A Message from Commissioner Elaine Richardson b u l l e t i n Department of Real Estate WHY ASK THE COMMISSIONER? Just last month ADRE received over 46,600 telephone calls. With numbers like that, it’s always interesting to try to improve service to our licensees. A “specialist” must handle many calls; however, many of the callers ask to speak to the Commissioner (me). Because of the tremendous volume, I am unable to answer each call individually, and, if it's a disciplinary issue, it's just not appropriate for the caller to reach me directly. So… after discussing this problem with other learned colleagues to find a solution, it was suggested that we create an ASK THE COMMISSIONER link on the ADRE’s webpage. You may e-mail a question and receive a response as promptly as possible. There will also be a link on the CONTACT INFORMATION page. If we receive similar questions numerous times, we will post the question (no names) and answer in a future Bulletin and on the webpage under Frequently Asked Questions. So what else is new? The Department's Online License Renewal System has been a great success and has played a huge part in allowing us to keep up as the number of licensees has exploded. Some brokers have commented, though, that it's too easy to use! Too easy, that is, for licensed employees (salespersons and associate brokers) to sever their employment without any prior notice to the broker. Concerns included that the salesperson (or associate broker) may be involved in transactions about which they've not told the broker, may not (Continued on page 6) Arizona T H E Inside this issue: Oct. / Nov. 2006 Volume 32 — Issue 5 News & Tips about Licensing & Education 2—5 How to Renew On-Line 4 From A Fiscal Viewpoint 5 Did You Know ... 6 ADRE’s New Look on the Web 7 Disclosure Assistance 8 Subdivisions Within a Subdivision 9 Guest Columns 10—13 Earth Fissures in Arizona 10—11 Arizona—Mexico Commission News Disciplinary Decisions 15 16—22 the ADRE mission The purpose of the Department is to protect the public interest through licensure and regulation of the real estate profession in the State of Arizona. NEWS & TIPS about Licensing & Education B. Safeguard their personal information by use of a password (optional for individuals, PCs and PLLCs). C. View and print their license renewal application filed on-line. D. Print a duplicate license certificate. E. Utilize the services currently available on-line under Phase I. Online License Services Now Available! Currently available services using the Online License Renewal System accessed from the Department's webpage www.azre.gov : . 1. 1) Brokers and salespersons can update their home address, telephone number and email address online free of charge. 2) File for renewal of salesperson and broker licenses before license expiration. 3) A salesperson/associate broker may sever employment from an employing broker. 4) A salesperson/associate broker may request to be hired (licensees should be sure the broker knows the request was submitted so the broker can log on to the Online Services and approve the hire before the licensee starts to work for the broker!). 5) Broker approval or disapproval of requests to be hired and license renewals. (Salespersons & Associate Brokers should Be Aware: If the broker disapproves, their employment is severed and the license is renewed on inactive status. Licensees should follow-up and monitor the status of their license so they do not conduct unlawful license activity!) Phase 2 of Online License Services is under development & is coming soon! Designated Brokers will be able to: A. Renew the employing broker's license. B. Renew a branch office license. C. Open a new branch office. D. Close a branch office. E. View and print the renewal applications filed by licensed employees. F. Safeguard the company's license filings by use of a password (mandatory for employing brokers). G. Print a duplicate license certificate for the brokerage or any of its licensed employees. Salespersons and Associate Brokers will be able to: A. Renew within their “grace year” -- the one year period following their license expiration date. 1. VOLUME 32 — ISSUE 5 OCTOBER / NOVEMBER 2006 Certain conditions apply. Licensees making a disclosure pursuant to Rule R4-28-301 or R4-28-303 (criminal conviction, adverse judgment, discipline or denial of a professional or occupational license, etc.) or pursuant to R4-28-306 (conducting activities requiring licensure while license was inactive or expired or employing a salesperson or broker whose license was inactive or expired) are NOT ELIGIBLE Check Your Expiration Date IF YOUR LICENSE HAS EXPIRED, you are no longer licensed to conduct business. As a general rule, the Department processes applications in the order received, whether filed by mail or in person. If you do not file a complete renewal application before your license expiration date, your license expires. You cannot be hired by a broker and licensed on "active status" until the Department has an opportunity to process your late-filed application. This may take several weeks due to the volume of applications being processed and the staff limitations. If you continued working while your license was not current or was not active-status, the Department will not accept a hire form and fee until the unlawful license activity is resolved and your renewal application approved. Late Renewal -- If filing within one year after license expiration, include the following forms, documents and fees: 1 Renewal Application, form LI-243 2 License Renewal & Reinstatement Questionnaire, form LI-244 3 Unlawful License Activity Statement, form LI(Continued on page 3) Page 2 NEWS & TIPS about Licensing & Education (Continued from page 2) 555, and applicable supporting documents. See R4-28-306. 