DID YOU KNOW...

The Department has seen an increase in a practice by real estate brokers that has led us to review the statutes. The practice in question is a broker who submits a "letter of authorization" to
the Department, seeking to designate other licensees (employed by the same employing broker), who the designated broker wants to authorize to sign severs, hires, and renewal applications for any licensee employed under that employing broker's license. While the Department
acknowledges that today's business demands quick answers, it cannot legally honor these letters of authorization.

B u l l e t i n

October 2005
Volume 31, Issue 4

The designated broker is the only person authorized by statute to act on behalf of a licensed
entity or sole proprietorship. The statute (A.R.S. § 32-2125 (A)) specifically authorizes only the
designated broker to act on behalf of an employing broker, and does not authorize others to be
delegated that authority. Two exceptions to this restriction include when the designated broker is
'unable to act within 24 hours' and the designated broker appoints another licensee (singular) to
act in his behalf (during his absence) and the appointment of a branch manager. A.R.S. § 322127 (D) In the case where a designated broker appoints another licensee as the broker's
'designee', the designee must attach a copy of the broker's designation letter to any documents
(such as hire or sever forms, and renewal applications) that the designee signs and files with
the Department. Another exception is the appointed manager of a branch office dealing with
business and licensees licensed to that branch office, subject to the limits on authority that can
be granted to a salesperson that is a branch manager (A.R.S. §32-2127 and A.A.C. R4-28-304).
A branch manager cannot be authorized to act as manager of more than one branch office,
unless appointed as the designee on a temporary basis when the designated broker is unavailable.
The designated broker can lawfully and ethically delegate many business tasks associated with
of running a successful brokerage firm. This delegation does not extend to tasks required by law
to be performed by the designated broker. The Department will accept a designated broker's
signature when that signature has been applied by use of a signature stamp or electronically. As
with a password to prevent unauthorized computer log-in and use of an electronic signature,
appropriate precautions must be taken to safeguard signature stamps.

Did You Know That...

1

Kudos for ADRE

2

Commissioner’s Corner

3

Predatory Practices

Inside this issue:

Arizona Department of Real Estate

T h e

Did you know that …

4-5

Attn: All Designated Brokers

5

Required Criminal Background Checks

5

Real Estate Advisory Board Elects New Officers

6

How to be involved in successful Mex. Real Estate

7

Importance & Availability of Subdivision Public Reports

8-9

Real Estate Ad Hoc Committee

9

Cease & Desist Orders

10

Frequently Asked Questions

11

Update Online License Renewal System

12

Administrative Actions

13

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

Cindy Wilkinson
The Department has a suggestion box where employees
may submit ideas or creative solutions, that are beneficial to
the Department.
Cindy suggested sending Pink Post Cards as renewal reminders instead of the four part renewal form that can be
obtained online or downloaded. This saved the Department
money in postage, printing, paper and staff time, too!.

Education Advisory Committee
By
Cindy Wilkinson
The E.A.C. has been working hard over the summer. Our
initial goal is to update and standardize prelicense education curricula for salespersons, brokers, and the two Arizona specific courses (broker and salesperson), including
identification of course objectives. We are also discussing
ways to improve the quality of real estate education. The
Committee has a long list of education-related issues to
discuss and on which it may make recommendations.
Openings occur on the Committee from time to time, so if
you are interested in learning more about it, let me know.
If you would like to be considered for appointment to the
Committee and are willing to put in the time and effort that
is involved, send me your CV (curriculum vitae).
Editor’s Note: Cindy Wilkinson is the Director for the
Licensing and Professional Education Division for ADRE.

VOLUME 31, ISSUE 4

Bob Cates
Bob is a Customer Service Representative in the Licensing
Division for ADRE. He is on the “front line” and has daily
contact with licensees. He noticed that licensees were being distracted from the business at hand by having to answer their cell phones.
His suggestion was to have licensees turn-off their cell
phones while conducting business in the Licensing area.

