B u l l e t i n

Arizona Department of Real Estate

T h e

Arizona –Mexico Commission
Summer Plenary Session
COMING SOON!
(See Commissioner’s Corner
for further details!!)

AFFIDAVITS OF VALUE AND THE FRAUDULENT OWNER-OCCUPANT CHECKBOX
by Amy Bjelland
No one likes to pay taxes, and we all
want to save a few dollars whenever possible,
however, fair is fair and we all must play by the
rules. In Arizona, the rules require that when purchasing real property, an Affidavit of Value must
be completed. Included in the Affidavit of Value is
whether the property will be owner-occupied
or rented to non-family members.
In today’s real estate market, one factor
recognized by buyers and sellers is that the median price of a residential home continues to rise,
seemingly without limit. In the regulatory world,
the Department hears anecdotal evidence of the
various factors contributing to this rise, including
an astonishing rate of population growth in Arizona over the last several years. In addition we
have the so-called “California investors” seeking choice investment properties to purchase and “flip” in this hot market.
Of increasing concern to the Department is the proliferation of reports that real estate
salespersons and brokers are advising their investor clients to misrepresent themselves as the
owner-occupant of many of these residential
homes, when the licensees are well aware that
the home is in fact an investment property. Failure
to accurately complete the Affidavit of Value in this
manner constitutes a Class 2 misdemeanor and
the Department is prepared to take action
against licensees who condone or advise their
clients to check the owner-occupant box in spite

Volume 31, Issue 2

Editor’s Note: Amy Bjelland
is an attorney, the Director
for Administrative Actions and
has been with ADRE for
nearly 1 yrear.

Inside this issue:
Affidavits of Value

1

Kudos for Department

2

Commissioner’s Corner

3

2005 Residential Resale Real Estate Contract

4-6

ADRE Continuing Ed. On Residential Real Estate

6-7

Arizona-Mexico Commission

May 2005

knowing or having reason to know that the real property purchase is an investment.
When the Department becomes aware of a
licensee who advises a client to mark the owneroccupant checkbox of the Affidavit of Property Value
rather than the appropriate box indicating that the
property will be rented to someone other than “family
members,” this will be considered a breach of the
licensee’s fiduciary duty and a failure to deal fairly
with all parties. It will also be considered substantial
misrepresentation and fraud. This activity is becoming of increasing concern to local and state governments alike, as it affects the tax base at its most fundamental level.
The main message for licensees is to keep your clients honest by being honest with them about property taxes for residential rental properties. If you
know of any person, licensed or not, engaging in this
form of misrepresentation, please notify the Department. After all, you are paying the taxes they are
avoiding.

FSBOs, Lenders & Limited Representative Brokers

7
8-9

Frequently Asked Questions

10-11

ADRE 2005 Rules Directory

12-13

Administrative Actions

14-18

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.

KUDOS FOR ADRE
ADRE Law Book
In the April 2005 Brodsky School of Real Estate newsletter, the
headline read, “REAL ESTATE DEPARTMENT HITS
ANOTHER HOME RUN.” What was being acknowledged was
the Department’s new handy-sized Real Estate Law Book. The
book is more user friendly then the previous seven-ringed
binder. Brodsky gave ADRE a pat on the back by saying, “Our
congratulations to ADRE. This administration is really
responsive not only to the Arizona public, which it is charged to
protect, but also to the licensees, who it regulates.”

Consumer Guide continues to be well
received!
A licensee wrote us stating, “I read the book from
cover to cover, and I think it’s fantastic! For a
person that doesn’t know anything about buying or
selling real estate, it is very easy to understand,
practical and helpful. The reader does not feel like a
‘dummy’ and yet is written in such simple language
that a child could understand it (or a young person!)
This is a REAL SERVICE AND BENEFIT for the
public in my opinion. Very down to earth, extremely
helpful, practical, useful and interesting.”

Late Breaking News
Do you want to be on the list of people who receive up-tothe minute news from the Department? We receive
numerous emails saying how much they appreciate
receiving the information and how useful the information is.
The Department uses the Late Breaking News as a
venue to provide a variety of information to the public and
the licensees.

Ken Lamb
Customer Assistance Team (C.A.T.)
How do you get licensees to use the Online License Renewal
System (OLRS)? One way is to keep bringing OLRS to their
attention on a regular basis. The OLRS Project Team decided
on March 15th that one method would be to develop an “eye
catching” poster to placed in the lobbies of both Phoenix and
Tucson offices.
Easier said than done! The Team thought of the untapped talent among ADRE employees and decided that it would be a
terrific manner to utilize that talent as well as reward the employees. It was decided that a contest would be held and the
“best” poster would be chosen. The employee who created the
best poster would receive two movie tickets as well as a day
off. Entries were submitted and the OLRS Project Team reviewed the entries and decided on a winner. The winner was
Ken Lamb! (The poster can be seen at either the Phoenix or
Tucson offices.) There was another winning creative submission, however, it did not meet the poster criteria. Joann Medina received movie tickets for her banner which can also be
seen at the ADRE offices.

To subscribe or unsubscribe, go to the Department’s web
site: www.re.state.az.us and click on the Late Breaking
News.

V O L U ME 3 1 , I S S U E 2

Page 2

COMMISSIONER’S CORNER
VIGNETTES AND HAPPENINGS AT ADRE
I realize most of you have busy days working and handling this very
active real estate market. I also realize that the day-to-day
operations at ADRE may be of interest. This was sharply brought to
my attention a week or so ago when I received a call from a licensee
who had a complaint about the wait time he experienced when
renewing his license. I asked if he considered renewing on-line and
he did not know what I was talking about. After my initial surprise at
his not knowing about on-line licensing after all the different
communiqués the Department has broadcast, I realized perhaps he
and other licensees were just not aware of some issues that go on
at the Department that could impact their day.
LICENSING
There will be two kiosks set up in the inner lobby at ADRE for
renewing on-line. Help will be available from one of our professional
staff members. The kiosks are now in place.
In April, 519 licensees renewed their licenses on-line; this number is
21.6% of all of April renewals. In May, 739 licensees renewed online.
Applications received via mail currently have a turn-around time of 4
weeks (down from 6 to 8 weeks).
EDUCATION
The new Education Advisory Committee had its first meeting on May
4th. It is an exciting new Committee; watch for news of the
progress. Cindy Wilkinson has been named the new Director of
Education (effective 6/6/05) to replace David Jankofsky, who
accepted a position with the Department of Transportation.
INVESTIGATIONS
There were 101 new complaints filed with ADRE in April.
AUDITING
There were 329 Broker Audit Declarations received in April. Of that
number, 241 were complete and accepted; 114 were incomplete

and not accepted.
CONSUMER ASSISTANCE TEAM

Consumer Assistance Team (CAT) received 6,341 calls in
April.

SUBDIVISIONS
170 Applications for Public Reports were received in April.
LEGISLATURE
The Department received a 10.4% increase for FY 2005-06 over the
Department’s prior appropriation for FY 2004-05. What this means is
that it will enable the Department to fund some of the vacant
positions, particularly in Licensing and Subdivisions. Kudos to Tom
Farley of AAR and other stakeholders who assisted the Department
in the legislative and budgetary process.
HB2184, the Department’s bill, passed both the House and Senate
and was signed into law by the Governor on April 13th. Details of
the bill are on the Department’s website.
ARIZONA MEXICO COMMISSION
How exciting is this? As a Co-chair on the Real Estate Ad Hoc
Committee for the Arizona Mexico Commission (AMC), one of our
tasks was to identify Action Items. All 14 committees of the AMC
have the same task for their respective issues. That’s a lot of Action
Items. These Action Items then set the tone for the work that the
respective committees intend to accomplish. The Governors of both
Arizona and Sonora select certain of the Items and make them a
priority for the entire Annual Plenary Session.
Now comes the exciting part. The Real Estate Ad Hoc Committee’s
Action Item 2, “To coordinate with Sonora developers to create a
process of subdivision authorizations and the issuance the Arizona
Public Report for said subdivisions”, was selected as a priority Item
for the upcoming plenary. What does this mean? It means that we
will not have to reinvent the wheel whenever we receive an
application for a Public Report for a subdivision approval in Sonora.
The AMC Summer Plenary Session will be held June 16-18th at the
JW Marriott Starr Pass Resort. I have been honored to be chosen by
the AMC to receive the Tony Certosimo Award on Saturday, June
18th at the Plenary Session.
NEW:
A new Stakeholder Committee has been formed called Cross
Border Transactions. Look for updates as they unfold.
All in all each day seems busier than the day before at ADRE, but I
know that each and every one of you can probably relate.