1 Change form, LI-202, and $20 hire/sever fee (accepted with renewal only if you did NOT continue working after your license expired) 2 Renewal fee o Salesperson’s license, $60 o Associate Broker or Designated Broker license, $125 3 Late fee o Salesperson’s license, an additional $10 per month after expiration, not to exceed $60 o Associate Broker or Designated Broker license, an additional $20 per month after expiration, not to exceed $120 If your license expired more than one year ago, you must apply again as if applying for an original li- Protect Your License ! by Cindy Wilkinson, Director of Licensing & Professional Education Would you give a co-worker permission to sign your name to legal documents that affect your license? Probably not if you depend on the license for your livelihood! The Online Services System is easy and quick to use, and by doing it yourself you will know what changes are made and what information is provided to the Arizona Department of Real Estate about you and your license. Department staff hears too often that support staff in a broker's office has logged on for a salesperson and filed the application to renew the salesperson's license. This is a dangerous practice because they may provide wrong information or miss seeing an outdated residence or email address, and the Department recommends that you safeguard your personal information and do not authorize your broker or an employee to log in AS YOU and make changes on your behalf. The broker has a separate login to use to approve your hire or license renewal: You do not need to allow anyone else access to your license records! When you give someone else the information they need to access your license records and allow them to make changes, it is the same as if YOU accessed the records and made those changes--except that if you had done it VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 yourself, you might have seen critical information, such as your license expiration date. You might have realized you still needed to provide the Department with your new home address, or you might find a mistake in your home address or telephone number. According to the Terms and Conditions of use for using the Online Services, you have agreed that the Department can rely on the information provided in your online transactions. That's like giving another person permission to sign your name to legal documents -- Do you really want someone else to have that much control over your license? Enhancements under Phase II of the Online Services, available in early 2007, will provide an option for salespersons and brokers to require a password to access their personal license re- Proposed Education Fees by Cindy Wilkinson, Director of Licensing & Professional Education The Education Advisory Committee has developed recommendations for substantive criteria for accreditation of real estate schools. The recommendation for fees requires legislative change; there were numerous other recommendations that would require rule changes. A list of the items for consideration and discussion as rules will be posted soon. Industry stakeholders -- school owners, operators and other educators -- will seek legislation to authorize the Department of Real Estate to charge fees for review of applications to operate a real estate school, and for schools to seek real estate course and instructor approval. The proposed fees are: 1 School certificate, issued for a 4 year period, $500-$800 2 Continuing education course $25 to $150, depending on course length and whether live classroom instruction or distance education (computer-based) 3 Prelicensure courses, which follow prescribed curricula, from $100-$300 4 Instructor fees, also a 4-year license period, from $25 to $100 5 Renewal applications for most of these would be half of the original fee. No fees are currently authorized to cover the costs associated with the Department's review and processing of education applications. Page 3 NEWS & TIPS from Licensing & Education How to Renew On-Line by Connie Johnson, Deputy Director of Licensing Click on the ADRE web link http://www.azre.gov/ Near the top of the web page on the left is a link to On-line Services . Click on this link. Half way down this web page is a link to Online Licensing and Renewal System. Click on this link. You will be on the "Services" page. In the left column the second link is a "Tutorial". We recommend you run through the On-line Tutorial. Otherwise, read the instructions and gather the information you will need (license number and credit card; real estate licensees will need continuing education certificates). If you don't know your license number, click on the convenience link titled "Public Database" located in the center and near the beginning of the page. Enter your last name and