The Good and the Not-So-Good!
As the Editor of the Bulletin, I frequently hear comments on the Department and its employees. Generally speaking those comments are usually positive,
some are not. The following is a sampling of those
comments:
• “Yeah Team, you guys are doing a great job.
Thanks so much!” J.M. Ivey
• “Your phone system is horrible! “ (No name given)
• “Nice website. “ (Kathy Howe)
• “P.S. When I called on Tuesday morning to let
Carla know I wouldn’t be attending the meeting, I
was greeted by the comforting voice of Commissioner herself. You work for quite a woman. I give
a great deal of credit to a Commissioner who is
willing to answer a cold call on a main linebravo!”
(John Gerard)
• “Congratulations to the Department of Real Estate. SPS No. 2005.14 is insightful, progressive
and I like it.” Darrell Blomberg
Page 2

By Commissioner Elaine Richardson

In each publication of ADRE’s (the Department) Bulletin when
I am asked to write an article, I attempt to bring you “inside”
the Department of Real Estate. I know when I was actively
selling real estate, the Department was, in my thinking at the
time, a bastion of bureaucratic paperwork that I only had to
deal with every two years for renewal. Little did I know, or
care for that matter, what it took to oversee all of us licensees,
and had no interest in the regulation of subdivisions or cared
about Public Reports.
How things change. Hence, my desire to reach out to as
many folks as I can and find out what your needs are in
relation to the Department as well as give you insight as to the
what and why of managing this agency. Hopefully you will
come away with a better attitude then some of us may have
had previously.
The Department has five Divisions: Administrative Actions,
Business Services, Investigations, Licensing/
Professional Education and Developments (previously
Subdivisions). Each Division is assigned tremendous tasks
and responsibilities. It is my responsibility to ensure that all
the Divisions are in sync. The Department also has a Public
Information Officer (PIO), Mary Utley, with whom most of you
are acquainted via the Late Breaking News and bi-monthly
Department Bulletins. She also manages all contact with the
media and is one of the official spokespersons for the
Department.

of the Real Estate Ad Hoc Committee of the Arizona-Mexico
Commission. Arizonans seem to love the sun and the ocean
and even though we have an abundance of sun and sand, we
are in short supply of oceans. Therefore, many, many
Arizonans head south. It is the Department’s responsibility to
make sure that consumers have the same protections from the
Department no matter if the transaction takes place in Arizona
or another state or country. It is important that licensees
remember that the Department regulates the licensee no
matter where the transaction happens.
So whether I’m making a presentation, gathering facts or
calling together a group of stakeholders, my goals remain the
same. They are:
· Protection for the public
· Promoting the Department as a consumer-friendly
agency
· Being receptive to industry’s needs, issues and
concerns
· Being fair, equitable and just
When these goals are achieved, then it’s a win-win situation
for everyone and hopefully you won’t have the errant attitude
that I once had! This article is my attempt at letting you know
that I appreciate every opportunity you have given me to listen
to the needs of industry.

In order to keep the Department in sync with the Real Estate
Industry, it is important to interact with as many of the industry
stakeholder groups as possible. That is one of my top
priorities. Whether I am invited to travel to Sierra Vista, or
Payson to speak to Realtors®, or to make presentations to
homebuilders groups, I make an effort to be as forthright as
possible and actively listen to the ever- changing needs of our
industry.
At present there is a burgeoning market in Mexico, specifically
in the state of Sonora. I am privileged to be Co-Chair of the
VOLUME 31, ISSUE 4

Commissioner Richardson speaking before a group
of Licensees in Southeast Arizona.
Page 3