ADMINISTRATIVE ACTIONS
The largest number of cases involves new applicant denials for prior
felony or other convictions. That is followed by cases involving
subdivisions, unlicensed activity and false applications. There are
186 open Compliance cases.
V O L U ME 3 1 , I S S U E 2

Page 3

INTRODUCING THE AAR
2005 RESIDENTIAL RESALE REAL ESTATE PURCHASE CONTRACT
By
Michelle Lind

The Arizona Association of REALTORS® (“AAR”) Residential
Resale Real Estate Purchase Contract (“Contract”) has been
revised by several workgroups led by Chairperson Laura
Mance. Several specialized groups, including the Lenders
Group, the Title/Escrow Group, the Home Inspectors Group,
and the Attorneys Group provided recommendations to the
Forms Steering Group concerning the areas of the Contract
affecting those industries. The following is a summary of some
of the major changes from the 5/00 contract.
FORMAT
The Contract format was changed in an attempt to make the
form more “readable.” The Receipt section was omitted and
the Offer section is now entitled Property. The Warranty
section was separated from the Inspection section. The
Inspection section is now called Due Diligence to reflect the
fact that investigations are performed in addition to physical
inspections of the property.
CURE PERIOD
If a party fails to comply with any provision of the Contract, the
other party must deliver a notice to the non-complying party
specifying the non-compliance. If the non-compliance is not
cured within three days after delivery of the notice (“Cure
Period”), the failure to comply becomes a breach of Contract.
In some cases, if the cure notice is not immediately delivered,
the Cure Period may delay Close of Escrow (COE) for up to
three days.
FINANCING SECTION
The Financing section was revised to obligate the buyer to
take specific steps to obtain a loan and to clarify the financing
contingency.
The Contract is contingent upon the buyer obtaining loan
approval for the loan described in the AAR Loan Status Report
without conditions no later than the COE Date. If the loan
contingency is unfulfilled, the Contract is terminated. The
buyer is obligated to deliver a notice of the inability to obtain
loan approval to the seller or the escrow company no later
than the COE Date. If the buyer fails to deliver this notice by
the COE Date, the seller must give the buyer cure notice and
a three-day opportunity to deliver the notice of the unfulfilled
contingency. If the buyer fails to deliver the notice, the buyer
is in breach for failure to deliver the notice, and the seller
agrees to accept the earnest money as damages.
The Contract is cancelled for an unfulfilled contingency if, after
diligent and good faith effort, the buyer is unable to obtain loan
VO L U ME 31 , I S SU E 2

approval without conditions by the COE Date. The inability to
obtain loan approval by the COE Date is not a breach of
contract; therefore, the Cure Period does not apply to extend
COE.
The Contract is contingent upon an appraisal of the Premises
for at least the sales price. If the Premises fails to appraise for
the sales price, buyer has five days after notice of the
appraised value to cancel the Contract or the appraisal
contingency is waived. If the buyer is unable to obtain the
loan and close escrow after waiving the appraisal contingency,
the seller should deliver the Cure Notice to the buyer. If the
buyer fails to close within the Cure Period, the buyer has
breached the Contract and the seller agrees to accept the
earnest money as damages.
The AAR Loan Status Report (“LSR”) must be attached to
every offer and must have, at a minimum, the Buyer’s Loan
Information section completed, describing the current status of
the buyer’s proposed loan. The requirement that the LSR be
attached to every offer does not necessitate that the buyer
obtain pre-qualification from a lender prior to submitting an
offer; the buyer can simply indicate on the LSR that the buyer
has not yet had the opportunity to visit a lender.
Unless the buyer has previously completed the loan
application and related actions, the buyer is obligated to
complete a loan application, grant the lender permission to
access buyer’s credit report, and pay all loan application fees
within five days after Contract acceptance.
The buyer is required to sign all loan documents three days
prior to the COE Date to allow the funds to be ordered and
escrow to close as agreed. If documents are not available for
signature by the COE Date because the buyer has not
obtained loan approval, the loan contingency is unfulfilled and
the Contract is cancelled. If the buyer has obtained loan
approval but does not sign the loan documents within three
days after receiving the Cure Notice, the buyer is in breach of
Contract and the seller may pursue the remedies for breach.
DISCLOSURES SECTION
The Disclosures section has been reduced and simplified.
The seller is obligated to deliver a written insurance claims
history from the seller’s insurance company, an insurance
support organization (such as the Comprehensive Loss
Underwriting Exchange “C.L.U.E.”), a consumer reporting
Page 4

2005 RESIDENTIAL RESALE REAL ESTATE PURCHASE CONTRACT
Continued from page 4

within five days after Contract acceptance.
The seller agrees to immediately notify the buyer of any
changes in any of the seller’s disclosures. Unless the seller is
already obligated to correct or repair the changed item, the
buyer has five days to provide notice of disapproval.
In addition to the warranties in the 5/00 contract, the seller
warrants that, at the earlier of possession or COE, all agreed
upon repairs and corrections will be completed and all
personal property not included in the sale and all debris will be
removed from the Premises.
DUE DILIGENCE SECTION
The Inspections section is now entitled “Due Diligence” to
reflect the fact that both inspections and investigations of the
home should be performed.
The “laundry list” of possible inspections and investigations
has been omitted and replaced with general categories of
inspection and investigation items. The buyer is advised to
consult the Buyer Advisory to assist in the due diligence
inspections and investigations.
Prior to expiration of the Inspection Period, the buyer may
deliver notice of any items disapproved. The disapproval
process is essentially unchanged from the 5/00 contract, but
the language was clarified and several issues that had caused
disputes are specifically addressed. Notably, the buyer’s
disapproval no longer must be reasonable.
AAR’s Buyer’s Inspection Notice and Seller’s Response form
(“BINSR”), which was revised in conjunction with the Contract,
is available for the disapproval notice. The BINSR now
contains provisions for the buyer’s notice, the seller’s
response, and the buyer’s election, as well as a space for
notice of non-working warranted items. All desired inspections
and investigations must be conducted prior to delivering the
notice and all due diligence items disapproved are to be
provided in a single notice.
If the seller agrees in writing to correct any items disapproved,
the corrections must be made, any repairs completed in a
workmanlike manner, and any paid receipts evidencing the
corrections and repairs delivered to buyer three days prior to
the COE date. If the seller fails to complete the repairs three
days prior to the COE Date and the buyer immediately
delivers the cure notice, the seller will be liable for breach of
contract and breach of warranty if the repairs are not complete
by COE.
VO L U ME 31 , I S SU E 2