first few letters of your first name. Use the side bar on the screen to scroll down and click "submit". You can look up any licensee's license information using this tool. Further instructions are given with each page. It is fast and easy! Ensure that you use the correct last four digits of your Social Security number. Type your date of birth in the format shown, mm/ dd/yyyy (two digits for month, two for day, and four for year) as instructed. If you make a mistake, delete all of the numbers in that field and type them again. Scroll down using the side bar on the screen and click on "Login". Follow the prompts to renew your license before VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 your license expiration date. You can also access the Online Services to change your personal information or request employment by a broker. NOTE: To file for license renewal after your license expiration date; or to disclose a criminal conviction, adverse judgment, discipline against a professional or occupational license; or if you received a conditional waiver of continuing education hours you must file for renewal in paper format and cannot renew using the online system. Did You Know … … under specific circumstances, a broker may pay a salesperson/associate broker a commission when that salesperson/associate broker worked on a transaction while licensed with the broker but who severed from the broker before close of escrow? The salesperson/associate broker cannot, however, continue to work on the transaction after having severed from the original broker, and payment is at the broker's discretion. The relevant statutes (ARS) and related Substantive Policy Statement (SPS) are: ARS § 32-2153(A)(8) says a licensee cannot represent any broker other than the broker with whom his/her license is hung. ARS § 32-2155(A) says a broker can only pay a licensee licensed to that broker and a licensee can only receive payment from the broker with whom the licensee's license is hung. SPS 2005.08 says if a licensee earns a commission under a broker then leaves the broker's employee the broker MAY pay the licensee the commission legally earned. ARS § 32-2152(B) provides that the Department of Real Estate does not have jurisdiction in commission disputes. EXAMPLE: If the licensee leaves broker "A" and (Continued on page 5) Page 4 (Continued from page 4) goes to work for broker "B" the licensee cannot continue to work on the transaction for "A" (32-2153. A.8). If "A" feels the licensee earned a commission on the transaction "A" MAY (but is not required to) pay the licensee the commission, even though the licensee no longer works for "A." (SPS 2005.08). If the licensee thinks "A" should pay a commission and "A" does not, the licensee can not come to the Department of Real Estate to resolve his issue, that is a commission dispute and the ADRE does not have any jurisdiction (32-2152.B). The licensee should seek legal counsel to consider legal/ civil action. Recent Comments About ADRE Staff This is a follow-up to my license renewal saga I first alerted you to last week. After a week, Mr. Cates (who I think does a wonderful job) indeed located one of my three faxes I sent to him last week. He promised to have the problem cleared up by later on today. Though I still think there’s a better “mouse-trap” for handling such problems when ADRE is short-staffed, though I’m still not renewed, all seems to be coming together. I hope you accept my comments for what they are, and good willed opinion in making the process flow a little better. Best Regards, Fred A. Cleman, REALTOR®, CRS, GRI, ABR Phoenix As you know, most brokers and agents fear the Department in light of the fact that you are all there to protect the public. I take a different view....you educate us (if we choose to take it in), you are fair if and when a complaint is file, you hold those in violation to account, but most importantly you keep us all accountable for our actions...I welcome everything I hear of and learn and choose to take action. Give the Commissioner my thanks, and please have her pass it to all at ADRE....I doubt that they hear the thanks that they so greatly deserve, particularly due to budget cuts, too many complaints and issues from buyers, sellers, agents, etc. that expect The Department to be the be all that ends all every day on "their" schedule! From A Fiscal Viewpoint by Tory Anderson, M.P.A., ADRE C. F.O. In ADRE’s first quarter this year, we renewed 35% MORE licenses than we did in last year’s first quarter. This shows that Arizona’s real estate licensees want to stay in the business. We expect this number to remain high throughout the year. If your license is up for renewal, save yourself some time and renew online through ADRE’s website: www.azre.gov All divisions within the Department remain incredibly busy. By the end of the first quarter of this fiscal year: Administrative Actions opened 183 cases, Auditing completed 80 field audits, Education received over 1,000 applications, Investigations opened 381 new cases, Licensing received over 2,600 new applications, and Subdivisions and Development Services issued 508 Public Reports. ADRE needs more staff to meet the increasing demands of the Real Estate industry. Per statute, the Department has to ask the Legislature for additional