B u l l e t i n

Arizona Department of Real Estate

T h e

Let’s Meet the Administration Staff!

September 2004
Volume 30, Issue 5

Ron Passarelli
Deputy Commissioner
1.5 Years of Service
Ron is a former elected
official, having served as a
City Councilmember in
Colorado. He is also an avid
quoter of insightful thoughts.

Dick Simmonds
Business Services Director,
Commissioner’s Special Asst.
10 Years of Service
Dick plays tennis every
Saturday morning with his
daughter and is also a garden
model railroader.

Kevin Goode
Information Technology
Specialist
7 Years of Service
Kevin enjoys racquetball,
hiking, four-wheeling and likes
spending time in the high
country.

Liz Carrasco
Public Information Officer,
Bulletin Editor and Webmaster
1.5 Years of Service
Liz enjoys reading about
politics, watching scary movies
and loves her 7 month old son
Daniel.

Curt Leaf
Executive Staff Assistant
31 Years of Service
Curt is a stage manager for
the Phoenix Symphony
Guild, Orchestral Training
Program and also makes
hand-made pens.

Carla Randolph
Executive Assistant to the
Commissioner
18 Years of Service
Carla is an avid snow skier
and is a mother to two lovely
little girls, Allison and
Makenna.
(Continued on page 9)

Inside this issue:
Let’s Meet the Administration Staff...

1

7 Questions Regarding the Broker Audit Declaration...

2

Commissioner’s Corner

3

ADRE Partners with Legislature on Growth Issues...

4

The Property Management Debate Over On-Site...

5

Frequently Asked Questions (FAQ)

6

Illegal Subdividers Beware...

7

Unlicensed Activity — Me?

8

Administrative Actions

10

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.

7 Questions Regarding the Broker Audit Declaration Form
By Lynda Gottfried

regarding the Broker Supervision and Control Audit
Declaration (Self-Audit) Form.

Question 5
Do I have to scan and e-mail the Audit Declaration
Form?

Question 1
If I am semi-retired and don’t use my license often do I
have to complete this form?

Answer: The completed Audit Declaration may be mailed,
faxed, scanned, e-mailed or hand-carried. It may also be
sent to the ADRE’s Phoenix or Tucson offices by mail.

Answer: If your license is active with the Department of Real
Estate and you are a Designated Broker, you are required to
complete the Audit Declaration Form. It does not matter
whether or not you are conducting any real estate business.
In this case, most of the answers will be “N/A.”

Question 6
May I include the Audit Declaration Form with my
renewal application and fees?

Following are some frequently asked questions

Question 2
How do I determine the difference between a “No”
answer and a “N/A” answer?
Answer: A “No” answer means you are not in compliance
with Arizona Revised Statute and/or Commissioner’s Rule. A
“N/A” answer means that section does not apply to you or to
your brokerage. You are required to explain any “No”
answers on page 9 of the Audit Declaration Form. A proper
explanation should tell an auditor how and why you are not in
compliance.
Question 3
Am I supposed to submit my Audit Declaration Form
with my Broker’s License Renewal or Employing
Broker’s (entity) License Renewal?
Answer: The Audit Declaration Form is due prior to or with
the Designated (including Self-Employed) Broker’s License
Renewal. It is not due with the entity (Corporation,
Partnership, LLC) license renewal.

Answer: Yes. If you choose to send them together, they
must be addressed to the Licensing Division. The Licensing
Division will then route the Audit Declaration Form to the
Auditing Division.
Question 7
On page 6 of the “Broker Supervision & Control
section”, if I have no licensees, do I still need a Broker
Supervision Policy?
Answer: Yes.** The Broker Supervision Policy manual is a
requirement. If you have no employees or licensees and
minimal activity, the manual will not need to cover as many of
the required areas. The manual will need to address the
areas that do apply, such as filing, storing and maintaining
transactions, and the handling of funds.
**A planned rule change is expected to exempt a broker with
no or few employees. Additional rule changes may also
occur and will be reported in future Bulletins.
Editor’s Note: Ms. Gottfried is the Deputy Director of
Investigations/ Auditing and has been with ADRE for 9 years.
Œ

Question 4
If I change my license from a Designated Broker to an
Associate Broker, am I still required to submit the Audit
Declaration Form?
Answer: No. The Audit Declaration Form is only a
requirement for Designated Brokers.