REMEDIES SECTION
The remedies provisions have been revised in two primary
respects. First, as previously discussed, the parties are given
an opportunity to correct or “cure” potential breaches of the
Contract. Secondly, the Contract defaults to binding
arbitration to settle disputes not resolved in mediation, unless
one of the parties opts out.
Breach: If after receiving the notice of non-compliance the
party does not perform the specified obligation during the Cure
Period, the non-complying party is in breach of Contract. In
the event of buyer’s breach arising from the failure to deliver
the notice of the inability to obtain loan approval or the inability
to obtain loan approval due to the waiver of the appraisal
contingency, the seller agrees to accept the earnest money as
the sole right to damages.
Alternative Dispute Resolution (“ADR”): The buyer and
seller agree to mediate disputes. If mediation does not
resolve the dispute, the unresolved dispute must be submitted
to binding arbitration unless either party opts out within thirty
days after the conclusion of the mediation conference by
notice to the other. If a party opts out of arbitration, either
party has the right to resort to court action.
ADDITIONAL TERMS AND CONDITIONS SECTION
Calculating Time Periods: This provision explains how time
periods in the Contract are to be calculated. The day of the
act or event from which the time period begins to run is not
included (i.e., the date of Contract acceptance), and the last
day of the time period is included. Acts that must be
performed three days prior to the COE Date must be
performed three full days prior; for example, if the COE Date is
Friday, the act must be performed by 11:59 p.m. on Monday.
Notice: Unless otherwise provided, delivery of all notices and
documentation required or permitted in the Contract must be
in writing, addressed as indicated in the referenced sections,
and are deemed delivered and received when hand-delivered,
faxed, emailed if email addresses are provided, or sent by
overnight courier.
Broker on Behalf of Buyer or Seller: The broker and
salesperson contact information is included in these
paragraphs for addressing notice to the buyer or seller and for
agency confirmation.

(Continued on page 6)

Page 5

2005 RESIDENTIAL RESALE REAL ESTATE
PURCHASE CONTRACT
Continued from page 5

CONCLUSION
The new AAR Contract attempts to address many of the
issues in the 5/00 contract that caused confusion and
and disputes. The revisions in this Contract should make
transactions proceed more smoothly and reduce liability for
the parties and the brokers. Sample copies of the Contract
and related addenda, along with tools to assist in learning
and using the Contract are available on AARonline.com.
Michelle is General Counsel to the Arizona Association
of REALTORS® and a State Bar of Arizona board certified real estate specialist.
This article is of a general nature and may not be updated or revised for accuracy as statutory or case law
changes following the date of first publication. Further,
this article reflects only the opinion of the author, is not
intended as definitive legal advice and you should not
act upon it without seeking independent legal counsel.

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.

Do you have an article idea?*
If you would like to submit an article to be
co
connsidered for inclusion in The Bulletin, please
send your article to the Editor via email at:
mutley@re.state.az.us.

.

Submissions must be in MS Word format and
less than 500 words.

V O L U ME 3 1 , I S S U E 2

Information from ADRE on Continuing Education and
The Residential Resale Purchase Contact
By David Jankofsky
The Arizona Department of Real Estate recently issued Substantive Policy Statement (SPS) 2005.12: Continuing Education and the Residential Resale Purchase Contract. This
SPS is available on the ADRE Website at www.re.state.az.us.
Transactions involving the resale of residential real estate
make up the bulk of real estate sales in Arizona. Accordingly,
licensees need to be current on the changes within their industry, laws, and be knowledgeable about other tools at their disposal to complete these transactions.
One change is an updated Residential Resale Purchase Contract developed by The Arizona Association of REALTORS®
(AAR).
ADRE has the authority to approve courses and their instructors. Pursuant to this authority the Commissioner on April 1
issued the new SPS. It states in part:
1.
Schools intending to teach a course concerning the
provisions of the new 2005 AAR Contract must apply for a
Certificate of Course Approval at least thirty days prior to holding the course. A course on this subject approved by ADRE
prior to this SPS is not considered a currently approved course
due to the significant changes in this Contract.
2.
Schools wishing to present this new course (in addition to getting the course approved) must submit documentation that the instructor(s) proposed to teach it, in addition to
having the other qualifications necessary to be an instructor,
have attended one of AAR’s “Train-the-Trainer” Instructor Development Workshops (IDW) or must have attended a course
on this subject taught by an instructor who had previously attended an AAR-IDW on the 2005 Contract.
The IDW course may be offered for Continuing Education
Credit under the Contract Law category
While the AAR has developed this form and uses it as a model
for its members to use in their transactions, there is nothing in
statute or rule that requires this particular form of contract to be
used in a residential resale transaction. However, if schools
and/or instructors choose to fulfill the requirement for Contract
Law in another manner, they are free to do so.
(Continued on page 7)

Page 6

Continuing Ed. And the Residential Resale Purchase
Contract
Continued from Page 6

The SPS establishing this procedure will be in effect for one
year from its issuance.
In the past few weeks there have been many
“conversations” over the Internet and other media on who
would be authorized to teach the new course. However,
there has been little attempt to contact ADRE to ask for an
official interpretation. While the input and comments of
ADRE’s stakeholder community are important, ultimately,
the approval of courses and their instructors are the province
of the Commissioner.
To add a professional focus to ADRE’s service in the area of
education, the Commissioner has, effective March 1, separated education from the Licensing and Education Division;
creating a stand-alone Education Division. The mission of
this new division is to raise the quality of real estate education in the State of Arizona so that the public interest is protected.
ADRE urges all those with questions regarding education in
particular and ADRE in general to contact the appropriate
ADRE Division. It is there that authoritative information will
be found.
The General Information Line for the Education Division
is: 602-468-1414, Extension 100.
Director

Editor’s Note: David Jankofsky was the
for the Education Division for ADRE until May
31, 2005.
He accepted a position with the Arizona Department of

.

NEWS FROM THE AMC
Gary Brasher was recently appointed by Governor Janet Napolitano to serve on the Real Estate
Ad Hoc Committee. He will be
serving as Co-Chair along with
Commissioner Elaine Richardson.
Mr. Brasher is President of Brasher Real Estate, Incorporated, based in Santa Cruz County. He was
first licensed as a real estate salesperson in 1981
and became a real estate broker in 1984.
Mr. Brasher obtained a B.A. from Arizona State University and is also a licensed pilot. He has been responsible for developing the master-planned community of Barrio de Tubac. He and his family live in
Tubac and are active in their community.
In 2003 Mr. Brasher was appointed by Governor
Napolitano to serve on the ADRE Advisory Board.
His term expires in January 2009.
Mr. Brasher is actively working with the Real Estate
Ad Hoc Committee members on recruiting individuals to join the Arizona-Mexico Commission (AMC)
as well as preparing for the Committee meeting that
will take place at the AMC Plenary Session in Tucson in June, 2005.
For further information regarding the AMC Summer
Plenary Session, you may go to the Arizona-Mexico
Commission web site: www.azmc.org

V O L U ME 3 1 , I S S U E 2

Page 7

FSBOs, Lenders, and Limited Representation Brokers
by Tom Adams and K. Michelle Lind, Esq.
Real estate, as everyone knows, is a very hot market in Arizona these days, and there are any number of people looking for ways to “get a piece of the action.” Sometimes the
procedures used are legal and sometimes they are not.
One recent trend involves lenders who target “for sale by
owner” (FSBO) properties for the purpose of holding open
houses (where lender signage is displayed at the property
and prospective buyers are met by the loan officer/nonowner). This is promoted as a marketing assist for the
owners and the lender hopes to finance the purchaser.
The Department of Real Estate's position is that a lender
who is holding open houses and meeting prospective buyers for FSBOs is engaged in conduct that constitutes the
practice of real estate and requires a real estate license.
A.R.S.§ 32-2122(D) states “[a]ny act, in consideration or
expectation of compensation, which is included in the definition of a real estate… broker, whether the act is an incidental part of a transaction or the entire transaction, constitutes the person offering or attempting to perform the act of
a real estate broker… within the meaning of this chapter.”
A.R.S.§ 32-2101(47) defines real estate broker as “… a
person, other than a salesperson, who, for another and for
compensation: (i) [a]ssists or directs in the procuring of
prospects, calculated to result in the sale, exchange, leasing or rental of real estate or timeshare interests.” There
may be other applicable portions of A.R.S. § 32-2101(47),
as well, but in any event the lender is performing a service
to facilitate the sale of the property of another in anticipation of compensation, which is real estate activity and requires licensure.

