as to not lose
income to the State General Fund.
This process seems to be the reverse
of what it should be – the
appropriation based on the amount of
revenue generated – but this being
said, budget reductions have still
occurred.
(Continued on page 4)

Our Mission
The mission of the
Department is to protect
the public interest
through licensure and
regulation of the real
estate profession in the
State of Arizona.

Legislative Wrap-Up
By Todd Madeksza

On April 16, 2004 Governor Napolitano signed
into law Senate Bill 1140 – the most comprehensive real
estate bill to emerge from the Department of Real Estate
in recent memory. SB 1140 was one of three pieces of
legislation that emerged from the Department’s
stakeholders’ meetings during the summer and fall of
2003. The other two pieces of legislation (House Bills
2553 and 2556) passed each vote held, but were then
held by the Chairman of the House Appropriations
Committee. Despite the Department’s best efforts, these
two bills never reached a floor vote in the House.
Despite these setbacks, SB 1140 passed both
houses of the Legislature with only two votes against it
during the entire process. There were no votes against it
during the final processing in either house.
Commissioner Richardson credits the tremendous
amount of success that SB 1140 received to the
outstanding stakeholders that worked with the
Department and their willingness to explain and argue for
the changes outlined in the bill.
As enacted, SB 1140 updates multiple areas of
real estate statute, including cemetery laws, timeshare
laws, property management laws, and the establishment
of a voluntary “Business Brokerage Designation” for Real
Estate Licensees. Below are additional provisions of SB
1140. Many thanks to those stakeholders who helped
get this bill passed. Ultimately, it will help advance the
real estate field in Arizona.
Provisions of Senate Bill 1140:
Real Estate Brokers
§ Clarifies that a designated broker acting on
behalf of an employing real estate business may
become a Professional Corporation or a
Professional Limited Liability Company.
§ Outlines the requirements for proper recordkeeping of earnest monies.
§ Authorizes the Commissioner to take disciplinary
action against a licensee who fails to cooperate
in an investigation.
§ Stipulates that real estate brokerage services
offered for compensation in Arizona through an
Internet website are considered activities
requiring a valid real estate broker’s license.
Business Brokers
§ Establishes guidelines for first-time renewals, for
V O L U ME 3 0 , I S S U E 3

completion of 12 hours of instruction and
passage of test on each completed course, in
addition to the 12 hours prescribed for all license
renewals. Subsequent renewals do not require a
test.
§ Establishes a voluntary Business Brokerage
Designation for licensees, with guidelines for 24
additional hours of business brokerage
instruction and an examination on business
brokering.
Out-of-State Brokers
§ Establishes requirements for a licensed Arizona
broker and an out-of-state broker to
cooperatively conduct business activities and
requires them to sign a cooperation agreement
before conducting such activities.
§ Assigns responsibility and liability to the licensed
Arizona broker for the acts of an out-of-state
broker.
§ Subjects all monetary transactions to Arizona’s
statutory requirements.
§ Requires negotiations taking place in Arizona or
with people owning property in Arizona to be
conducted by the licensed Arizona broker.
§ Requires the cooperation agreement to list real
estate activities to be conducted by the out-ofstate broker, including a compliance statement
and a responsibility statement.
§ Prohibits an out-of-state broker not licensed in
Arizona from listing, marketing or advertising in
the state any real property located within
Arizona.
§ Prohibits signage in this state by an out-of-state
broker.
§ Prohibits an out-of-state broker from using a
cooperation agreement as authority to sell,
lease, rent, exchange or attempt to sell, lease,
rent or exchange real property to a resident of
Arizona.
Property Management
§ Clarifies that the §32-2121 (A)(6) exemption for
property managers only applies to an on-site
manager.
§ Requires property management firms to account
for monies that are collected, including any
(Continued on page 6)
Page 2

By Commissioner Elaine Richardson

WAS BEING A SENATOR MORE FUN?