V O L U ME 3 0 , I S S U E 5

Page 2

By Commissioner Elaine Richardson

THIS IS NOT REALITY TV—BUT
IT IS REALITY!
If what I am about to tell you were on one of
the new reality TV shows, I would change the channel.
Unfortunately, I cannot do that at the Department of
Real Estate. You may ask, “What is she talking
about?” I like to relate us to the show “Survivor.” Let
me explain.
Business is booming in Arizona and that is a
good thing. The real estate industry counts for a major
portion of that growth, whether it is in the form of
developing/buying/selling land; building anything, from
timeshares to residential communities to commercial to
industrial to cemeteries, condos, etc—you get the idea.
But I’m not finished. Builders, trades people, sales
agents and brokers as well as the general public are
all affected sooner or later in one form or another by
the happenings at the Department of Real Estate. O.
K—so what? Here is where the reality comes in.
Let’s look at the Subdivisions Division. No
sales in a new home subdivision can be made without
obtaining a Public Report. What does that mean? It
means that an application for Public Report must be
filed with our Subdivisions Division and the Report
issued to assure that all the proper documents have
been obtained from the Department of Water
Resources, Department of Environmental Quality,
County or City Planning & Zoning Departments, Title
Companies, etc., and that all required disclosures will
be made to buyer. So what’s the problem? Let’s do
the math.
In fiscal year (FY) 2003, our subdivision staff
processed 1,778 applications for Public Report with 4
subdivision representatives. In FY 2004, our
subdivision staff processed 2,212 applications for
Public Report with 4 subdivision representatives.
This means than an already overworked staff
of 4 people must now process 12* applications per
week. An average application takes 9 hours to
process. Therefore, with our representatives working
8 hours per day, 5 days per week with no interruptions
whatsoever, such as telephone calls from applicants,
V O L U ME 3 0 , I S S U E 5

title companies, etc., each representative could
process 4.5 applications per week. However, this
leaves a backlog of 7.5 applications per week.
In 2003, each representative was responsible
for 9.5 applications per week, which in itself caused a
carry-over. Impossible, you say? Yes, impossible, but
a reality factor. We realize these delays cost everyone
concerned lots of money—perhaps one reason we are
so diligent in trying to correct this budgetary crisis.
Let’s look at the Licensing Division. In FY
2003, we had 8 customer service representatives (this
includes the Tucson office) to handle 59,308 licensing
applications, which gives each representative 158*
applications to process per week, or 32 per day.
Total processing time for an application with no
interruptions (which is nearly impossible) is
approximately 1.5 hours for applications that have no
problems.
In FY 2004, ADRE had the same number of
customer service representatives (including the
Tucson office) to handle 64,740 applications,
meaning each representative must process 172*
applications per week or 34 per day. Total
processing time for an application is still 1.5 hours or
more. I did the math—8 hours in a work day divided
by 1.5 hours spent per application means it is feasible
to handle 5.3 applications per day. Again, this is an
impossible situation and a crisis, not only for the
Department, but also for the folks we are striving to
serve and protect. As of this publication, there are
currently 67,146 people with licenses with ADRE.
I only discussed two of our five divisions,
Licensing and Subdivisions, in this short epistle, but
the numbers of the other three divisions are just as
gruesome. We have some proposed beginnings of
solutions which I will share with you in future Bulletins,
but right now, I am going back to watch Survivor—their
odds seem better at the moment!
*Note: The above figures are also affected by 10
days vacation, 10 holidays and an average of 5 days of sick
time. Œ

Page 3

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.