PREDATORY PRACTICES
BY
Henry Soza

The Arizona Department of Real Estate has seen a sharp
increase in the number of complaints involving “Predatory
Practices” over the last 2 to 3 years. These types of
complaints involve allegations of fraud and theft perpetrated
on individuals who are unsophisticated in the buying and
selling of real estate, or they involve distressed situations
(pending foreclosures).
A large number of individuals who are victimized by
Predatory Practices do not speak, read or write English.
Many rely on the information given to them by the agent,
which in some cases is neither true nor accurate. Even
those who are capable of understanding English often do
not understand the language of the agreements or contracts
they are signing.
The Department has labeled the people who prey upon
these individuals as “Predatory Agents.” This is not to be
confused with Predatory Lenders. With Predatory Lending,
the victim is charged extra fees, high interest rates and high
origination cost. Predatory Agents target those persons who
can be taken advantage of during a transaction in such a
manner that the transaction benefits only the agent, not the
client.
Some complaints include the agent creating false wage or
other documents needed to secure a mortgage loan. This
includes providing false Social Security Numbers, W-2’s,
paycheck stubs, identification, and other documents
necessary to insure the approval of the mortgage loan. In
many instances the agent works with a loan officer and or
escrow agent who helps the process along. In other
instances the agent works alone.
In some cases the agent charges a service fee for creating
the false documents. These fees range from $250 to $7,000.
The fees are always paid in cash and are never noted on the
HUD-1 Settlement Statement or any other documents.
Written receipts are seldom, if ever, provided. Many of the
victims gladly pay the fee, since this is their only means of
securing a loan. Other fees include a charge to show
houses, a charge to complete paperwork and various other

VOLUME 31, ISSUE 4

charges, limited only by the imagination of the
perpetrator.
In a few cases, the identities of minor children are used
to fraudulently obtain loans. Sometimes the parents of
the children are willing participants; while in other cases
the parents are unaware that their children’s personal
information is used. Nonetheless, the loans are
processed and funded. The agents usually benefit from
these transactions in two ways; first, they receive upfront cash for the fees and second, they receive a
commission from the fraudulent sale.
Another Predatory Practice is the Stop Foreclosure
scam. This practice involves individuals whose property
is in foreclosure and who are seeking a way to keep or
sell their home rather than lose it. Agents and/or
unlicensed investors solicit owners of distressed property
and make claims of stopping foreclosure. The owners
place their trust in these solicitors and ultimately end up
not only losing their home but also losing any equity that
may have been due them.
The Department does not work alone in its efforts to
investigate these types of complaints. The Investigators
tasked with investigating Predatory Practices work
closely with Law Enforcement and other agencies,
including the Consumer Protection Division of the
Attorney General’s Office, the Arizona Department of
Banking, the Arizona Department of Public Safety, the
U.S. Department of Housing and Urban Development,
the Social Security Administration, the Office of the
Inspector General, the U.S. Postal Inspector, the U.S.
Immigration and Customs Enforcement Administration
and various other local State and local police agencies.
Within the past three years the Investigations Division,
along with the help of the agencies mentioned above,
has been responsible for at least 4 criminal indictments.
These four cases have resulted in 1 conviction with a
sentence to the Department of Corrections and an order
to pay $1.4 million in restitution, 1 perpetrator fleeing the

Page 4

PREDATORY PRACTICES
Continued from page 4

the country to avoid an active arrest warrant, 1 pleading guilty
to federal charges and 1 pending prosecution.
The Department is aggressively pursuing Predatory Agents
criminally as well as administratively. The Department takes a
very serious stand on Predatory Practices, and those
convicted often no longer just lose their licenses but their
freedom as well.
The Investigative Division offers a Predatory Practice
presentation to all brokerages. The presentation covers in
detail the issues surrounding Predatory Practices/Predatory
Agents. Anyone interested in such a presentation may
contact Tom Adams, Director of Investigation/Auditing at 602468-1414 Ext. 500.
Editor’s Note: Henry Soza is a Senior
Investigator with ADRE/ Investigations Division.
He has been with the Department for 4 years.

Attention All Designated Brokers
By
Cindy Wilkinson
When an employee severs employment with your company
on-line (or, in the next release of the On-Line program, when
you sever a licensed employee on-line), do not return the
license of the severed person to the Department.