People often ask me if I miss being a Senator. I
usually reply that I enjoyed my ten years in the Arizona
Legislature, felt good about my work there, and would
not want to go back. Friends look at me and say, “Don’t
you miss all the excitement and politics and prestige as
compared to “just” running an agency?” I usually hide
my smile, particularly at the “prestige” part.
However, thinking back, I realize that being a
Senator was only one leg of my journey before
completing a full circle. I am very fortunate to have
experienced this “circle” as I feel it gives me a broad
perspective on all phases of our industry.
First, as a small business owner of a laundromat
and dry cleaners, I experienced the fun and trials of
meeting expenses, complaining when CAM (common
area maintenance) charges kept increasing, dealing with
sometimes inane government regulations that didn’t
seem to make any sense, making sure no customer left
my store without being satisfied, keeping 50 machines in
good repair, working long hours and with lots of hard
work, and making sure that the bottom line never turned
red.
The next phase of my circle was as a real estate
agent and then a broker. I handled leasing, commercial
and business sales, and property management. I loved
what I did and nothing matched that good feeling of
walking out of escrow with a nice commission check in
my hand. Of course, by the time I reached my car, I was
already thinking about (and worried about) my next sale.
Since I was fortunate enough to own my own small
company, meeting rent and salaries, keeping equipment
current and all the related expenses that go into running
a small business were always paramount on my mind. I
learned what it meant to not only sell, but to make sure I
never ran afoul of that “pesky” Real Estate Department.
In this circle, I saw a completely different view of
competition and the business world.
Nothing can describe my ten years in the
V O L U ME 3 0 , I S S U E 3

Arizona Legislature. Campaigns can be grueling and
winning can be exotic. I made a decision to be issueoriented. I personally feel that this is the only way one
can survive and be effective. I was a Democrat in a
typically Republican industry and legislature. In order to
accomplish my goals, which were primarily to work on
women’s issues and measures that would make it less
onerous to own a small business, I knew I needed 31
votes in the House of Representatives and 16 votes in
the Senate. That was a different bottom line from that of
owning a business, but it was the bottom line. Again I
was fortunate enough to have business and life
experiences to bring with me. I had never worked so
hard or carried such a burden. I felt every issue I worked
on could potentially affect people’s daily lives—much
different from when I ran my own businesses where the
bottom line did not affect everyone in our state. I left
feeling good about my work, felt I made significant
contributions and also traveled pretty extensively – but
that’s for another story!
So completes the full circle from private citizen,
to small business owner, to legislator and now regulator.
I feel each phase of experience helps me to see a very
broad picture. We have challenges to meet every day
and even though we bring in a good “bottom line,” we
don’t get to keep it to run our shop. Regulatory reform
plagues us and often hinders our ability to complete our
mission – which is to protect the public interest. It is
challenging to get 90 legislators to believe that
stakeholders which include industry, the public and
agencies are in the trenches every day and really do
know what their own needs are. However, again I feel
fortunate that my past experiences allow me the luxury of
being able to see each side of every issue in a clear and
unbiased light. The most important thing it has helped
me see is that there is always much to learn and the best
place to learn it is from you – the folks who deal with new
issues and new challenges every day. That is the only
way to expand our circle – and that is the bottom line! Œ

Page 3

The Game of “Life” at ADRE (cont’d)...

For example, for fiscal year 2003, the
Department’s appropriation was reduced from its original
amount of almost $3.4 million to $3.1 million. The
Department’s budget for fiscal year 2004 is $100 less,
and while on the surface appears to be a minimal
reduction compared to the previous year’s drastic
reduction, in reality, approximately $70,000 of previously
covered charges such as retirement, health insurance
and rent were unfunded and suddenly needed to be
absorbed by the budget.
In staffing, even though the legislature has
approved that the agency have 65 positions, budget
reductions have resulted in the agency only being able
to fund 57 positions. Despite this, the real estate
industry continues to grow. Record numbers of people
are taking the real estate examination and the number of
individual licensees has grown from 53,478 in July 2002
to 61,085 in January 2004. This is an increase of
approximately 14.2%. The total does not include
another 8,151 business entities also holding licenses.
During the first half of fiscal year 2004, the subdivisions
staff processed 1,110 applications – an increase of 23%
over the first six months of fiscal year 2003. With all of
this activity, investigation cases have also increased and
a total of 1,059 new complaints were received for fiscal
year 2003. All these figures continue to increase for
fiscal year 2004.
In order to keep up, we have cut every activity
we can think of that is not either necessary or important
to the licensees. We have even had one suggestion
recently to stop producing ADRE’s Bulletin. However,
we feel that this is an important tool to keep the industry
informed about what is going on at the Department. It
also includes the published list of Administrative Actions.
Unfortunately we are left with nowhere else to cut. We
now have employees performing the work equivalent to
1¼ to 1½ people just so we can continue to get the work
processed in a timely manner. We also had to eliminate
overtime hours because of a lack of funds.
If we had adequate funding, what choices would
we make? We certainly could use additional employees
in Licensing and some in Education. We are making
progress in Education in spite of the budget crunch. The
recent addition of an education auditor/monitor will share
some inspection duties with the Subdivisions division.
Could we use another education auditor? Yes! We also
V O L U ME 3 0 , I S S U E 3