staff hiring authority, plus the money to pay that staff. This year, we requested 21 new positions. If we are granted those positions, the Department could reduce the time it takes to process applications, investigate cases, and discipline rule/statute violators. Currently, all fees are deposited into the General Fund and the Department is appropriated a portion of money from the General Fund for budgetary purposes. Last year we were appropriated $3.7 million, but the Department generated over $6 million in revenue. Decisions aren’t made in vacuums. If you support ADRE’s staff request, let your local Legislators know about it. If you belong to any professional associations, let them know as well. Your opinion matters – and it can make a difference! More ADRE staff = BETTER SERVICE FOR YOU! Again, my thanks to all! Karen Spencer, DB Karen Spencer & Associates - GMAC Real Estate, Yuma VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 Page 5 A Message from Commissioner Elaine Richardson (Continued from page 1) have turned over listing agreements, offers, contracts, earnest deposits, etc., and may have keys, manuals, or other items that should be returned to the broker. Although salespersons and associate brokers can sever by filing the notice in paper form as well as on-line, it is the on-line severance that has drawn the most fire. A group of stakeholders recently volunteered to meet with Department representatives to look for an acceptable alternative, and I am very excited to report a solution that will address the brokers' concerns without putting licensed employees at a disadvantage, and without placing an undue burden on the Department. The solution is to allow the employee to sever employment immediately, but only upon stating they have complied with requirements already in place in statute and rule. If the employee incorrectly states compliance when he or she has not complied, the broker may file a complaint against the salesperson or broker, and the former employee may be subject to disciplinary action against his or her license. The Department will implement this change in the near future. And…if you have not yet seen the ADRE Special Edition of the Bulletin called A THREE-YEAR REVIEW, please go to the website and peruse it. I promise it will not put you to sleep. I bring this up specifically as we are always looking for your input. You would be amazed at how many times we have been made aware of a problem or potential problem by listening to you. I’m not talking about the squeaky wheel who wants to circumvent statutes and rules and thinks by complaining a lot the law won’t apply to them, but I am talking about you (who would not be reading this if you did not care about our industry) who have legitimate issues and take the time to bring them to the Department. Please keep talking as, in the words of Frasier Crane, “I’m listening”. DID YOU KNOW when you submit any application with ADRE, if only one document or signature is missing from your application, it requires staff to work on the application at least twice and doubles the workload? This means the processing time increases, and it takes longer for your license to be issued. Department staff members are VOLUME 32 — ISSUE 5 OCTOBER / NOVEMBER 2006 glad to offer assistance for those inquiries that are not referenced in the instructions or on the web. Please don't take offense if you are referred to information on our Website or the instructions for a particular form. We are not always able to offer the one-on-one service that some of us remember, but we will do our best to help you. DID YOU KNOW you are required to disclose criminal convictions, adverse judgments, disciplinary actions or the denial of professional or occupational license to the Department in writing within ten (10) days of occurrence? For a complete listing of 'events' that must be disclosed, please refer to R4-28-301. If your disclosure is late, you can expect to pay a civil penalty. DID YOU KNOW you can send an e-mail directly to Commissioner Richardson to ask a question, give feedback, etc.? From the ADRE homepage (http://www. azre.gov), click on Commissioner's Homepage, select "Email the Commissioner" from the menu on the left side of the screen. Commissioner Richardson will review each message and either respond to it directly or forward it to the appropriate staff member for response. DID YOU KNOW, under specific circumstances, a broker may pay a salesperson/associate broker a commission when that salesperson/associate broker worked on a transaction while licensed with the broker but who severed from the broker before close of escrow? The salesperson/associate broker cannot, however, continue to work on the transaction after having severed from the original broker, and payment is at the broker's discretion. The relevant statutes and related Substantive Policy Statement are: ► ARS § 32-2152 (B) provides that the Department of Real Estate does not have jurisdiction in commission disputes. ► ARS § 32-2153(A)(8) says a licensee cannot represent any broker other than the broker with whom his/her license is hung. ► ARS § 32-2155(A) says a broker can only pay a licensee licensed to that broker and a licensee can only receive payment from the broker with whom the licensee's license is hung. ► S.P.S. 