Required Criminal Background Checks
By
Cindy Wilkinson

The Department checks for a criminal record on each original
applicant, and on current licensees who disclose a criminal
conviction. When we are advised of a criminal conviction, we
review the person's application to see whether it was correctly completed and any conviction properly disclosed. If not,
we follow up with the licensee and may ultimately prosecute
the case as a "false or misleading application." In these
cases we seek suspension or revocation of the person's license and usually assess a civil penalty. If you are completing an original or renewal application, in paper format or online, be sure you carefully read and honestly answer the
questions.
If you are unsure whether a conviction in your background
requires disclosure you can ask the Licensing Division personnel, but the best source of information to determine
whether the question requires disclosure is to look at the
documents pertaining to your conviction. In almost all cases,
the paperwork will indicate the offense, date, and whether it
was a misdemeanor, a felony, or an undesignated offense.
For professional/occupation licensing purposes in Arizona, an
undesignated offense is considered to be a felony unless or
until it is designated a misdemeanor by the court. Although it
may take longer for the Department to review your application
if you properly disclose a criminal conviction, if you fail to
properly disclose it, chances are good that you will lose your
licenses. In any case you will probably have significant disciplinary sanctions imposed once we discover that you were
not truthful. After all, three of the most basic requirements for
getting and holding a license are honesty, truthfulness and
good character.
Editor’s Note: Cindy Wilkinson is the Director for
the Licensing and Professional Education Divsion
for ADRE.

Remove the person's license from your notebook of licenses
and keep it and the email notification from the Department
with your employment records for the requisite five-year period
following termination of employment. A.R.S. § 32-2151.01 (A).

VOLUME 31, ISSUE 4

Page 5

Arizona Real Estate Advisory Board
Elects New Officers

At the quarterly meeting of the Arizona Real Estate Advisory Board scheduled October 20, 2005, elections were held for
the Chair and Vice-Chair positions. Elected unanimously were Gary Brasher for Chair and Lisa Suarez for Vice-Chair.
Gary Brasher was appointed to the Board by Governor Janet Napolitano in 2003 to fill the Subdivider/Developer position
and his term expires in January 2009. He is the President of Brasher Real Estate, Inc., based in Santa Cruz County. His
experience in the Real Estate Industry dates back to 1981. He is responsible for developing the master-planned community of Barrio de Tubac and also serves as the Co-Chair of the Real Estate Ad Hoc Committee of the Arizona-Mexico Commission.
Lisa Suarez, a resident of Tucson was appointed by Governor Janet Napolitano in 2002 to fill the residential Licensee slot
and her term expires January 2009. She is a Certified Residential Specialist and is the owner/Broker of EMS Realty, one
of Southern Arizona’s leading property management companies. She has been in the real estate industry since 1986.
Commissioner Elaine Richardson expressed appreciation to the newly elected officers and their willingness to dedicate
time to the Board. Outgoing Chair R.L. Brown thanked the members of the Board for their commitment in working with him
during his tenure. Past Chair Brown will continue to serve on the Board until his term expires (January 31, 2007).
Commissioner Elaine Richardson also thanked R.L. Brown for all of his hard work and dedication to the Board.

VOLUME 31, ISSUE 4

Page 6

How To Be Involved in Successful Mexican Real Estate Transactions
By Alice Martin, RCE, CAE, Executive Vice President, Arizona Association of REALTORS®

At the Arizona Association of REALTORS® Arizona-Sonora
Real Estate Conference last month, several questions arose
about how Arizona licensees can be involved in real estate
transactions taking place in Mexico or involving cross-border
referrals. Three major questions are addressed below.
Q. Can I make referrals to Mexican real estate practitioners and receive a referral fee?
A. Yes. If you refer an Arizona buyer to an individual
legally doing business in Mexico (one who has the
right permits, etc.), that individual can pay a referral
fee to a licensed Arizona broker for the referral. Tip:
Make sure that you have a written referral agreement that states exactly your terms of agreement.
Q. Can I enter into an out-of-state broker agreement
with a Mexican real estate practitioner in order for
each of us to market the other’s listings?
A. Yes. Such an agreement could allow you to place
listings of Mexican property in your MLS and market
them to Arizonans, and your Arizona listings could
be promoted to Mexican residents by the Mexican
real estate practitioner. The key point is that both
would be appropriately licensed or otherwise permitted to do business within their own jurisdictions.
Q. How about Mexican subdivisions? Can they be promoted in Arizona? Can I send buyers to new subdivisions in Mexico?
A. Subdivisions located in Mexico cannot be directly
promoted by their developers or agents to Arizonans unless the properties have Arizona Subdivision Reports. If you receive information in Arizona
about new subdivisions that are not authorized to
advertise in Arizona, be cautious about referring
buyers. Tip: Refer your buyer prospects to Mexican
real estate practitioners to help them locate the right
properties within their jurisdictions, which could include new subdivisions. (Note: the subdivision approval process for Mexican developments is being
improved and streamlined, so many more Arizona
reports for property in Sonora, may be approved in
the near future.)