need another subdivisions representative and certainly
some more investigators.
On the positive side, we have just signed a
contract to design and implement a program for online
licensing renewals, of which we will be reporting more
about in the near future. This should certainly relieve
some of the pressure in Licensing. Will this technology
allow us to reduce licensing staff? Time will tell, but if
the number of licensees continues at the current level of
expansion, the online system may only help us avoid the
increase in future staff numbers. Nearly every day, the
Commissioner or a staff member comes to me and says
“I think it would really be great if we could do X, Y, or Z
for the staff or for our licensees.” Right now I have to
respond that it sounds like a great idea but, “Sorry, we
do not have the funds!” Wouldn’t it be nice to say, “OK,
let’s take a look at this and see if it is workable and
beneficial to the Department, the licensees and in
fulfilling our mission, which is to protect the public
interest!”
As you can tell by this article, the game of “Life”
at ADRE has been frustrating and we have ended up at
the “Poor Farm” instead of the “Mansion.” We do have
an excellent staff and they still continue to pull together
to get the job done. We give thanks to each one of them
for their continued effort in spite of tough times.
Editor’s Note: Mr. Simmonds is Business
Services Director and a Special Assistant to the
Commissioner. He has been with ADRE for 10 years. Œ
Page 4

A NOTE ABOUT GUEST COLUMN ARTICLES…
GUEST COLUMN ARTICLES DO NOT NECESSARILY REFLECT THE OPINIONS, POLICIES OR INTERPRETATIONS
OF LAW BY ADRE. ADRE ASSUMES NO RESPONSIBILITY FOR THE CONTENT IN SUCH GUEST ARTICLES.
THEY ARE MEANT TO INFORM THE PUBLIC AND PROVIDE VARIETY TO ADRE’S BULLETIN.
ALL ARTICLES ARE EDITED FOR SPACE LIMITATIONS.

Working Together is Critical
By Guest Columnist RL Brown

As I hope you know from your own personal
successes, the Arizona real estate industry is enjoying
the very best of times. Both the new home and resale
markets are breaking all-time historical records for sales
volume in just about every part of the state. March was
an all-time record high month in metro Phoenix with
9,361 resale homes closed and 4,194 new homes
closed. Home ownership in metro Phoenix is at an alltime high of about 68%, thanks to the relative
affordability of housing in our region. The story is similar
in Tucson and elsewhere in Arizona. While changes in
interest rates and rising prices may take a little bit of the
bloom off of this real estate market over the coming
months, we are confident that Arizona will continue to
maintain its #2 national ranking amongst new home
markets over the next several years and that the resale
market will remain near record highs.
There are lots of reasons for this strong real
estate market, not the least of which is the continuing
growth of new populations in the state. Every day new
families and singles are moving to Arizona from
somewhere else. Many are coming without jobs, seeking
a “change” in their environment from the high cost of
living and stress of states like California. Many are
retirees looking for the “warmth” of the Sun Belt or young
folks that will be looking for their first job.
While all of this growth and prosperity is going
on, the Arizona Department of Real Estate continues to
move toward an enhanced level of service to the public
and the real estate community, while struggling to live
within its reduced budget levels. The Department is well
beyond the “cutting the fat” stage that outsiders often
visualize as “typical” government. Commissioner
Richardson has resourcefully managed ADRE over her
first year as Commissioner, and now needs the
V O L U ME 3 0 , I S S U E 3