ADRE Partners with Legislature on Growth Issues
By Guest Columnist Honorable Clancy Jayne

As a resident of the North Valley, I have become
accustomed to seeing wide open spaces of dirt and
grassland become sprawling subdivisions full of homes
almost overnight. The breathtaking growth taking place in
North Phoenix and other areas of the state is both a sign of
progress, and a challenge.
It is with this in mind that I sponsored two pieces
of legislation in our recently concluded regular session
that seek to address these dual issues. The first, House
Bill 2553, targeted the rampant practice of lot-splitting
and subdividing, by removing the $1,000 penalty cap for
violations to subdivision or unsubdivided lands laws, and
thus allowing a penalty range from $1,000 to $5,000 per
infraction. It also would have changed the definition of
“barrier” to mean a geographical feature either natural or
man made that prevents parcels of land from being
practicably, reasonably, and economically united, that
was not created by the owner of the parcel at any time.
The Department of Real Estate, as well as a number of
stakeholders, supported this significant piece of
legislation. Unfortunately, it was assigned to three
House committees, virtually guaranteeing its demise.
After passing the Federal Mandates and Property Rights
Committee and the Commerce Committee, it failed to
pass in the Appropriations Committee.
The second bill, House Bill 2556, would have
improved the efficiency and self-sufficiency of the
Department of Real Estate by creating the Real Estate
Regulatory Revolving Fund, comprised of surcharges
and fees. It would have modified guidelines and fees for
various real estate laws regarding the sale of subdivided
and unsubdivided lands, the organization, and the
regulation of cemetery land and real estate licensing.
The goal of this bill was to enable the Department to
V O L U ME 3 0 , I S S U E 5

improve service by processing certification requests and
subdivision reports more quickly. The Regulatory Fund
would also have made the Department less dependent
on the state’s General Fund, and enabled it to hire
additional staff and improve services for developers and
Realtors®. Like its partner, HB 2553, this bill was also
defeated in the House Appropriations Committee, where
a few lawmakers misunderstood its benefits for the
people of Arizona.
Fortunately, there is always next year.
Legislation rarely passes through the Legislature the first
time it is introduced, and these two bills are obviously no
exception. I am confident that next year’s Legislature will
be more understanding of the needs of our state’s
developers and Realtors®, as well as the need to provide
the Department of Real Estate with the resources it
needs to carry out its responsibilities.
I look forward to continuing to work with Commissioner
Elaine Richardson on these important issues, and hope
that together we can facilitate our state’s explosive
growth in a manner that benefits all of our state’s
residents.
Editor’s Note: Clancy Jayne is a member of the
Arizona State House of Representatives from District 6
and co-sponsored ADRE’s two legislative bills mentioned
above. Œ

Page 4

The Property Management Debate Over On-Site Licensing
By Guest Columnist Gina Hudson

Last year, Commissioner Elaine Richardson
hosted a series of Stakeholder Meetings with several
subcommittees, which were responsible for reviewing
real estate statutes and rules and making
recommendations on revisions, if needed, to the
Commissioner. One such subcommittee was the
Property Management Subcommittee. This
subcommittee failed to come to consensus on many
agenda items, one of which included security deposit
issues and the licensing of on-site staff.
More than half of the states in the country have
rules incorporated into their Landlord/Tenant laws and
into their Real Estate Statutes regarding the disposition
of security deposits. This continues to be an area of
concern in Arizona. Discussion ensued as to whether it
was proper for owners to keep security deposits, rather
than depositing the funds into a neutral Trust Account to
be held on the tenants’ behalf, which would ensure
accountability at the end of the rental period. A question
also arose about the propriety of not reporting these
funds given to owners in their 1099’s tax forms at the end
of the year as income. It was at least decided that the
recommendation would be made to the Commissioner
that lease agreements should require the disclosure of
who retains the tenant’s security deposit. That was a
beginning to address the increasing problem regarding
security deposits in this state.
The licensing of on-site staff has been an
ongoing issue between commercial managers and
managers of residential and small multi-unit properties,
each having valid arguments to support their positions.
In an article appearing in the December 2003 issue of
Apartment News Magazine by the Arizona Multi-Housing
Association’s lobbyist Suzanne Gilstrap, she stated that
the licensing of on-site managers was of “significant”
concern to the industry and explained why it should be
opposed. Among her reasons, she asserted that a real
estate license had “little to do” with property
management operations and would be of “no real value”
towards improving job performance or affording
protection to rental residents or property owners.
I cannot imagine how more professional training
would not benefit the public, tenants or property owners!
Ms. Gilstrap also pointed to the fact that the AMA and
other organizations provide in-house training to staff,
V O L U ME 3 0 , I S S U E 5