.and effectively. In our border state of Sonora, there is no
‘licensing’ as we know it, but there are certification
programs for real estate practitioners, and a voluntary
registry of those practitioners who have met certain
criteria. Arizona licensees may want to refer to those
individuals listed on the Registry, especially as it grows in
numbers and awareness by both the real estate world and
Sonoran consumers. Be watching for a link to the
Sonoran Registry on ADRE’s website soon.
Editor’s Note: Alice Martin has been involved in
Arizona/Sonora real estate issues for several years,
initially serving on a cross-border group who drafted
Statutes for Sonora real estate licensing in the mid-1990’s
until now, where she serves on the Arizona-Mexico
Commission Real Estate Ad Hoc Committee.

Guest Column articles DO NOT necessarily reflect the opinions, policies or interpret actions
of Law by ADRE. ADRE assumes no responsibility for the content in such guest articles.

In summary, the smart way for Arizona licensees to find

properties in Mexico for their buyers is not to try to do it
themselves unless they have the necessary expertise, but to
VOLUME 31, ISSUE 4

Page 7

The Importance & Availability of Subdivision Public Reports
By Roy Tanney and K. Michelle Lind
The Arizona Department of Real Estate (“ADRE”) and the
Arizona Association of REALTORS® (“AAR”) often receive
questions about subdivisions. Some of the most frequently
asked questions have been: “What is a Public Report?”
“When is it required?” and “What does the report contain?”
Additionally, the recent publicity regarding fissures in the
east valley of Maricopa County and elsewhere in the State
have raised questions about whether such disclosures are
made in a Public Report. In a spirit of cooperation, ADRE
and AAR are working together to ensure that both the general public and real estate professionals are informed about
these issues so that they can protect their interests.
Arizona law regulates the sale or lease of subdivided land,
which is defined as land divided or proposed to be divided
for sale or lease into six or more lots or parcels smaller than
thirty-six acres. A.R.S. §32-2181 et seq. A subdivider may
not sell or lease or offer for sale or lease any lots, parcels or
fractional interests in a subdivision without first obtaining a
Public Report from the ADRE. A.R.S. §32-2183(F). A
"subdivider" is anyone who offers for sale or lease six or
more lots, parcels or fractional interests in a subdivision or
who causes land to be subdivided into a subdivision for the
subdivider or for others, or who undertakes to develop a
subdivision. A.R.S. §32-2101(54).
A subdivider must give a prospective new home buyer a
copy of the Public Report and an opportunity to read and
review it before the prospective buyer signs a contract to
purchase a home in the subdivision. A buyer should carefully review the Public Report because the Report contains
important information, such as:
• The identity of the subdivider/developer
• The physical characteristics of the subdivision e.g.,
level, hilly, rocky, loose soil, washes, arroyos, canyons
• Disclosure of conditions or provisions that may limit the
use or occupancy of the home
• Homeowner’s association information
• Whether the subdivision is subject to any known flooding or drainage problems
• Existing and proposed adjacent land use, including any
unusual safety factors and uses that may cause a nuisance or adversely affect home owners within or near
the subdivision (the ADRE recommends that the subdivider research within two miles of the subdivision for
VOLUME 31, ISSUE 4