unqualified support of industry to restructure the
Department’s funding mechanism, so that the fees that
are paid to the Department can be used to adequately
protect the public interest and to provide a basic level of
service to industry stakeholders.
The Arizona Association of Realtors® has
stepped up to the plate on this issue as have the
Southern Arizona Homebuilders Association and other
trade groups, but unfortunately the leadership of the
Central Arizona Homebuilders Association has not.
Everyone in this industry, in this state needs to implore
them to join with us to get this job done.
Editor’s Note: R.L. Brown is the chair of the Real
Estate Advisory Board. Mr. Brown was first appointed to
the board in 1995 by Governor Fife Symington and then
reappointed by Governor Jane Dee Hull in 2001. His
current term expires in 2007. Mr. Brown is a principal in
the Phoenix housing market research firm of Home
Builders Marketing, Inc., and has been active in the
housing industry since 1961. Œ

Page 5

What Does the Real Estate Advisory Board Do?
By Carla Randolph

The Real Estate Advisory Board consists of
volunteers appointed by the Governor to serve six-year
terms. Governor Janet Napolitano just filled vacancies
last year by appointing three new members. Currently,
RL Brown serves as the Chairperson for the Real Estate
Advisory Board.
Arizona statutes describe the Board’s duties.
For example, the Board may provide the Commissioner
with such recommendations as deemed necessary and
beneficial to the best interest of the public. The Board
may also provide suggestions on specific questions or
proposals as deemed necessary, or as requested by the
Commissioner. Lastly, the Board must annually report to
the Governor in the form of an evaluation of the
performance of the Real Estate Commissioner and the
Real Estate Department.
Over recent years, the Board has grown from 7

to 9 members. This last year, at the request of
Commissioner Richardson, the Board members have
become more actively involved with various Department
issues. Recently, Advisory Board members agreed to
function as communication facilitators for the
Department, to help open the lines of communication for
members of the public who have questions and
concerns.
The Advisory Board meets four times per year.
The meetings are open to the public and anyone is
welcome to attend. For more information about the Real
Estate Advisory Board, please refer to ADRE’s web page
at www.re.state.az.us or contact Carla Randolph at (602)
468-1414, ext. 135.
Editor’s Note: Ms. Randolph is an Executive
Assistant to the Commissioner who has served ADRE for 18
years. She has been assigned to help staff the Advisory
Board Meetings for several years. Œ

Legislative Wrap-Up (cont’d)...
(Continued from page 2)

tenant deposits, and directs each rental
agreement to include a clearly stated provision
of the disposition of tenant deposits.
Timeshares
§ Increases the civil penalty assessed on a
developer who violates a timeshare law or rule,
from $500 to a range of $1,000 to $5,000.
Cemeteries
§ Defines “private cemetery” as an unlicensed
place for burials or interment of human remains
that does not occur more than ten times a year
and is not available to the public.
§ Requires an audit, by a certified accountant, of
financial records and the Irrevocable Trust Fund
upon transferring ownership of a cemetery.
§ Authorizes the Real Estate Commissioner to
exempt a cemetery from licensing if compliance
with statutes is not essential to the public interest
or protection of the buyer due to special
circumstances of the cemetery.
§ Requires a licensee to produce promotional or
advertising materials requested by the
Commissioner within ten days of the request,
instead of upon request.
V O L U ME 3 0 , I S S U E 3

§

Requires independent cemetery brokers to
obtain and comply with licensed cemetery rules,
to properly disclose to a purchaser all fees and
time frames connected with the transfer and
recording of interment rights, a cemetery
property or a deed.
§ Requires all trust funds to be deposited within 30
days after the contract for a cemetery purchase
is paid in full.
§ Replaces a $500 filing fee for a cemetery plan
amendment with a fee equal to the greater of
$250 or ½ of the initial filing fee.
§ Establishes procedures for reclaiming cemetery
plots abandoned after 50 years, including
notification, exceptions, heirs and equivalency.
§ Requires a cemetery to set aside ten percent of
plots abandoned within the cemetery for an heir
to reclaim a plot after abandonment procedures
occur.
§ Subjects proceeds from the sale of a reclaimed
lot, grave, niche or crypt to the Endowed-Care
Trust Fund requirements for regular sales.
Editor’s Note: Mr. Madeksza is the Director of
Education and Licensing and the Legislative Liaison for
ADRE. He has been with ADRE for under one year. Œ
Page 6