estate broker from limiting the service that the broker
provides to a buyer or seller, A.A.C. R4-28-1101(A)
states that “[a] licensee owes a fiduciary duty to the client and shall protect and promote the client's interests.”
Assuming that the seller in a limited service listing is in
fact a “client” as that term is used in the Rule, the Rule
can be interpreted to apply only to the extent of any written agreement between the broker and client on the services to be provided. Further, although A.A.C. R4-28802(B) requires a broker to promptly submit all offers to
the broker’s client, the broker may be released from this
duty if otherwise provided in the listing agreement.
In regards to the buyer’s broker who wants to submit an
offer to the seller, A.A.C. R4-28-1102, which states: “
[e]xcept for owner listed properties, negotiations shall be
conducted exclusively through the principal's broker or
the broker's representative unless: 1. [t]he principal
waives this requirement in writing, and 2. [n]o licensed
representative of the broker is available for 24 hours” is
an issue. However, the sellers and the limited service
broker can satisfy this Rule by providing a written waiver
(preferably in the listing agreement) and indicating
(preferably in the MLS) that no licensed representative is
available to present/negotiate the offer. If the waiver and
indication that no licensed representative is available is
not stated in the MLS, the buyer’s broker should ask the
seller or listing agent for written confirmation prior to
commencing negotiations.

Although a broker can limit the services the broker provides to a client, a broker cannot limit the regulatory auAnother issue concerns brokerages that approach FSBOs thority of the Department of Real Estate. Therefore, a
for a "listing" that amounts to charging a flat fee to place the “limited service broker” is required to comply with all real
property on the Multiple Listing Service (“MLS”). The own- estate statutes and rules, including A.R.S.§ 32-2151.01
ers/sellers agree to pay the MLS-offered co-broke and
(A), which requires that “[e]ach licensed employing broagree that the "listing" brokerage does not represent the
ker shall keep records of all real estate…transactions
owners. The owners/sellers are "on their own" unless they handled by or through the broker.”
agree to pay additional fees for additional services. Arizona statutes do not prohibit “limited service listings,”
Although lenders and brokers are licensed to perform
where the seller pays the listing broker a flat fee to place
certain functions, there are limitations and requirements
the property in the MLS and agrees that the listing broker
governing their activities, and these limitations must be
will perform no other services.
considered while developing new and innovative
(Continued on page 9)

Although there are no statutes or rules that prohibit a real
VO L U ME 31 , I S SU E 2

Page 8

FSBOs, Lenders, and Limited Representation Brokers
Continued from Page 8

approaches to service the growing real estate market. A
general rule to consider is, if in doubt, check it out. Contacting the Department of Real Estate for advice prior to
implementing a new process may avoid problems and
ease transitioning into untested waters.
Editor’s Note: Tom Adams is the
Director of Investigations and
Auditing for ADRE. K. Michelle Lind
is General Counsel for the Arizona
Association of REALTORS® .

I HAVE A LICENSE – NOW WHAT?
By Cec Daniels, e-PRO, GRI
Where is that line drawn between success and failure in real
estate? As a trainer in real estate, I am passionate with the
opinion that your greatest asset is knowledge and that failure
begins when a licensee feels they know everything. Stop
learning and you will stop earning.
Let’s start drawing that line. Real Estate commissioned sales is the highest paid hard work and the lowest paid
easy work of anything available to you. In realty, we start
each day being unemployed. Accept that fact, and you have
begun to draw that line.
You are a business within a business and you have to
think like a business person. You need a business plan that
will establish your objectives and chart the path of success.
These plans are available in Software, publications and training programs like the REALTOR® Institute (GRI).
In my opinion, one of the biggest mistakes out there is
the majority of agents who get their required 24 hours of continuing education in the 24th month. Such a work ethic can do
more harm than good. Major changes occur in this industry on
a daily basis. Waiting two years puts you on the wrong side of
the line. I said earlier that knowledge is the key. Here is a tip:
“When you go to classes, keep the certificates in your resource material so potential clients can see the steps you take
in order to be of benefit to them.” The prices in real estate today have brought a very sophisticated buyer and seller to us.
At a minimum, we need to mirror that sophistication.
If at all possible, get into a mentor relationship with an
experienced agent for the first year or so. There are some
highly skilled resource people in the industry that operate

VO L U ME 31 , I S SU E 2

Page 9

I HAVE A LICENSE – NOW WHAT?
Continued from page 9

under an umbrella of “coaching.” They are worth a look. Consider a designation program because they are taught by some of
the most highly skilled trainers. All of these options are readily
available.
I hear agents talk about commission splits all of the
time. In many instances, agents approach this split issue from
the perspective of how much they are paying the broker. OOPS!
The law is pretty clear on who owns the commission and all of it
belongs to the broker. I am of the opinion that making a choice
of a broker solely on the commission split is poor judgment. It’s
nice to get all of the commission, but the key to personal income
is the number of transactions, not the split.
There are designations available to you that will raise
your skill level and benefit to the public. Many of them have targeted curriculums for specialists and others are there for enhanced knowledge. Applied technology has risen to the level
that the client and customer will pass you by because you are
not in their line of sight as they explore the market.
Editor’s Note: Cec Daniels is an
educator, school owner and broker
who has served on various AAR
committees.

V O L U ME 3 1 , I S S U E 2

FREQUENTLY ASKED QUESTIONS
BY
Tom Adams

1. Can a broker/salesperson give a “rebate” or “refund”
directly to a client at close of escrow?
The way the law is structured it requires the title company to
pay commissions to the broker. If the broker provides written
directions to the title company instructing that a portion of the
broker's commission be returned to the client the title company
may make the payment directly. The title company should
indicate in its paperwork the total commission to go to the
broker and the distribution of that total.
Obviously the broker is restricted from directing a payment to
a third (unlicensed) party for a referral fee, however a "refund"
or "rebate" to the client is allowed under the above
circumstances.
Some inquiries to the Department on this subject have
received a more strict interpretation of statute (regarding
payments only to licensed parties) and although that answer is
not incorrect, such an interpretation may be more restrictive
than the law intends. Thus, under the circumstances outlined
above, a direct payment to the client is possible.
2. When must a broker complete a Broker Supervision
and Control Audit Declaration (“Self-Audit”)?
Commissioner’s Rule R4-28-303(A)(2)(f) requires that to
renew as a designated broker for an employing broker, the
designated broker shall complete and submit to the
Department a Broker Supervision and Control Audit
Declaration no more than 90 days before the broker’s license
expiration date. The key things here are that only designated
brokers must complete the self-audit, that the audit must be
completed at or within 90 days before the renewal date, and
that it is based on the renewal of the BROKER, not the entity
license. If the Audit Declaration is not submitted with or before
the renewal form the license renewal will not be processed.
The Audit Declaration may be completed online as a part of
the renewal process if the broker chooses to exercise that
option.