which in her opinion, appeared sufficient. She further
stated that leasing agents and managers did not
independently create lease agreements, that they
“merely present the lease amounts, terms, required
deposits and concessions established by the
management.”
Having personally observed managers and
leasing agents myself, I have found that they also
negotiate lease terms and amounts, make additions or
deletions to rental agreements and in general, can give
the appearance of being real estate agents. While some
of us in the industry may recognize the difference, the
public most certainly does not.
Lastly, Ms. Gilstrap explained that the licensing
of on-site personnel would impose “significant financial
burdens” on the Property Management industry. What
she really should have said is that it was the owners of
commercial properties that were worried about the
licensing of on-site staff as a financial “hardship” by
having to pay for more professional, licensed staff,
regardless of the benefits to the public. On the flip side,
residential property management companies have
licensed their personnel for years, as required by
Statutes, and they do not seem to be suffering a terrible
“hardship” to the industry as a whole. Their industry has
survived, even with the additional costs. Ms. Gilstrap is
simply wrong.
Even though our subcommittee could not reach
consensus about on-site licensing, we were afforded the
opportunity to discuss some of these very important
issues with Commissioner Richardson. I have found the
Commissioner to be in favor of increased education at all
levels of our industry –because it increases
professionalism and it protects the consumer. She is
also open to hearing about innovative solutions needed
for an industry facing new challenges everyday.
Commissioner Richardson’s commitment to bring change
where change is needed, to promote competency in all
areas of real estate in Arizona, and to clearly define the
obligations of each Arizona licensee is right. I look
forward to further discussions about the issue of
licensing for on-site staff.
Editor’s Note: Ms. Hudson is Registered Property
Manger, Designated Broker, Certified International Property
Specialist, Mediator, Educator and owner of Gina’s Property
Management & Realty, Inc. in Tucson. Œ
Page 5

Frequently Asked Questions (FAQ)...
Question: If I have a complaint filed against me can I appear before the
Advisory Board to tell my side of the story?
Answer: No, that is not the Advisory Board’s role. The Advisory Board exists to
“provide the Commissioner with such recommendations as it deems necessary and
beneficial to the best interests of the public.” It may also provide recommendations
on specific questions or proposals. It does not become involved in individual
disciplinary or licensing situations.
Question: If the Advisory Board does not hear disciplinary cases then
who does?
Answer: When the Investigation Division’s complaint investigation reveals
sufficient information to indicate a violation of real estate law or rule, it forwards the
case to the Administrative Actions Division. That Division may contact the licensee to
work out a “consent order” in which the licensee admits committing a violation and
accepts an agreed-upon disciplinary action. Alternatively, the Administrative Actions
Division may forward the case to the Office of the Attorney General for action.
Question: What happens if a case is sent to the Attorney General?
Answer: The Attorney General’s (AG) staff reviews the case and determines if they
believe they can prevail in a hearing. If so, the AG’s staff prepares a notice of hearing
and complaint, and a cease and desist order or a summary suspension order.
Hearings are held in front of an Administrative Law Judge (ALJ) at the Office of
Administrative Hearings. If the AG’s office does not believe there is sufficient
evidence for a disciplinary action, they return the case to the Department for
additional work or with the recommendation to close the file.
Question: What happens at a hearing?
Answer: Each side may present evidence, including documents, testimony, or other
evidence. The ALJ has 20 days to determine whether a violation occurred and what
the appropriate penalty (if applicable) is.
Question: Is the Administrative Law Judge’s decision final?
Answer: No, the ALJ prepares a document that contains findings of fact, (the facts
of the case), conclusions of law (what statutes apply and which were violated), and a
proposed order (how to resolve the case) which is sent to the Commissioner. The
Commissioner reviews this document and may accept, reject, or modify it and issues
her Final Order.
Question: May I appeal the Commissioner’s decision?
Answer: Yes, the case may be appealed to the Superior Court. Œ