Radon — It’s a Gas!!?
By Curt Leaf

Radon is a naturally occurring radioactive gas
formed from the radioactive decay of radium and uranium.
These elements are found at varying levels in almost all
rock and soil. The gas formed is odorless and colorless.
As the gas is formed, it gradually works its way to
the surface where it dissipates into the air. If the gas rises
under a structure, it will collect there and may enter the
building through such openings as cracks or joints in the
floor, crawl spaces, underground return air ducts and floor
drains. It may even seep through the many tiny pores in
hollow concrete bricks. Unless vented to the outside, the
gas can collect in basements and in lower levels of the
structure.
Most public exposure comes from this
accumulation of radon gas in homes, schools and office
buildings. The EPA estimates that the national average
indoor radon level in homes is about 1.3 pCi/l (Pico curies
per liter) of air. Typically, radon levels in buildings in
Arizona – if present at all – range from .25 Pico curies per
liter of air to 1.5 pCi/l. However, a level of 11,000 pCi/l was
once measured in a home near Prescott. The EPA has
determined that 4.0 pCi/l is the level above which some
type of mitigation action needs to be taken. Nationally,
approximately 1 in 15 homes have tested at or above this
standard. Overall, Arizona fits within this average.
The average half-life of radon is 3.8 days. As it
undergoes radioactive decay, it releases an alpha particle.
This particle can be inhaled where it can become imbed in
the cellular tissue of the lungs. As it continues to decay,
surrounding cells in the lung tissue may be damaged,
which can lead to lung cancer. The EPA and the National
Academy of Science have determined that radon in indoor
air is the second-leading cause of lung cancer. They
estimate 15,000 to 22,000 Americans die every year from
radon-related lung cancer.
Logically, the greater the concentrations of radon
gas in a home, the greater the risk of lung cancer. Radon
levels are easy to test for and test kits can be acquired
from most hardware or building supply stores. Something
as simple as opening the doors or windows when weather
permits can help lower simple concentrations of radon
levels. Higher concentrations can signal a problem and
professional testing and mitigation should be considered.
BUT WHY A SCIENCE LESSON IN THE MIDDLE OF A
REAL ESTATE BULLETIN?
Because the EPA has determined that long-term
exposure to radon gas may increase a person’s risk of lung
cancer and because radon collects in houses, the issue
V O L U ME 3 0 , I S S U E 3

can become one of “disclosure” for the real estate licensee.
If you think this disclosure is not important, consider the
following:
1. In 1984, a California Court of Appeals’ decision
(Easton vs. Strassburger) set a new precedent. Under this
precedent, a broker or salesperson is responsible for
disclosing not only what they know about the property but
also what they should have known after a “reasonably
competent and diligent inspection” of the property. This
includes the presence of radon.
2. The June 2002 SELLER ADVISORY, published
by the Arizona Association of Realtors® says in part that:
“Sellers are obligated by law to disclose all known material
(important) facts about the property to the buyer.” Arizona
law requires that material facts about the property be
disclosed in writing, whether or not the buyer or a real
estate agent asks. If the buyer specifically asks about an
aspect of the property, the licensee has the duty to disclose
the information, regardless of whether or not the licensee
considers the information to be material.
To emphasize this, the AAR’s “RESIDENTIAL
SELLER’S PROPERTY DISCLOSURE STATEMENT
(SPDS)”, on page 6 under Environmental Information,
Question 174 specifically includes “Radon Gas.”
3. In January 2004, the FHA revised its home
inspection form (HUD 92564-CN) to include information on
radon gas testing.
4. The National Association of Realtors® website
(www.realtor.org) lists three cases involving radon. In two
of the cases, the court canceled the purchase contract
because of the presence of radon gas. In the third, the
New York Appellate Court ruled that excess “radon was not
a ‘substantial structural defect,’ sufficient to cancel the
sales contract.” Even thought the contract remained valid,
someone had to pay a lot of attorney’s fees.
Wouldn’t it be better for professionals to know upfront if and when they are asked about radon, than to “wing
it” and be penalized for “failure to disclose?”
Editor’s Note: Mr. Leaf is an Executive Staff
Assistant who has served ADRE for 30 years.
Readers may contact the National Radon
Information Line at 1-800-SOS-RADON or access the EPA
website at www.epa.gov, for more information. The
Arizona Radiation Regulatory Agency website at www.arra.
state.az.us has Arizona-specific information. State Radon
Officer John Stewart is available for presentations on radon
gas. He may be emailed at: jstewart@arra.state.az.us. Œ
Page 7