unusual safety factors and five miles for factors that may
cause a nuisance or adversely affect lot owners)
• Gas pipelines within the boundaries of the subdivision
or within 500 feet of the subdivision boundary
• Environmental factors, including whether the
subdivision is within a federal superfund or state
WQARF site
• Whether any portion of the subdivision is located in
territory in the vicinity of a military or public airport
• The availability of utilities
• Street and road maintenance
• Flood protection or drainage facilities
• Documents demonstrating acceptable arrangements
have been made for completion of all facilities
• Locations and availability of schools, shopping
facilities, public transportation, medical facilities,
ambulance service, and police service.
It is now easier for a buyer to obtain a copy of the
subdivision Public Report. Effective September 1, 2005,
the public has access to the ADRE’s Subdivision
Database on its website, www.re.state.az.us. Navigate to
the Subdivision Section of the Public Database and enter
appropriate search criteria. If a subdivision record exists,
certain information will be provided including whether a
Public Report is available for download. If a Public Report
is not available, follow the instructions given and ADRE
staff will check the records to see if the Public Report can
be made available. Any public Report issued prior to
January 1, 1997, is likely to be unavailable unless it was
amended at a later date. Always remember that given the
age of some of the Public Reports, some of the disclosure
information may be outdated and no longer accurate. If
the Public Report is less than 20 years old, a hard copy of
the report may still be available by contacting the ADRE.
Subsequent buyers may also benefit from reviewing the Public
Report. Therefore, at the Commissioner’s request, a notice to
buyers about the availability of a Public Report will be added to
AAR’s Residential Seller’s Property Disclosure Statement
(“SPDS”) at the next printing. The Buyer Advisory has also
been updated to include a link to the ADRE website where the
copies of Public Reports may be obtained. However, re-sale
buyers must understand that even though the information in
the Public Report may have been accurate when the
Page 8

The Importance & Availability of Subdivision Public Reports

Continued from page 8

prior to when the home was built), the information could be
outdated or inaccurate and should be verified.
The purpose of the Public Report is to protect the public
by disclosing material information about a subdivision and
the adjacent property to a prospective home buyer. Now
that access to Public Reports issued after January 1, 1997
is immediately available, prospective home buyers of both
new and resale properties are encouraged to take
advantage of this information source when conducting
their due diligence inspections and investigations.

Paul Waterman
Tri-Vista Partners

Editor’s Note: Roy is Subdivision Division Director for the
ADRE and K. Michelle Lind is General Counsel to the
AAR and a State Bar of Arizona board certified real
estate specialist.

Tim Kelley
IIMI Group, Inc.

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
authors, is not intended as definitive legal advice and you should not
act upon it without seeking independent legal counsel.

Manuel Ruiz
Santa Cruz County
Board of Supervisors

The Arizona-Mexico Commission/ Real
Estate Ad Hoc Committee has three
new members. They are Paul Waterman (Tri-Vista Partners), Manuel Ruiz
(Santa Cruz County Board of Supervisors) and Tim Kelley (IMI Group). All
three of the individuals bring a vast
amount of experience in dealing with
Mexico and Latin America. Each has
his own special area of expertise that
will be invaluable to the committee.

VOLUME 31, ISSUE 4

Page 9

Cease & Desist Orders
By Tony Leonard
Recently there was an article in the September 2005 edition of
the Arizona Journal of Real Estate & Business, which questioned the issuance of cease and desist orders by the Commissioner of the Department of Real Estate. The Commissioner takes the issuance of a cease and desist order very seriously. The process that leads up to any consideration of issuing a cease and desist order is a very thorough review of all
of the facts and law that would apply, and to the ramifications
from such an order, not just to the parties involved, but to the
Commissioner’s overall responsibilities to the protect the public. Only after such a review process, would the Commissioner consider issuing a cease and desist order.
What is a “cease and desist order” and when should it be
used? “Cease and desist” means “stop what you are doing
and don’t do it again.” The cease and desist order is one of the
many enforcement tools available to administrative agencies
such as the Department of Real Estate.
A cease-and-desist order is an order from a judge or government ordering a halt to an illegal activity. This prohibition is
sometimes done as the outcome of a trial, in which case it is a
permanent injunction against the activity, and sometimes done
as an emergency measure to prevent possibly irreparable
harm, in which case it takes the form of a temporary injunction.
A cease and desist order can be issued by the Commissioner
to correct a problem that needs immediate action. If it appears
to the Commissioner that a person has engaged, is or is planning to engage in an act, practice or transaction that violates a
statute, rule or order issued by the Commissioner, she may
issue an order directing that person to cease and desist from
that action. Through use of the cease and desist order, the
Commissioner can order restitution where appropriate and can
order other timely affirmative action to correct conditions
caused by the original act, practice or transaction. A.R.S. § 322154 (A).
Cease and desist orders have been issued for many reasons,
but not very often. Since 1994, which is as far back as the
computerized records go, the Commissioner has issued approximately thirty-five (35) cease and desist orders. The reasons for the issuance of the orders cover a wide range of violations. Unlicensed sales, illegal subdivisions and unreported
convictions by licensees were responsible for the most cease
VOLUME 31, ISSUE 4