2005.08 says if a licensee earns a commission under a broker then leaves the broker's employee the broker MAY pay the licensee the commission legally earned. EXAMPLE: If the licensee leaves broker "A" and goes to work for broker "B" the licensee cannot continue to work on the transaction for "A" (32-2153.A.8). If "A" feels the licensee earned a commission on the transaction "A" MAY (but is not required to) pay the licensee the commission, even though the licensee no longer works for "A." (SPS 2005.08). If the licensee thinks "A" should pay a commission and "A" does not, the licensee can not come to the Department of Real Estate to resolve his issue, that is a commission dispute and the ADRE does not have any jurisdiction (32-2152.B). The licensee should seek legal counsel to consider legal/civil action. Page 6 ADRE’s New Look on the World Wide Web ADRE’s website has a new look and has been updated and made easier to navigate. Take a minute to visit it, if you haven’t already. We hope you will let us know about any aspects of the new design, and organization that may not be as helpful as we have tried to make them. One new feature is the FAQ (Frequently Asked Questions) link in the navigation bar at the top of the ADRE Home Page. We encourage you to click on that link before you phone the Department, because many of your questions have been asked before and answers to those “frequently asked questions” are answered on this page. Many of the answers there are written to cover the related information in depth. This page is constantly a work in progress, as staff fields more questions. If a topic isn’t there that you think ought to be, please let us know using the “Contact Us” option on the web page, or by sending an e-mail message to: info@azre.gov. This re-vamped web site was made possible by the diligent work by ADRE’s “behind the scenes” Information Technology (I.T.) Staff of 2 — Kevin Goode and Jim DeSilva. Their professional knowledge, technological skills, and dedication to Team ADRE works like magic in the background, making our work much more efficient and our service to ADRE licensees and to the general public better. Kevin Goode VOLUME 32 — ISSUE 4 Jim DeSilva AUGUST / SEPTEMBER 2006 Page 7 DISCLOSURE ASSISTANCE FROM ADRE by Roy Tanney, Director of Subdivisions & Land Development Services Arizona law requires disclosures in many areas covered by Subdivision Public Reports. The ADRE website, www.azre.gov, can help satisfy some of the disclosure requirements. The following includes questions from the Application for Subdivision Public Report and types of information available from the Department. Public Report, under the ‘Public Information’ link, click on the ‘Airport Maps’ link, which connects to the Public Airport page. This page only displays those maps provided by public airports. Earth Fissures 2 Military Airports 1 Is all or any portion of the subdivision located in territory in the vicinity of a military airport? 2 Is all or any portion of the subdivision located in 3 4 5 territory in the vicinity of an ancillary military facility? Is all or any portion of the subdivision located under a military training route? Is all or any portion of the subdivision located in a high noise or accident potential zone? Is all or any portion of the subdivision located under restricted air space? (This question is a result of recent legislation and has not yet been added to the application.) Many of these questions may be answered by researching the Department’s website. Under the ‘Public Information’ link, click on the ‘Airport Maps’ link, which connects to the Military Airport page. The Military Airport page provides the statutory definitions for ‘territory in the vicinity’, ancillary military facility, and ‘military training route’. Also contained on this page are all of the military airport, auxiliary airfield, restricted airspace and military training route maps to help your answer the questions and to help you make the proper disclosure in the Application for Public Report. Public Airports 1 Is all or any portion of the subdivision located in territory in the vicinity of a public airport? Many of the public airport maps are posted on the Department’s website. To answer this question and make the proper disclosure in your application and VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 Describe any known geological conditions such as fissures, sinkholes or other, within or lying close to the subdivision, which would or may be detrimental to a purchaser’s health, safety or welfare. Under the ‘Public Information link, click on the ‘Earth Fissures’ link. This provides three options: 3 Earth Fissures in Arizona – which links to the Arizona Department of Water Resources website of frequently asked questions concerning earth fissures. 4 Earth Fissures Index Maps – which links to the Arizona Geological Survey website. The map on this website shows the areas in four Arizona counties where earth fissures have been mapped or identified by the Arizona Geological Survey. Individual maps of counties can be viewed by clicking on a county. 