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FREQUENTLY ASKED QUESTIONS
Continued from page 10
3. What if I answer ”N/A” on the Broker Supervision

and Control Audit?
There are some occasions when an “N/A” answer is
appropriate, but there are many more when it is not.
Certainly if the question does not apply then “N/A” is the
correct answer, but answering “N/A” to a question that does
apply is providing a false answer. The Broker Audit is a
required part of the renewal process, and a false answer on
it is a false answer as part of the license renewal application
and will be treated as such. As an example, all brokers, with
very rare exceptions, must maintain records, so an “N/A”
answer by an active broker to questions concerning record
retention is not appropriate.
Department auditors review every Broker Supervision and
Control Audit form and follow up with the submitting broker
to clarify any answer that does not seem appropriate. In
addition, questionable Broker Audit responses may result in
actual on-site audits conducted by Department auditors.
In short, answer “N/A” if it is truly the correct answer, but do
not answer that way for expediency’s sake or to avoid
disclosing potential problem areas.

5. Is there anything new in the rule governing
“Professional Conduct?”
Yes. In addition to requiring a salesperson or broker to
exercise reasonable care in ensuring that they convey information to the client that is material to the client’s interest, as it
always has, R4-28-1101(I) now has additional language. The
new requirement is that the salesperson or broker “shall take
reasonable steps to assist a client in confirming the accuracy
of information.” So what does that mean? It does not mean
that the salesperson must personally confirm everything, however if there is an indication of termite infestation the licensee
should advise the client that a termite inspection should be
considered. If the client is concerned about the structural integrity of the building the licensee should advise the client of
the appropriate type of specialist to conduct an inspection.
The intent of the rule is not that the licensee arrange for the
inspections or conduct all inspections possible, but that the
licensee not just tell the client “I don’t know, you figure it
out.”
Editor’s Note: Tom Adams is the Director of
Investigations and Auditing for ADRE.

4. Are there any changes to the advertising
requirements in the revised Commissioner’s rules?
Yes, there are several. R4-28-502 governs
advertising, and one of the changes is that when licensees
advertise their own property they must include the words
“owner/agent” in the advertisement.
Another change to this rule provides that the owner of a real
estate school is ultimately responsible for the accuracy of
advertisements for the school.
The requirement covering identification of the employing
broker in advertisements was changed to be “in a clear and
prominent manner.” Webster defines prominent as “thrusts
itself into attention” or “conspicuous in position or
importance.”

VO L U ME 31 , I S SU E 2

Page 11

Arizona Department of Real Estate
2005 RULES DIRECTORY
TITLE 4, CHAPTER 28. REAL ESTATE DEPARTMENT
ARTICLE 1. GENERAL PROVISIONS
Contains definitions, sets development inspection fees,
describes computation of filing deadlines, time frames and
procedures for processing license applications.
ARTICLE 3. LICENSURE
Describes requirements and procedures for applying for
licensure as a salesperson or broker, changes to name,
address, license status, employer; license renewal and
reinstatement, and documentation in instances of unlicensed
activity.
ARTICLE 4. EDUCATION
Provides guidelines and requirements for pre-license and
continuing education instruction, including course content,
administration of the state license examination, and approval
of schools, courses, and instructors, and for certification as a
business brokerage specialist.
ARTICLE 5. ADVERTISING PROVISIONS
Describes permitted, restricted, or prohibited activities
pertaining to advertising and promotional activities by
salespersons, brokers and developers.
ARTICLE 7. COMPENSATION
Disclosure requirement concerning compensation a broker
may receive.
ARTICLE 8. DOCUMENTS
Describes requirements for providing copies of documents
and when certain contract disclosures and notices are
required to be made.
ARTICLE 11. PROFESSIONAL CONDUCT
Identifies specific conduct that is required or prohibited to
guide salespersons and brokers in their dealings with clients
and customers, and brokers' responsibilities to exercise
supervision over licensed and unlicensed employees.
ARTICLE 12. DEVELOPMENTS
PART A. APPLICATION FOR PUBLIC REPORT,
CERTIFICATE OF AUTHORITY, OR SPECIAL ORDER OF
EXEMPTION
Procedures to follow and information required to apply for a
subdivision public report, to sell unsubdivided land, or
exemption, or to operate a cemetery.

V O L U ME 3 1 , I S S U E 2

PART B. GENERAL INFORMATION
Permitted use of an expedited process, conditional sales
and subsequent owner exemptions, changes to a development or cemetery, or the owner or operator of a development or cemetery that require amendment of the license, certification of a development for filing with HUD,
options and blanket encumbrances, partial releases, restrictions on developers’ handling of earnest monies, and
record keeping.
ARTICLE 13. ADMINISTRATIVE PROCEDURES
Describes service on the Department and licensees, investigative information, response to charges, procedures
for an attorney to appear for a respondent licensee, describes procedures for consolidation of similar matters,
and rehearing requests, procedures, and rulings.
The RULES can be viewed in entirety by going to the Department’s web site: www.re.state.az.us or the Secretary
of State’s website: www.azsos.gov and selecting Administrative Code, Title 4, Chapter 28.

Page 12

Arizona Department of Real Estate
2005 Directory of Substantive Policy Statements
No. 2005.01
Short Title:
Acceptable Forms of Payment
Description:
Methods of payment accepted by the Department.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/01/05.
No. 2005.02
Short Title:
Attendance Requirements for Credit &
Enforcement
Description:
Circumstances when a licensee is entitled to credit for a class.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/01/05.
No. 2005.03
Short Title:
Disclosure of Licensee’s Home Address
Description:
Circumstances under which a licensee’s
home address must be disclosed.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/01/05.
No. 2005.04
Short Title:
Unlicensed Assistants
Description:
Clarification of tasks that can be delegated to an unlicensed assistant.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/0105.
No. 2005.05
Short Title:
Access to Arizona Real Estate Law
Book on the World Wide Web
Description: Unrestricted access to the Arizona Real Estate
Law Book on the Department’s Web-Site meets the requirement of statute.
Effective Date: December 6, 1999; Renumbered 5/28/04;
Renumbered 4/01/05.
No. 2005.06
Short Title:
Electronic Record Keeping
Description: Conditions under which brokers may keep required records electronically.
Effective Date: August 15, 2000; Revised & Renumbered
5/28/04; Renumbered 4/01/05.

V O L U ME 3 1 , I S S U E 2

No. 2005.07
Short Title:
Department Investigation of Cases Involving Civil Litigation
Description:
Investigation of complaints and pursuit of civil
remedies.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/01/05.
No. 2005.08
Short Title:
Payment of Commission after License Expiration or Transfer of Employment
Description:
Department’s position concerning payment of
a commission to a licensee after the Licensee has changed employing brokers or the license has expired.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/1/05.
No. 2005.09
Short Title:
Non-commercial Requests to Inspect Records and Fees for Copies
Description:
Availability of Department’s records and the
estimated time for production.
Effective Date: June 18, 1999; Revised & Renumbered
5/28/04; Renumbered 4/1/05.
No. 2005.10
Short Title:
Electronic Signatures
Description:
Acceptance of a broker’s electronic signature
on contracts and agreements.
Effective Date:
November 5, 2004; Renumbered 4/01/05.
No. 2005.11
Short Title:
Subdivision Public Report Application
Form, Changes
Description:
Frequency of changes to the Applications for
Subdivision Public Report and provision for comment by stakeholders.
Effective Date: April 1, 2005.
No. 2005.12
Short Title:
Continuing Education, Residential Resale
Purchase Contract
Description:
Requirement for instructors to attend a trainthe-trainer course by the Arizona Association of Realtors®.
Effective Date: April 1, 2005.