Frequently Asked Questions (FAQ)...
Question: Question: Is it legal for a licensee to post "Houses for sale, call XXX-XXXX"
signs? Are they similar to "Open House" directional signs?
Answer: Any sign that says "house/houses for sale" is not a directional sign – it is an
advertisement and must conform to R4-28-502 (E), and clearly and conspicuously display
the company name. There is no requirement regarding what phone number is placed on
the sign, since that is for the broker to monitor. Directional signs are for directions to an
open house; they have an arrow on them pointing the way for people to find the open
house. There is no requirement that they display the company name.
Question: If I, as a broker, discover that one of my salespeople is involved in an activity
that is a violation of the real estate laws or rules and I report them to ADRE, will I be
investigated for "improper supervision?"
Answer: Part of the job of a supervisor is to report improper activity when it is
discovered. If a broker reports a salesperson in their employ as soon as the supervisor
discovers the improper activity, then that broker is meeting the requirements of being a
good supervisor and will not be investigated. On the other hand, if a broker knows of
improper activity and does not report it immediately, then that broker is not meeting the
requirements of being a good supervisor and will be investigated.
Question: Does a Transaction Coordinator need to be licensed by the Department?
Answer: That depends on what the Transaction Coordinator's job functions include.
Any person who discusses terms, conditions, or pricing, or who drafts, fills out or
completes documents involved in real estate transactions must be licensed. The
Transaction Coordinator may deliver paperwork, collect demographic information,
confirm and/or set appointments (without discussing issues), track the status of
documents/transactions, or unlock a property for a licensee, so the licensee can preview
or show a buyer the property (with no discussion of the property by the coordinator).
Question: Why do I need a license just to fill out paperwork?
Answer: Article XXVI, Section 1 of the Arizona Constitution provides that licensed real
estate brokers or salespersons may complete such paperwork. Generally, this type of
activity is considered "legal" and requires an attorney, but the State Constitution makes
an exception for those licensed in real estate. Œ

Look for an upcoming Bulletin addendum with a
directory and summaries of all regulatory rule and
substantive policy statements — coming soon!

V O L U ME 3 0 , I S S U E 3

Page 8

Do you have an article idea?*
If you would like to submit an article to be considered for inclusion in The Bulletin, please
sen
send
d your article to the Editor via email at: lcarrasco@re.state.az.us
lcarrasco@re.state.az.us..
Submissions must be in MS Word format and less than 500 w
words.
ords.
*Submissions of guest writers may not necessarily reflect the opinion of the Department
and may be edited due to space li
limitations.
mitations.

Administrative Actions
COMMISSIONER’S FINAL ORDERS
Disciplinary Actions
LaMarr Farr; L-F Investment Trust (Mesa)
File No. 99A-016-REL, Order 12/4/2002
After hearing, the Commissioner ordered that LaMarr
Farr and L-F Investment Trust cease and desist from
offering or selling any lots in violation of Arizona
subdivision laws now or in the future; pay $50,000 to the
Pinal County General Fund; pay a civil penalty of
$5,000; pay $500 to Diversified Water Company; offer
purchasers who had not resold their lots purchased from
Farr and L-F Investment Trust the right to rescind their
purchase contracts; and ordered Farr to attend 6 hours
of approved course(s) on subdivision laws. This was
based on the findings that they participated in creating a
subdivision, acted in concert with others to avoid the
subdivision laws, pursued a common promotional plan to
market and sell lots within the subdivision, and sold lots

without first notifying the Commissioner and obtaining a
public report. In its 11/25/2003 order on Farr's appeal,
the court reversed the Commissioner's Order in part,
finding that Farr was not personally liable for the costs,
civil penalty, improving the development to county
standards and compliance with subdivision laws, and
affirming the Commissioner's Order in all other respects.
D. R. Horton, Inc. (Gold Canyon)
File No. 03A-034, Consent Order 3/1/2004
DR Horton's application for public report failed to
accurately reference a utility easement, and the
developer failed to notify the Commissioner of a change
in the subdivision plan, in violation of statutory provisions
of A.R.S. 32-2153 (A)(3) and 32-2181(C)(1). Horton is
assessed a civil penalty of $3,000.
Appealable Agency Actions