5 Soil Properties: Shrink/Swell Potential – which links to the United States Department of Agriculture/ Natural Resources Conservation Service website. This website shows maps of soil shrink/swell potential in the Greater Phoenix area and Greater Tucson area. It also provide answers to frequently asked questions. The ‘Related Links’ page also includes a link to the Arizona Department of Environmental Quality, which retains information about Superfund sites. These are just some of the disclosures required of developers/subdividers and the information available from/ through the ADRE to meet them. The Department is pleased to provide these disclosure aids/links as a ser- Page 8 ADRE Investigations: News & Insights Subdivisions Within a Subdivision by Bill Day, Deputy Director of Subdivision Investigations If a person purchases lots in an approved subdivision, at what point does the purchaser become a subdivider and need to obtain a public report before offering any of the lots for sale? A.R.S. § 32-2101(54) defines a subdivider as “any person who offers for sale or lease six or more lots, parcels or fractional interest in a subdivision or who causes land to be subdivided into a subdivision for the subdivider or others, or who undertakes to develop a subdivision”. A.R.S. § 32-2101(14) “Common Promotional Plan” means a plan, undertaken by a person or group of persons acting in concert, to offer lots for sale or lease. If the land is offered for sale by a person or group of persons acting in concert, and the land is contiguous or is known, designated or advertised as a common unit or by a common name, the land is presumed, without regard to the number of lots covered by each individual offering, as being offered for sale or lease as part of a common promotional plan.” A.R.S. § 32-2181(A) states in part “Before offering subdivided lands for sale or lease, the subdivider shall notify the commissioner in writing of the subdividers intention”. (This means submitting an application for public report.) Scenario 2 If a person purchases three lots in a subdivision in 2004 and sells these lots, and then purchases 2 more lots in this subdivision in 2005 and sells these lots, a public report is not required. But if the person purchases one or more lots in this subdivision after the first 5 lots have been sold, the person is required to obtain a public report for the subsequent lots. There is no time limit over which the purchases occurred. If the person purchases 3 lots in 1979 and sells them and then in 2006 purchases three or more lots, the person is required to obtain a public report before offering any of the lots for sale. Scenario 3 A subdivision was platted in 1926 and no improvements have been made. In 2006 a person purchases six or more lots. That person is required to obtain a public report before offering any of the lots for sale. Scenario 4 Mr. X purchases four lots in a subdivision. Mr. X owns company Y, which purchases four lots in the same subdivision. Mr. X and company Y are required to obtain a public report prior to offering the lots for sale. For subdivision purposes ownership interest includes but not limited to deeds, option agreements, executed purchase contracts, trust agreements and agreements of sale. A.R.S. § 32-2183(F) states in part “ A subdivider shall not sell or lease or offer for sale or lease in this state any lots, parcels or fractional interest in a subdivision without first obtaining a public report from the commissioner except as provided in section 322181.01 or 32-2181.02”. Scenario 1 If a person owns or has an ownership interest in six or more lots in an approved subdivision, that person must obtain a public report. before offering for sale or selling any of the lots VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 Page 9 Guest Columns Earth Fissures in Arizona by Ray Harris, Arizona Geological Survey EDITOR’S NOTE: The 2006 Legislature passed House Bill 2639, and Governor Napolitano signed it into law. This Bill required earth fissure maps be made available to the public as an information source in the due diligence exercise prior to real estate purchase transactions. ADRE is working closely with the Arizona Geological Survey (AZGS) and the Arizona State Land Department to make these maps available as soon as they have been prepared and published by the AZGS. The following article provides some useful background information from a recognized expert in the field. In recent years, with the population expanding into areas known to have earth fissures, the potential for damage to property has increased. The issue today is not so much earth fissures forming where people have built houses - the larger problem is people building houses on or adjacent to known fissures. Until recently, land owners, developers and real estate agents were not required to specifically disclose the presence of earth fissures on property being sold. With the recent increased awareness of the problem the legislature passed a new state law that requires the seller to disclose whether fissures are known to exist on or near a parcel of land. The disclosure of fissures is similar to that for more familiar things such as proximity to airports and hazardous waste sites, and known soil or radon problems. Real estate agents now must be more familiar with what earth fissures are and where they occur. The southern and western part of Arizona lies within the Basin and Range province, which contains deep sediment-filled basins