Page 13

Commissioner’s Final Orders
Appealable Agency Actions

Margie Means (Queen Creek)
File No. 05F-DI-166-REL, Order 1/20/2005
Means' salesperson's license was summarily suspended under A.R.S.
§ 32-2157(C) based on her conviction of two counts of Theft, in violation of A.R.S. § 32-2153 (B)(2) and (7). Means did not appeal the suspension.
Thomas Cady (Scottsdale)
File No. 05F-054-REL, Order 1/19/2005
After hearing, Cady's application for real estate salesperson's license
is denied under A.R.S. § 32-2153 (A)(3), (B)(7) and (10) and A.A.C.
R4-28-301 (F) based on disciplinary actions 11/18/1999 and
6/15/2000 by the Department of Building and Fire Safety against the
Class D-8 Dealer license of an entity d/b/a Crossroads Mobile Homes
for which Cady was the qualifying party; payment of Consumer Recovery Fund awards by the Department of Building and Fire Safety
for Crossroads Mobile Homes' failure to complete certain items on
homes it had sold, failure to properly refund a payment, and misrepresentations; disciplinary action by the State Banking Department
8/21/2001 against an entity for which Cady was the managing member for its violation of Banking statutes and rules; disciplinary action
by the Department of Insurance 10/17/2001 revoking Cady's insurance license; and Department of Real Estate Consent Order 5/16/2002
revoking Cady's real estate license.

Jeffrey J. Eger (Mesa)
File No. 05F-LI-029-REL, Order 1/12/2005
After hearing, Eger's application for renewal of his real estate salesperson's license is denied under A.R.S. § 32-2153 (A)(3) (B)(1), (3)
and (7) based on his failure to timely disclose disciplinary actions
taken against him by the Optometry Board; his filing of false and misleading renewal applications in 1994, 1996, 1998 and 2002 wherein
he failed to disclose those same actions against him by the Optometry
Board; and his substantial misrepresentations to the Department.
Venice F. Harris (Phoenix)
File No. 05F-LI-008-REL, Order 12/3/2004
After hearing, Harris's real estate salesperson's license is denied under A.R.S. § 32-2153 (B)(2), (7) and (10) based on her conviction for
Forgery and Theft by Employment, which was in violation of state laws
involving theft and forgery, and demonstrates a lack of honesty, truthfulness and good character.
Inis Paul Hernandez, III (Peoria)
File No. 04F-LI-205-REL, Order 12/3/2004
After hearing, Hernandez's application for real estate salesperson's
license is denied under A.R.S. § 32-2153 (B)(2) and (7) based on his
conviction of a crime of moral turpitude, and failure to demonstrate
honesty, truthfulness and good character.
VO L U ME 31 , I S SU E 2

conviction of theft, a crime of moral turpitude, and failure to demonstrate honesty, truthfulness and good character.
Kevin G. Lee (Mesa)
File No. 05F-LI-024-REL, Order 12/3/2004
After hearing, Lee's application for real estate salesperson's license
is denied under A.R.S. § 32-2153 (B)(2), (7), and (10) based on his
conviction of theft, a crime of moral turpitude, and in violation of
state laws involving theft, and failure to demonstrate honesty, truthfulness and good character.
Jason Robert Litten (Tucson)
File No. 05F-LI-022-REL, Order 12/3/2004
After hearing, the Department denied Litten's application for real
estate salesperson's license under A.R.S. § 32-2153 (B)(7) and (9)
based on his violation of court orders and failure to demonstrate
honesty, truthfulness and good character.
Ray Morrow (Maricopa)
File No. 05F-LI-109-REL, Order 3/24/2005
The Department denied Morrow's application for real estate salesperson's license under A.R.S. § 32-2153 (B)(2) and (7) based on
four alcohol-related misdemeanor convictions. After hearing, Morrow is granted a 2-year provisional license, subject to specified
terms and conditions.
Gretchen L. Novak (Fountain Hills)
File No. 04F-LI-199-REL, Order 11/15/2004
After hearing, the Department denied Novak's application for real
estate salesperson's license under A.R.S. § 32-2153 (B)(7) based
on her failure to demonstrate honesty, truthfulness and good character.
Toni L. Redfern (Phoenix)
File No. 05F-LI-068-REL, Order 2/7/2005
After requesting a hearing, Redfern failed to appear and the Department denied Redfern's application for real estate salesperson's
license under A.R.S. § 32-2153 (B)(3) and (7), and because there
exists an outstanding repayment due and owing to the real estate
recovery fund.
Jena Lynne Russell (Tucson)
File No. 05F-LI-016-REL, Order 2/28/2005
The Department denied Russell's application for real estate salesperson's license under A.R.S. § 32-2153 (B)(2), (7) and (9) based
on felony convictions, violation of court order, and failure to demonstrate honesty, truthfulness and good character. After hearing, Russell is granted a 2-year provisional license, subject to specified
Page 14

Commissioner’s Final Orders
Appealable Agency Actions

Continued from page 14

Azure S. Schaffer (Chandler)
File No. 05F-LI-035-REL, Order 12/3/2004
After requesting a hearing, Schaffer failed to appear and the Department denied Schaffer's application for real estate salesperson's license under A.R.S. § 32-2153 (B)(2), (7), (9) and (10)
Carey G. Stock (Mohave Valley)
File No. 04F-LI-194-REL, Order 12/21/2004
After hearing, the Department denied Stock's application for real estate salesperson's license under A.R.S. § 32-2153 (B)(2), (5), (7), (9)
and (10) based on his convictions for theft, a crime of moral turpitude,
his having been found guilty of conduct which constitutes dishonest
dealings, violation of criminal probation order, violation of state laws
involving theft, and failure to demonstrate honesty, truthfulness and
good character.
William S. Thomas (Gilbert)
File No. 04F-LI-208-REL, Order 12/3/2004
The Department denied Thomas's application for real estate salesperson's license under A.R.S. § 32-2153 (B)(2) and (7) based on felony
convictions and failure to demonstrate honesty, truthfulness and good
character. After hearing, Thomas is granted a 2-year provisional license, subject to specified terms and conditions.
Patricia Irene Wade (Prescott Valley)
File No. 05F-LI-069-REL, Order 1/26/2005
The Department denied Wade's application for real estate salesperson's license under A.R.S. § 32-2153 (B)(2) and (7) based on her conviction for theft and failure to demonstrate honesty, truthfulness and
good character. After hearing, Wade is granted a 2-year provisional
license, subject to specified terms and conditions.

Consent Orders
Appealable Agency Actions

Consent Orders
Appealable Agency Actions

Matthew John Beck (Paradise Valley)
File No. 05F-LI-164-REL, Consent Order 3/14/2005
The Department denied Beck's application for real estate salesperson's license under A.R.S. § 32-2153 based on his violation of Minnesota state laws that involve substantial misrepresentation and his failure to demonstrate honesty, truthfulness and good character. Beck
appealed and is issued a 2 year provisional license, subject to specified terms and conditions.
Kelly Brentas, a/k/a Kelly Givens (Scottsdale)
File No. 05F-LI-0138-REL, Consent Order 2/28/2005
The Department denied Brentas's late-filed application for renewal of
real estate salesperson's license under A.R.S. § 32-2153 based on her
misrepresentation to sellers that she held an active real estate license
when she purchased a home after her license had expired and her receipt of compensation while not licensed to receive it. Brentas appealed and is issued a 2-year provisional license subject to specified
terms and conditions.
Michael J. Byrne (Gilbert)
File No. 05F-LI-207-REL, Consent Order 4/4/2005
The Department denied Byrne's application for real estate salesperson's license under A.R.S. § 32-2153 based on his misdemeanor convictions for DUI and Driving Without a Valid License. Byrne appealed
and is issued a 2-year provisional license subject to specified terms
and conditions.
Arturo Castro (Glendale)
File No. 05F-LI-075-REL, Consent Order 1/12/2005
The Department denied Castro's application for real estate salesperson's license under A.R.S. § 32-2153 based on his misdemeanor convictions for theft and shoplifting. Castro appealed and is issued a 2year provisional license, subject to specified terms and conditions, including that he post a surety bond.
Raymond L. Ferrier a/k/a Raymond L. Jowell (Mesa)

Luis Alonso (Gilbert)
File No. 05F-LI-062-REL, Consent Order 1/31/2005
The Department denied Alonso's application for renewal of real estate
salesperson's license under A.R.S. § 32-2153 based on his conviction
of Aggravated DUI, a felony and a crime of moral turpitude, his failure
to disclose the conviction to the Department within 10 days, and failure
to demonstrate honesty, truthfulness and good character. Alonso appealed and is issued a 2-year provisional license subject to specified
terms and conditions, including that his license is suspended for thirty
days and he is assessed a $2,000 civil penalty.