V O L U ME 3 0 , I S S U E 5

Page 6

Illegal Subdividers Beware!
By Bill Day

The new ADRE administration under
Commissioner Elaine Richardson has placed a high
priority on combating illegal subdividing. The
Commissioner has created a special unit within the
ADRE’s Investigations Division to deal entirely with
illegal subdividing and subdivision violations. In addition,
ADRE has been working closely with Counties and other
State agencies to detect illegal subdividing, assist in
prosecuting illegal developers and bring the properties
into compliance with state laws and county ordinances.
Illegal subdividers beware–there are many eyes out
there looking for you!
In order to determine whether an illegal
subdivision has been or is being created, one needs to
review the Statutes. The definitions related to
subdividing include A.R.S §32-2101(1), “Acting in
Concert”, A.R.S. §32-2101(14), “Common Promotional
Plan”, A.R.S. §32-2101(53), “Subdivider”, and A.R.S.
§32-2101(54) “Subdivision”. The statutes for violations
of subdivision laws A.R.S §32-2181(A)(D) and A.R.S.
§32-2183(F). In addition, A.R.S. §32-2164 specifically
relates to licensees. Also, A.R.S.§32-2165(B)
designates illegal subdividing as a class 5 Felony.
In A.R.S. §32-2101(16), “Contiguous “ refers to
lots, parcels or fractional interests that share a common
boundary or point. This relates only to properties that
are not located within a subdivision development. Any
properties within a subdivision development, whether
they share a common boundary or point or not, are
automatically deemed to be contiguous. Therefore, if
one owns or has interest in more than five parcels
anywhere within the development, that person is
required to comply with the subdivision laws.
Even if lots or parcels are not contiguous, if they
are part of a common promotional plan or parties are
determined to be acting in concert, the creation of 6 or
more lots or parcels would also require compliance with
the subdivision laws pursuant to A.R.S. §32-2181.
Acting in concert is the most prevalent method persons
use to attempt to avoid the subdivision laws. To
determine whether persons are acting in concert, the
Department may consider any one or more of the
following:
• Familial relationship between parties.
• Business relationship between parties to buy, sell
and/or divide property.
V O L U ME 3 0 , I S S U E 5

Officers, members, managers or directors, or person
owning interest in one or more business entities or
partnerships, and/or partners in one or more
businesses.
• Lot release provisions to enable further divisions.
• Use of same surveyor, same real estate agent, and/
or notary public by multiple parties to the
transactions in question.
• Maps, drawings, or surveys of the parcel indicating
further division.
• Recorded or unrecorded conditions, covenants and
restrictions, or deed restrictions that may indicate
development activity.
• The timing of applications for permits for septic
tanks, wells or other infrastructure.
• Well-share or road maintenance agreements
between or among actual or prospective lot owners.
• The number and placement of easements.
• The manner in which transactions are structured
and/or closed.
Why do persons avoid the subdivision laws? It’s
simple – ignorance, money and greed. They may buy a
parcel of land and proceed to divide and sell it without
fully exploring the related rules and statutes. Or they try
to avoid the costs of properly subdividing the property.
As a result, the purchasers do not get what they are
entitled to. Most purchasers think they are getting a
good deal, until something goes wrong, for example, an
inadequate water supply, an inadequate water supply for
fire suppression, inadequate flood protection, emergency
vehicles not being able to get to the residence because
of inadequate roads, poor air quality due to dirt roads,
roads not up to county standards, and the list goes on.
Ultimately either the purchasers have to pay for the
improvements or the taxpayers must pay, when the local
government is forced to provide the facilities for health
and safety reasons. Illegal subdividing hurts everyone.
ADRE’s mission is to protect the public — this
responsibility is taken very seriously. Real estate
licensees are subject to revocation of their licenses.
Illegal subdividers, persons assisting them, and real
estate agents, beware – when ADRE finds you, we will
take action – and do not expect a slap on the hand.
Editor’s Note: Mr. Day is Deputy Director of
Investigations, has been with ADRE for 18 years, and is a
Certified Fraud Examiner. Œ
•