ADRE’s 2001 Sunset Audit Successfully Closed
The office of the Auditor General recently completed a 30-month follow-up review of ADRE
regarding the implementation status of departmental audit recommendations that were presented in a report
released in August of 2001.
In the most recent report dated April 19, 2004, the Auditor General’s office concluded their follow-up
work on the Department’s efforts to implement the given recommendations. ADRE’s audit was completed
successfully and the Department is in compliance with all audit recommendations. Œ

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Administrative Actions (continued…)

James Hubbard (Tucson)
File No. 04F-049-REL, Order 2/4/2004
The Department denied Hubbard's application for real
estate salesperson’s license based on his 2003
misdemeanor conviction for DUI, 1988 felony conviction
for Wrongful Use of Cocaine, confinement, reduction in
grade and bad conduct discharge from the Air Force, in
violation of the statutory provisions of A.R.S. § 32-2153.
After a hearing before an administrative law judge, his
application for license is denied. The Commissioner
denied Hubbard's request for rehearing or
reconsideration on 3/23/2004.
Justin M. Smith (Chandler)
File No. 04F-061-REL, Order 2/27/2004
The Department denied Smith's application for real
estate salesperson's license based on his criminal
record, including a 2002 felony conviction, violation of
state laws involving violence against another person, and
insufficient showing of honesty, truthfulness and good
character. After a hearing before an administrative law
judge, his application for license is denied.
SETTLEMENTS BY CONSENT ORDERS
Disciplinary Actions
Jacob Crites and Jake's Old West Properties, Inc., an
Arizona corporation (Prescott)
File No. 03A-012, Consent Order 4/14/2004
According to a complaint filed with the Department, a
salesperson previously employed by Jake's Old West
Properties showed prospective purchasers a lot in the
Ashfork area, prepared a purchase contract and the
transaction closed, all without anyone discovering that
the listed property which was sold was not the property
the purchasers had seen. Crites did not review listing
and purchase agreements or similar instruments within 5
days of the date of execution, indicated by the placing of
his initials and the date of review on the instrument on
the same page as the parties' signatures, and authorized
or permitted a salesperson to perform that duty on his
behalf, in violation of statutory provisions, including A.R.
S. § 32-2151.01(G) and 32-2153(A)(3). Crites's real
estate broker's license is suspended for 15 days, he is
assessed a civil penalty of $3,000, and shall attend 15
V O L U ME 3 0 , I S S U E 3

hours of continuing education classes in addition to the
classes required for license renewal. Respondents shall
reimburse the Department its costs and expenses to
audit the brokerage up to two times per year for two
years, and shall engage a CPA to monitor its financial
activities for two years.
Second Home Park Model Sales dba Blue Diamond
Home & RV (Lakeside)
File No. 04F-065-REL, Consent Order 3/4/2004
Blue Diamond acquired 32 lots in The Woodlands, an
unimproved lot subdivision (one in which the lots are
without a residential, commercial or industrial building
and for which the subdivider has not contracted with the
purchase to construct a building on the lot within 2
years) from the prior developer. Prior to applying for
public report or exemption, Blue Diamond began
marketing lot and manufactured home combinations (a
lot could only be purchased in conjunction with the
purchase of a manufactured home) and sold one lot. The
developer may have provided the purchaser and
prospective purchasers with a copy of the prior
developer's public report (which was not valid for Blue
Diamond and its offering), but did not take a receipt for it.
Blue Diamond's conduct was in violation of statutory
provisions including A.R.S. § 32-2181(A), 32-2183(F), A.
A.C. R4-28-803 and R4-28-805. Respondent is
assessed a civil penalty of $3,000, shall offer rescission
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Administrative Actions (continued…)