V O L U ME 3 1 , I S S U E 2

File No. 05F-LI-171, Consent Order 3/16/2005

The Department denied Ferrier's application for real estate salesperson under A.R.S. § 32-2153 based on disciplinary action against his
appraiser's license, 1987 felony convictions and 1989 conviction for
theft, crimes of moral turpitude. Ferrier appealed and is issued a 2-year
provisional license, subject to specified terms and conditions.
Linda Ginest (Kingman)
File No. 05F-DI-147-REL, Consent Order 2/1/2005
The Department denied Ginest's late-filed application for renewal of
her real estate salesperson's license under A.R.S. § 32-2153 based on
her activities in four real estate transactions after the expiration of her
Page 15

Administrative Actions
Continued from page 15
license. Ginest appealed and her application for license renewal is
granted, her license is suspended for 60 days, effective 11/22/2004
and she is assessed a civil penalty of $500.
Eric K. Jacobs (Scottsdale)
File No. 05F-DI-202-REL, Consent Order 3/30/2005
The Department denied Jacob's application for real estate salesperson's license under A.R.S. § 32-2153 based on a 1994 felony conviction. Jacobs appealed and is issued a 2-year provisional license,
subject to specified terms and conditions.
Brandon Ace Loomis (Phoenix)
File No. 05F-LI-074-REL, Consent Order 1/7/2005
The Department denied Loomis's application for real estate salesperson's license under A.R.S. § 32-2153 based on his misdemeanor conviction for Possession of Marijuana and violation of a
criminal order. Loomis appealed and is issued a 2-year provisional
license, subject to specified terms and conditions.
Michael Matthew Morton (Scottsdale)
File No. 05F-LI-076-REL, Consent Order 1/7/2005
The Department denied Morton's application for real estate salesperson's license under A.R.S. § 32-2153 based on his 2002, 2000,
and 1999 alcohol-related misdemeanor convictions and 2001 plea
of guilty to writing a bad check. Morton was also convicted in 2002
of Driving with License Suspended and Failure to Appear, which he
failed to disclose. Morton appealed and is issued a 2-year provisional license, subject to specified terms and conditions.
Ernest Paz (Phoenix)
File No. 05F-LI-162-REL, Consent Order 4/11/2005
The Department denied Paz's application for real estate salesperson's license under A.R.S. § 32-2153 based on his 1998 felony
conviction and 2002 misdemeanor conviction. Paz appealed and is
issued a 2-year provisional license, subject to specified terms and
conditions, including that he post a surety bond.
Bob L. Plemon (Lake Havasu City)
File No. 05F-LI-200-REL, Consent Order 4/4/2005
The Department denied Plemon's timely filed application for renewal of his real estate salesperson's license under A.R.S. § 322153 based on his 2004 misdemeanor convictions for Driving under
the Extreme Influence of Intoxicating Liquor and DUI. Plemon appealed and is issued a 2-year provisional license, subject to specified terms and conditions.

Disciplinary Actions
Robin Aronoff a/k/a Rob Aronoff and Scotia Group
Management (Tucson)
File No. 05F-DI-203-REL, Consent Order 1/25/2005
Aronoff, designated broker, allowed Scotia Group Management to continue to operate as a real estate broker, to employ real estate salespersons, and to manage properties after its license expired in October 2004, in violation of A.R.
S. § 32-2153 (A)(3) and (B)(6). Aronoff's and Scotia's broker's licenses are suspended for 15 days, effective
1/11/2005, and they are assessed a civil penalty of $2,000.
Aronoff will develop and implement procedures to prevent
a recurrence.

Olatunde Ayoola (Gilbert)
File No. 05F-DI-289-REL, Consent Order 4/12/2005
Ayoola continued to be employed by 1st USA Realty, to
operate as a real estate salesperson, and received compensation after his license expired, and failed to timely renew his license in December 2004, in violation of A.R.S. §
32-2122 (B), 32-2153 (A)(10), (A)(22) and (B)(6). His license renewal application is granted and his license suspended for 30 days, effective 3/14/2005, and he is assessed a civil penalty of $1,000.
Janice Cornia, Walter Schirmer and SMDI Company
(Phoenix)
File No. 05F-LI-181-REL, Consent Order 3/7/2005
Cornia continued to work, and SMDI Company, through
Schirmer, its designated broker, continued to employ Cornia as a real estate salesperson, after her license expired in
August 2004, in violation of A.R.S. §§ 32-2153 (A)(3) and
32-2155 (A). Cornia's license is suspended for 45 days,
effective 12/22/2004 and she is assessed a civil penalty of
$750. Schirmer is assessed a civil penalty of $500.
FF Properties, LP, Kimberly Crugnale, and Elizabeth
"Liz" Culibrk (Phoenix, Gilbert)
File No. 05F-DI-156-REL, Consent Orders 3/4/2005 and
3/11/2005
FF Properties continued to operate as a real estate broker,
to employ and pay compensation to real estate salespersons, and to manage properties after its license expired in
January 2004, in violation of A.R.S. §§ 32-2153 (A)(3) and
32-2155 (A). Crugnale was FF Properties' designated broker through April 23, 2004, and failed to exercise reasonable supervision over FF Properties, including to ensure
that FF Properties was currently licensed, in violation of

Page 16

Disciplinary Actions
Continued from page 16

A.R.S. § 32-2153 (A)(3) and (21). FF Properties failed to file an application to renew its license and appoint Culibrk its designated broker
until November 2004, and Culibrk acted as a real estate licensee without an active-status license as required under A.R.S. § 32-2122, in
violation of A.R.S. § 32-2153 (A)(3). FF Properties' application for license renewal is granted, subject to a 15 day suspension effective
12/3/2004, and it is assessed a civil penalty of $3,000. Culibrk's broker's license is suspended for 30 days, retroactive to 12/3/2004 and
she is assessed a civil penalty of $2,000. Crugnale's license is suspended for 15 days and she is assessed a civil penalty of $5,000.
Dreams-Homes & Land and George Bridges (Fountain Hills)
File No. 05F-DI-247-REL, Consent Order 3/11/2005
Bridges, designated broker, allowed Dreams-Homes & Land to continue to operate as a real estate broker, to employ and pay compensation to a real estate salesperson, and executed listing agreements,
purchase contracts and received referral fees after its license expired
in October 2004, in violation of A.R.S. § 32-2153 (A)(3) and (B)(6).
Bridges' and Dreams-Home & Land's real estate broker's licenses are
suspended for 30 days, effective 2/22/05 and they are assessed a civil
penalty of $2,000. Bridges shall develop and implement procedures,
and provide a copy to the Compliance Officer, to prevent a recurrence.

David Higgins, Troy Brown, Randolph Tenney, and R & D Dart
Realty Services, Inc., d/b/a GMAC Real Estate Tenney & Associates (Pinetop/Show Low)
File No. 05F-DI-104-REL, Consent Order 1/6/2005
Higgins continued to work for R & D Dart Realty after his license expired November 2003, in violation of A.R.S. § 32-2153 (A)(3) and (B)
(6). Brown, designated broker for R & D Dart Realty from 8/18/2003
until 4/1/2004, and Tenney, R & D Dart Realty's designated broker
since 4/1/2004, allowed R & D Dart Realty to continue to employ and
pay compensation to Higgins, in violation of A.R.S. §§ 32-2153 (A)(3)
and 32-2155(A). Higgins' real estate salesperson's license is suspended for 16 weeks, effective 10/25/2004, and he is assessed a civil
penalty of $1,000. Brown, Tenney and R & D Dart Realty are each assessed civil penalties of $500.