Page 7

Unlicensed Activity — Me?
By Tom Adams

The odds are most licensees in Arizona will
never find themselves in a position of having to respond
to a charge of conducting “unlicensed activity,” but you
never know. It can and does happen more frequently
than you might imagine.
There are a number of things that occur which
result in unlicensed activity, but one of the most common
involves a broker who also obtains a broker’s license for
a business (partnership, L.L.C., etc.). Frequently the
broker obtains the business’s license a few months after
renewing (or obtaining) the broker’s individual license.
The business license is issued for two years, the same
as any other license. Brokers sometimes become
confused about the distinction between their personal
broker’s license and their business license, and believe
they both expire together. For example, assume a
broker’s license expires on May 31 and the broker
renews it. A few months later the broker obtains a
business license that expires July 31. The broker
assumes that July 31 is the expiration of both licenses
and does not renew the broker’s personal license by May
31 and it expires. Sometime between May 31 and July
31 the broker wants to hire a new agent and submits the
appropriate paperwork to the Department, and is advised
the broker’s license has expired.
Sometimes licensees fail to obtain sufficient
continuing education hours before their licenses expire.
Checking with the Department, they learn they have a
year to make up the hours, but do not hear the part of the
discussion that says “but your license still expires at the
regular time.” These folks believe they have another full

year to work and obtain their CE credits when, in fact,
their licenses expired on the normal expiration dates.
While it is true there is a year in which the person can
renew without re-taking the tests, during that year they
are not licensed and cannot legally participate in any
activity requiring a license.
Earlier this year, the Department revised its
Substantive Policy Statements (SPS). During that
process SPS #8 (formerly #22) was revised to tighten the
requirements and increase the consequences for those
who participate in unlicensed activity. Now, if a licensee
conducts unlicensed activity for less than 30 days (and it
is the first time and there are no extenuating
circumstances) the Department will issue the licensee a
non-disciplinary Advisory Letter of Concern (LOC).
While not disciplinary, the LOC is maintained in the
licensee’s license file and can be used to determine the
appropriate discipline in any future similar cases.
Unlicensed activity lasting more than 30 days, or when it
is a second or subsequent violation, or involves
extenuating circumstances, is investigated and
processed fully for disciplinary action.
The Department’s intent in increasing the
emphasis on unlicensed activity and in tightening the
potential outcomes for such activity is to emphasize the
importance of maintaining a valid license and to express
the seriousness with which the Department views
violations of the licensing statutes.
Editor’s Note: Mr. Adams is the Director of
Investigations and has been with ADRE for one year. Œ

Why spend it waiting in line at
the end of the month, when
waiting and lines are longer?
Renew your license early and beat the rush!
Isn’t your time worth money?
V O L U ME 3 0 , I S S U E 5

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.

Let’s Meet the Administration Staff (continued…)
(continued from page 1)

Shirley Thomas
Administrative Assistant II HR
15 Years of Service
A native Arizonan, Shirley has a
son, the family’s first to graduate
from college at ASU. She is the
proud grandma of Mackenzie and
also enjoys yard work.

Jerry Baranuk
Administrative Assistant I
18.5 Years of Service
Jerry has been married almost
19 years and has an 18 year old
daughter. He likes to watch old
movies.
V O L U ME 3 0 , I S S U E 5

Sue LaBotz
Administrative Assistant II
8 Years of Service
Sue enjoys traveling, cooking and
reading.