to the buyer, it's application for public report is approved,
and the developer shall attend a 3-hour class on
subdivision law.
David B. Sygall; Direct Connection Marketing, Inc.;
and Douglas Ball, aka W. Douglas Ball, individually
and as Trustee for Direct Connection Defined Benefit
Pension Plan (Tucson)
File No. 01A-151, Consent Order 3/31/04
Sygall purchased subject property in Pima County
adjacent to land owned by the Tohono O'Odham Nation
and with Ball and others acted in concert by using a
series of owners or conveyances or other methods to
create a subdivision in violation of § 32-2181(D). Their
conduct resulted in the sale of subdivided land without
first notifying the Commissioner of their intent and
obtaining a public report or exemption from the public
report requirements, and without providing prospective
purchasers with a public report, in violation of A.R.S. §
32-2181(A), 32-2183(A)(and (F). They engaged in a
common promotional plan under §32-2101(14).
Respondents agreed to cease and desist their sales or
offers of subdivision lots except as provided within the
Consent Order until they have demonstrated compliance
with applicable laws and rules; Ball and Sygall: are each
assessed a civil penalty of $5000; shall jointly pay
$10,000 for zoning fines; shall meet Pima County
requirements for the subject property and are financially
responsible for doing so; and shall submit application for
public report within 360 days of the Consent Order or
within 60 days after final subdivision approval by Pima
County, whichever occurs first.

The Department denied Meyerovitz's application for real
estate salesperson's license under A.R.S. § 32-2153 (B)
(2) for his felony conviction for Criminal Simulation.
Meyerovitz appealed the denial and is granted a
provisional license subject to specified terms and
conditions.
Richard Newbill (Hereford)
File No. 04F-092-REL, Consent Order 3/18/2004
The Department denied Newbill's application for real
estate salesperson's license under A.R.S. § 32-2153 (B)
(7) based on disciplinary action taken against his
professional/occupational license issued by the Arizona
Structural Pest Control Commission. Newbill appealed
the denial and is granted a provisional license subject to
specified terms and conditions.
Dallas Tanner (Mesa)
File No. 04F-081-REL, Consent Order 3/16/2004
The Department denied Tanner's application for real
estate salesperson's license under A.R.S. § 32-2153 (B)
(2) based on his 1998 misdemeanor conviction for Retail
Theft. Tanner appealed the denial and is granted a
provisional license subject to specified terms and
conditions. Œ

Appealable Agency Actions
Benjamin M. Bethel (Phoenix)
File No. 04F-067-REL, Consent Order 2/26/2004
The Department denied Bethel's application for real
estate salesperson's license under A.R.S. § 32-2153(B)
(2) based on his two 1996 drug-related felony
convictions. Bethel appealed the denial and is granted a
provisional license subject to specified terms and
conditions.
Jayson Adam Meyerovitz (Tucson)
File No. 04F-073-REL, Consent Order 4/6/04
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ARIZONA DEPARTMENT OF
REAL ESTATE
Main Office:
2910 North 44th Street, Suite 100
Phoenix, Arizona 85018
Phone: 602.468.1414
Fax: 602.468.0562
Southern Arizona Office:
400 W. Congress, Suite 523
Tucson, Arizona 85701
Phone 520.628.6940
Fax 520.628.6941

We are on the web:
http: //www.re.state.az.us

The Bulletin
An official publication of the State of
Arizona, Department of Real Estate.
Janet Napolitano
Governor
Elaine Richardson
Commissioner
Ronald Passarelli
Deputy Commissioner
Liz Carrasco
Editor
Real Estate Advisory Board
R.L. Brown, Chair
Richard C. Allen, Vice-Chair
Gary Patrick Brasher
Eugene E. Cox
Vicki L. Cox-Golder
Gary Lee
Vince Pellerito
Lisa A. Suarez
Felipe Andres Zubia

© 2003, ARIZONA DEPARTMENT OF REAL ESTATE. THE ARIZONA REAL ESTATE BULLETIN, OR “THE
BULLETIN,” IS SCHEDULED TO BE PUBLISHED 6 TIMES A YEAR AND IS AVAILABLE FROM THE WEB SITE
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