Lobo Jody, LLC (Scottsdale)
File No. 05F-SD-142, Consent Order 2/4/2005
Lobo Jody, through a real estate broker, acquired six or more lots in
Pine Oaks, a previously approved subdivision of unimproved lots.
Lobo Jody listed some of the lots it had acquired, now improved lots
because a dwelling had been constructed or was under contract to be
constructed, for sale with the same broker and sold some of these improved lots without first notifying the Commissioner, obtaining a public
report, and notifying purchasers by written contract disclosure that a
Jeffrey Hanrath and Equity Development, LLC (Chandler)
public report was required, and taking a receipt for public report from
File No. 05F-DI-132-REL, Consent Order 2/1/2005
purchasers, in violation of A.R.S. § 32-2181 (A), 32-2183 (A) and (F)
Hanrath, designated broker, allowed Equity Development to continue and A.A.C. R4-28-803 (A) and R4-28-805. Lobo Jody shall cease &
to operate as a real estate broker, to pay and or receive compensation desist until it complies with all applicable laws, may complete two
in violation of the statutes and rules, to employ real estate salesperpending sales, shall offer rescission to all purchasers, shall obtain a
sons, and executed purchase contracts after its license expired in
subdivision public report and amend it, as necessary, and is assessed
February 2004, and failed to timely file an application for license rea civil penalty of $1,000.
newal, in violation of A.R.S. § 32-2153 (A)(3), (6), (10), (14), and (B)
(6). Hanrath and Equity's real estate broker's licenses are suspended Martha Alicia Montero (Phoenix)
for 10 weeks, effective 11/3/2004, and they are assessed a civil pen- File No. 05F-DI-028, Consent Order 1/31/2005
alty of $4,000.
Montero's real estate salesperson's license is revoked under A.R.S. §
32-2153 (B)(2), (5), (7) and (10) based on her felony conviction for
Nichole Mehalic, Camille Herbst, Robert Herd, Stephen Torkelsen Conspiracy to Commit Money Laundering; having been found guilty of
and Debbie Valdes (Tucson/Oro Valley)
conduct which constitutes fraud or dishonest dealings; failure to demFile No. 05F-DI-051-REL, Consent Orders 1/31/2005, 2/1/2005, and
onstrate honesty, truthfulness and good character; and violation of a
2/4/2005
state law or rule that relates to real estate and that involves fraud, subIn the spring of 2003, Mehalic hired Herd as a project manager and
stantial misrepresentation, dishonest dealings.
consultant, and Valdes, Torkelsen, and Herbst as licensed assistants,
and paid them compensation for real estate activities to them directly, Robert Morales (Flagstaff)
without going through their employing broker, Roy Long Realty, in vio- File No. 05F-DI-204, Consent Order 3/28/2005
lation of A.R.S. § 32-2153 (A)(3) and (10). Herd, Valdes, Torkelsen,
Morales signed the name of his business partner, who was also a real
and Herbst accepted employment and compensation from other than estate broker, to two purchase contracts in which Morales was princitheir employing broker, in violation of A.R.S. §§ 32-2153 (A)(7), (10)
pal without written authorization to do so, and received compensation,
and 32-2155 (A). Respondents are each assessed a civil penalty of
in the form of a reduction in the purchase price, for one of the proper$1,000.
ties, in violation of A.R.S. § 32-2153 (A)(10) and (25). Morales is assessed a civil penalty of $2,500.
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Disciplinary Actions
Continued from page 17
Pulte Home Corporation (Phoenix)
File No. 02A-SD-075, Consent Order 3/3/2005
Pulte procured a public report by filing applications in violation of
A.R.S. § 32-2183 (C)(7) (by providing inaccurate information
about the availability and cost of fire protection service and property taxes) and failing to include complete property tax disclosures, in violation of A.R.S. § 32-2183.03 (C)(2). Pulte is assessed a civil penalty of $5,000.
Jeffery Slaughter and Bud Crawley d/b/a Bud Crawley Real
Estate (Phoenix)
File No. 05F-LI-186-REL, Consent Order 1/28/2005
Slaughter continued to work for Crawley as a real estate salesperson after Slaughter's license expired in January 2004, in violation
of A.R.S. § 32-2153 (A)(3) and (B)(6), and Crawley continued to
employ Slaughter as a real estate salesperson in violation of A.R.
S. §§ 32-2153 (A)(3) and 32-2155 (A). Slaughter's application for
license renewal is granted and his license suspended for 15
weeks, effective 12/6/2004, and he is assessed a civil penalty of
$1,750. Crawley is assessed a civil penalty of $1,000 and shall
develop and implement procedures to prevent a recurrence.

Tara Van Hoose f/k/a Tara Keller, Quanta d/b/a Keller Williams
Southwest Realty, and James Dunning (Scottsdale)
File No. 05F-LI-184-REL, Consent Order 2/25/2005
Van Hoose continued to work as a real estate salesperson after her
license expired in September 2004 in violation of A.R.S. § 32-2153 (A)
(3) and (B)(6), and Keller Williams Southwest Realty employed and
paid compensation to Van Hoose as a real estate salesperson after
her license expired, in violation of A.R.S. §§ 32-2153 (A)(3) and 322155(A). James Dunning, Keller Williams Southwest's designated broker, failed to supervise its employees and to ensure that salespersons
in its employ were currently licensed, in violation of A.R.S. § 32-2153
(A)(3) and (21). Van Hoose's license is suspended for 15 days and
she is assessed a civil penalty of $1,000. Dunning and Keller Williams
Southwest are jointly assessed a civil penalty of $1,000.

ARIZONA DEPARTMENT OF REAL ESTATE

James Souza (Queen Creek)
Souza, as principal, made misrepresentations to a prospective
tenant/buyer about his ability to lease a residential property because he had already agreed to sell the property to another
buyer, in violation of A.R.S. § 32-2153 (A)(1) and (B)(3). Souza
disregarded or violated provisions of Title 32, Chapter 20, A.R.S.,
and the Commissioner's Rules, in violation of A.R.S. § 32-2153
(A)(3), and demonstrated negligence in violation of A.R.S. § 322153 (A)(22). Souza failed to deal fairly with the two purchasers,
and failed to disclose to the second purchaser that he was unable
to perform under the terms of the second contract due to the prior
contract he had executed to sell the property to the first purchaser, in violation of A.A.C. R4-28-1101 (A) and (B). Souza's
real estate salesperson's license is revoked.
Terri Tchernoivanov (Gilbert)
File No. 04F-126-REL, Consent Order 1/31/2005
Tchernoivanov failed to disclose an adverse real estate judgment
to the Department within 10 days, required under A.A.C. R4-28301 (F) and in violation of A.R.S. § 32-2153 (A)(3). This consent
order supersedes in entirety Commissioner's Final Order dated
10/14/2004 in this matter, Tchernoivanov is assessed a $1,000
civil penalty, shall dismiss her appeal, and each party shall bear
their own costs.

V O L U ME 3 1 , I S S U E 2

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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
Mary C. Utley
Editor
Real Estate Advisory Board
R.L. Brown, Chair
Gary Brasher, Vice-Chair
Vicki L. Cox-Golder
Frank Dickens
Colleen Newman
Vince Pellerito
Lisa A. Suarez
Felipe Andres Zubia
Ann White

© 2005 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.

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