Pattylou Stults
Mail/ File room Clerk
8.5 Years of Service
Pattylou enjoys participating in
almost any sport except football.
She likes the “physical workout”
part of her job the best.
Page 9

Administrative Actions
COMMISSIONER’S ORDERS
Disciplinary Actions
Patrick Joseph Logue and Urban Investment
Corporation (Phoenix)
File No. 01A-145-REL, Amended Order 6/24/2004
After hearing, Logue was issued a 21-month provisional
real estate broker's license subject to specified terms and
conditions, based on Logue's violation of A.R.S. § 322153 (B)(8) during the term of commercial property
management agreements between Mazarine Investment
and Urban Investment Corp., Logue’s company.
Enrique Recendiz (Phoenix)
File No. 04F-095-REL, Order 6/22/2004
After a hearing, the Commissioner revoked Recendiz's
real estate salesperson’s license and assessed a civil
penalty of $2,000 based on both his felony conviction for
Filing False Statements with the U S Dept of Housing &
Urban Development, and his debarment by HUD from
procurement and non-procurement transactions with
HUD. This is based on violation of A.R.S. § 32-2153 (B)
(2), (B)(5), (B)(7) and (B)(10).
Appealable Agency Actions
Dale E. Litwiller (Phoenix)
File No. 04F-071A-REL, Order 6/23/2004
After hearing, the Commissioner ordered that the Cease
and Desist Order issued to Litwiller remain in effect; that
he refrain from engaging in real estate brokerage
activities until he is licensed; that he provide a list of
clients from whom he accepted money for the sale, lease
or showing of real estate; that he return all monies given
to him for any reason regarding his real estate activities;
and assessed a civil penalty against him of $1,000 for his
violation of A.R.S. § 32-2122(B).
Maria De La Riva (Phoenix)
File No. 04F-087-REL, Order 6/17/2004
After hearing, De La Riva was granted license renewal
and issued a 2-year provisional license subject to
specified terms and conditions, and was assessed a civil
penalty of $2,000. This was based on her misdemeanor
conviction of Making False Statements to HUD and
V O L U ME 3 0 , I S S U E 5

failure to disclose the conviction to the Department
within 10 days, in violation of A.R.S. § 32-2153 (A)(3),
(B)(2), (B)(5) and (B)(10).
SETTLEMENTS BY CONSENT ORDERS
Disciplinary Actions
Gloria Cisneros (Phoenix)
File No. 04F-022-REL, Consent Order 7/22/2004
In a transaction where she represented the buyers,
Cisneros altered a document signed by the sellers and
caused the document containing the statement to be
distributed or circulated, in violation of A.R.S. § 32-2153
(A)(4), and failed to disclose her familial relationships
with the loan officer and the escrow officer in a
transaction, in violation of A.A.C. R4-28-1101 (E)(4) and
A.R.S. § 32-2153 (A)(3). The Commissioner suspended
Cisneros's license for 60 days and assessed a $1,000
civil penalty
Ruth Karr (Scottsdale)
File No. 03A-108-REL, Consent Order 7/20/2004
Karr failed to place all checks or items of value in the
care of her designated broker, as required by A.R.S. §
32-2151.01(D), commingled client funds with her
personal funds, in violation of A.R.S. § 32-2153 (A)(16);
failed to act expeditiously in performing acts for which a
license is required in violation of A.A.C. R4-28-1101(C);
failed to secure earnest money and/or to advise her
client that the deposit had not been provided as
represented in the purchase contract, breached her
fiduciary duty to her client and failed to deal fairly with all
Page 10