and desist orders issued over that time span. Some of the
other violations where cease and desist orders were issued
were non-compliance with an order, adverse judgments, trust
account irregularities, breach of a fiduciary duty, misrepresentation, fraud, time share sale improprieties and cemetery sales
violations. Each of the violations was a serious offense and a
direct threat to the public’s health, safety and welfare.
The decision by the Commissioner to use the cease and desist order to stop, or correct a violation she believes is a threat
to the public’s health, safety and welfare, is made after the
Commissioner answers these questions, among others:
• Is immediate correction necessary to protect public health,
safety, or the environment?
• It is reasonably possible to correct violation immediately?
How the Commissioner answers these questions, determines
whether she will issue a cease and desist order.
Once the Department became aware of a violation, an investigation is conducted. After the investigation, the Departments
response will depend upon the violation. The Department has
other means to respond to violations of the statutes, rules or
order issued by the Commissioner, and these would be considered first. Before a cease and desist order would be issued
by the Commissioner, the Department may have taken other
actions to respond to the violation. This tool is rarely selected
first from among the devices the Commissioner has at her disposal to correct activity that does not conform to statute, rule
or order.
A cease-and desist order is very serious. The order includes
the notice for the opportunity of a hearing, and requires the
offending party to suspend any unlawful, unsafe, or unsound
practices. A cease and desist order is enforceable in a court
of law. The appropriate statute must be declared in the text
of the order, and the order must be delivered by personal service or certified mail, return receipt requested.
Many government administrative agencies have the ability to
issue cease and desist orders. Frequently, these orders will
contain a period of time for the subject of the order to request
a hearing. If a hearing is not requested, the cease and desist
order will become final and the agency is able to enforce its
order in a court of law.
Page 10

Cease & Desist Orders
Continued page 10

FREQUENTLY ASKED QUESTIONS
By Tom Adams

its order in a court of law.

Q. If clients/sellers state in writing, that they want all
offers presented together at a specific time, can the sales
agent/broker hold offers until that time and not be in
violation of R4-28-802(B)?

The process that the Commissioner follows prior to taking
the step of issuing such an order, is a review of the violations of the parties, a review of the law by the department,
meetings with her staff to consider alternative actions and
meetings with her attorneys to consider ramifications of her
issuing such an order. Only after this review process,
would the Commissioner consider issuing a cease and desist order.
Editor’s Note: Tony Leonard is the Acting Deputy
Director for the Administrative Actions Division for
ADRE.

A. R4-28-802(B) states in part: “During the term of a
listing agreement, a salesperson or broker shall
promptly submit to the salesperson's or broker's client
all offers to purchase or lease the listed property. . . .
The salesperson or broker shall submit to the client all
offers made prior to closing and is not released from this
duty by the client's acceptance of an offer unless the client instructs the salesperson or broker in writing to
cease submitting offers or unless otherwise provided in
the listing agreement, lease, or purchase contract.”
If the client/seller states IN WRITING, or as an addendum to the listing agreement, a provision that the offers
shall all be presented at a specific time, the agent/broker
may do so. The rule allows variance from the “shall
promptly submit” requirement by including reference to
the seller's direction or with the seller's permission in
writing in the listing agreement. If the direction/
permission meets the "in writing/in the listing agreement" requirement, holding offers is allowed. One caveat is that obtaining the written direction to hold the
offers needs to be done BEFORE the first offer is received. Any offers received before the written direction
to hold offers until a specified time are not subject to
that restriction and should be presented immediately.
Editor’s Note: Tom Adams is the
Director of the Investigations
Division for the ADRE.

VOLUME 31, ISSUE 4

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Online License Renewal System
UPDATE

ADRE and AAR strongly encourage licensees to utilize Dare's on-line license renewal system to make changes to
their personal addresses. Remember that R4-28-303 D requires licensees to provide notice of a change of residence
address or residential mailing address within 10 days of the change.
You may change your address on line at your convenience for NO charge; however if you request the Department to
make the change by either physically coming to the Department, faxing or mailing in your request, the charge is
$10.00.
As the chart indicates, more and more licensees are using the Online License Renewal System. More than 2,000
made changes on the OLRS during the month of October as well as 1,356 renewed their license..
As Wendy Cracchiolo found out on Halloween (October 31), it’s a crime to waste your valuable ($$$) time waiting in
line! So take advantage of the OLRS.

V O L U ME 3 1 , I S S U E 4

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Commissioner’s Final Orders
Appealable Agency Action
William D. King (Yuma)
File # 05F-LI-147, Final Order 09/06/05
After a hearing, the Department denied King’s application for
real estate broker’s license under A.R.S § 32-2153 (B)(1)(3)
and (7), as well as A.R.S. § 32-2130(E) based on two felony
convictions for Possession of Marijuana and Possession of
Drug Paraphernalia, in 2001, which made King ineligible for
license renewal.

William Colbert (Phoenix)
File # 05F-LI-161, Final Order 09/06/05
After a hearing, the Department denied Colbert’s application for real estate broker’s license renewal under A.R.S §
32-2153 (B)(2), as well as A.R.S. § 32-2130(E) based on
the felony conviction of Facilitating an Illegal Enterprise, in
5/04, and that Colbert is currently on felony probation,
which made Colbert ineligible for license renewal.

Terri Tchernoivanov (Gilbert)
File # 05F-LI-043, Final Order 9/6/05
After a hearing, in opposition to the Administrative Law
Judges’ decision recommending renewing a license, the
Department denied Tchernoivanov’s application for a real
estate Broker’s license renewal under A.R.S § 32-2153 (B)
(7) based on Tchernoivanov’s misdemeanor conviction for
Domestic Violence/Damage To Property in February 2004.
The Commissioner declined to grant Tchernoivanov
licensure, as she determined that the seriousness of the
crime as evidenced by the Petitioner’s disregard for the
safety of her husband and the property damage done to the
victim’s home indicates that Petitioner lacks the character
required for licensure. The totality of these circumstances
establishes sufficient grounds to deny the renewal of
Petitioner’s license.

Michelle Houze (Scottsdale)
File # 05F-LI-380 Final Order 9/30/05
The Department denied Houze’s application for a real
estate salesperson’s license under A.R.S § 32-2153 (B)(2)
(5)(9), and (10) for an undesignated conviction for Theft in
6/93 and two class 4 felony convictions for Fraud in 12/95.
Houze is granted a 2-year provisional license, subject to
specified terms and conditions. Houze shall post a ten
thousand dollar ($10,000.00) surety bond for two years.

Jennifer Elliott (Avondale)
File # 05F-LI-366, Final Order 09/06/05
After a hearing, the Department denied Elliott’s application
for real estate salesperson’s license under A.R.S § 32-2153
(B)(7) and (B)(10), based on a misdemeanor conviction for
Retail Theft, in 12/04, which indicates that Petitioner lacks
the honesty, truthfulness and good character required for
licensure.

V O L U ME 3 1 , I S S U E 4

CONSENT ORDERS
Debra S. Power-Thompson (Cottonwood)
File # 06F-LI-088-REL, Consent Order 10/13/05
On 7/28/05, Power-Thompson applied for a renewal of her
salesperson’s license. Power-Thompson admitted on her
application that she had been convicted of a misdemeanor
DUI, in 5/04. Power-Thompson failed to notify the Department within 10 days of that conviction, in violation of A.R.S
§ 32-2153 (A)(3) and A.A.C. R4-28-301(F). PowerThompson is assessed a civil penalty of two thousand dollars ($2,000.00).

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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
Gary Brasher, Chair
Lisa A. Suarez, Vice-Chair
R.L. Brown, Past Chair
Vicki L. Cox-Golder
Frank Dickens
Colleen Newman
Vince Pellerito
Lisa A. Suarez
Felipe Andres Zubia
Ann White

Note: Please check your mailing label and if the date
above your name is more than 1 year old, you must subscribe for another year. Send your request along with a
check payable to ADRE and note on your envelope:
Attention: Bulletin Subscription.
© 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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