Administrative Actions (continued…)

parties to the transaction, in violation of A.A.C. R4-281101(A) and A.R.S. § 32-2153(A)(3). The Commissioner
assessed a $2,500 civil penalty and ordered Karr to
attend 12 credit hours of approved real estate courses.
KBOne, Inc. (Minneapolis, MN)
File No. 04F-094-REL, Consent Order 7/13/2004
KBOne acquired 6 lots in an approved subdivision from
KB Home-Phoenix. KBOne listed the 6 model homes for
sale with KB Home-Phoenix and sold 3 without providing
purchasers with a Public Report issued to KBOne or
obtaining an exemption, in violation of A.R.S. § 32-2183
(F). In mitigation, purchasers were provided with KB
Home-Phoenix's Public Report, and the only change to
the report was the owner. KBOne is assessed a civil
penalty of $1,000.
Appealable Agency Actions
Medea Bevier (Tempe)
File No. 04F-141-REL, Consent Order 7/22/2004
The Department denied Bevier's application for real
estate salesperson's license under A.R.S. § 32-2153
based on two misdemeanor convictions for DUI with .08
percent or more B.A.C. in California in January 2003 and
June 1997. Bevier appealed the denial and was granted
a 2-year provisional real estate salesperson's license
subject to specified terms and conditions.
Albert Black (Prescott)
File No. 04F-040-REL, Consent Order 7/8/2004
The Department denied Black's application for renewal of
his real estate salesperson's license under A.R.S. § 322153 based on his 2002 conviction for Domestic
Violence Assault, a misdemeanor, and his failure to
disclose the conviction to the Department within 10 days.
Black appealed the denial and was granted a provisional
license subject to specified terms and conditions, and
assessed a civil penalty of $500.

complained that they were never told that SK Ranch
subdivision near Casa Grande was adjacent to and may
have been part of a small airport used for crop-dusting
activities over several decades; that there was a special
assessment district for road construction and
maintenance for which the buyers were responsible; and
that six of the lots KB Home was marketing were actually
owned by another entity, KBOne, Inc. a Virginia
corporation. KB Home appealed the denial and was
granted renewal of its license; assessed a civil penalty of
$5,000; required to reimburse the Department's
investigative costs of $3,800; required to reimburse eight
purchasers who did not receive notice of the special
assessment before they closed on their home purchase;
and contributed $35,000 to the Real Estate Education
Fund. KB Home must also inform SK Ranch
homeowners where they can view the environmental
reports it relied on concerning SK Ranch, will provide a
copy to the SK Ranch homeowners upon request, and
work with colleagues and the Department to help
establish means and methods for ensuring responsible
industry compliance with disclosure requirements, and
the Department's enforcement of those requirements.
Adam Dwight Koster (Cottonwood)
File No. 04F-143-REL, Consent Order 7/8/2004
The Department denied Koster's application for real
estate salesperson's license under A.R.S. § 32-2153
based on his two felony drug possession convictions.
Koster appealed the denial and was granted a 2-year
provisional license subject to specified terms and
conditions. Œ

KB Home Sales-Phoenix, Inc. (Phoenix)
File No. 03A-098-REL, Consent Order 6/23/2004
The Department denied KB Home's application for
renewal of its real estate broker's license under A.R.S. §
32-2153 based on the adequacy and accuracy of
information disclosed in its Public Report. Homebuyers
V O L U ME 3 0 , I S S U E 5

Page 11

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
Gary Brasher, Vice-Chair
Richard C. Allen
Eugene E. Cox
Vicki L. Cox-Golder
Gary Lee
Vince Pellerito
Lisa A. Suarez
Felipe Andres Zubia

© 2004, 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
ABOVE. FIRST-CLASS MAIL SUBSCRIPTIONS ARE AVAILABLE FOR $10 PER YEAR. ARTICLES
REPRINTED FROM OTHER PUBLICATIONS DO NOT NECESSARILY REFLECT THE POLICIES OR
INTERPRETATIONS OF LAW BY THE ARIZONA DEPARTMENT OF REAL ESTATE. THE ARIZONA
DEPARTMENT OF REAL ESTATE IS AN EQUAL EMPLOYMENT OPPORTUNITY , REASONABLE
ACCOMMODATION AGENCY.