separated by long, narrow mountain ranges. Bedrock under the basins is commonly thousands of feet below the surface. VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 These deep basins hold large quantities of groundwater, but the water is being pumped out much faster than it can be replenished by nature. Where agriculture or municipalities rely extensively or completely on groundwater, the groundwater tables have dropped. By the 1980s, groundwater levels in several basins had declined 300 feet or more. As groundwater tables lower, aquifer sediments compact and the ground surface subsides. In the Luke basin, immediately west of Phoenix, the land had subsided about 18 feet by 1992. In the Picacho basin near Eloy, subsidence was more than 15 feet by the early 1980s. Around the margins of subsiding areas the aquifer sediments are under tension. When the tension becomes great enough, cracks, known as earth fissures, will form. Although earth fissures seem to appear “overnight” following intense rainfall, the precursor fissure may have been forming for years or even decades at depth. In the earliest stages of development, a fissure may first appear at the surface as a series of small depressions or small cracks only a few inches wide and tens of yards long. Water running into the fissure erodes the sides and washes the material deep down into the fissure system, enlarging the original small crack into an impressive chasm. The Rogers Fissure opened in 1997 in the Harquahala plain about 60 miles west of Phoenix following heavy rain from Hurricane Nora. This fissure is about 4,500 feet long. When active and growing, the surface expression of a typical earth fissure is 3 to 10 feet wide and 5 to 20 feet in apparent depth. The underlying fissure (Continued on page 11) Page 10 Guest Columns (Continued from page 10) system is much deeper than that. Individual fissures can extend along the surface for thousands of feet and zones of fissures can extend many miles. Earth fissures can cause significant damage to infrastructure such as roads, canals, railroads and pipelines. Buildings and houses have been damaged by fissures that opened up beneath them. The presence of cracks in foundations and walls, however, does not necessarily indicate that subsidence or earth fissures are to blame. The Arizona Geological Survey (AZGS) is the lead agency in the state for earth fissure mapping. Decreased funding over the past decade, however, hampered efforts to keep fissure mapping up to date. Another piece of legislation passed in 2006, HB-2639, gives AZGS funding to comprehensively map fissures and produce digital maps. As areas are mapped in detail the digital fissure mapping will be available to the public on the Arizona State Land Department’s interactive website that will allow users to create their own custom maps. Up to date maps of fissure areas and educational publications will also be posted on the AZGS and State Department of Real Estate websites. With these services, REALTORS® eventually will be able to find fissure maps for any location. However, the first round of statewide mapping will take several years to complete. In the meantime, information about earth fissures and other geologic hazards of interest to real estate agents is available on the AZGS website, www.azgs. az.gov. This fissure is along the Hunt Highway near Thompson Road. It is one of the few fissures in Arizona that has vertical offset. Raymond C. Harris, Research Geologist, AzGS: B.S., Oregon State University; M.S., University of Arizona. Expansive soil, collapsing soil, and normal settling of fill material can also produce cracks in structures. A NOTE ABOUT GUEST COLUMN ARTICLES Guest column articles do not reflect the policies or interpretations of law by the Arizona Department of Real Estate. They are meant to inform the public and provide variety to ADRE’s Bulletin. All articles are edited for space limitations. This fissure is the segment of an old fissure that opened up last summer south of Queen Creek (Chandler Heights area) at Happy Road & 195th. This fissure, known as the “YCrack”, formed in the early 1960s. VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 Page 11 Guest Columns The Builder, The Buyer & The Bucks An opinion of Cec Daniels, ePRO, GRI First, I want to make it clear that this opinion is not intended to be an attack on builders. In-fact, I have great empathy with the builder who is paying huge holding costs, permit fees and impact fees. Add to these fees, the cost of engineering, zoning, required infrastructure you would find thousands of dollars in costs that can only be recovered through sales of the property. Having said that, I feel that there is a significant lack of balance between the agendas of the buyer and the builder. In recent times, some builders have failed for any number of reasons. As a result of the failures, the buyer has suffered the loss of substantial earnest money. How can that be? It is not uncommon to find a builder contract to include a provision that reads something like this: …In the event the builder is unable or unwilling to complete the transaction the earnest money shall be forfeited in favor of the builder. I am not an attorney and am not trying to offer a legal opinion or interpretation of any portion of this type of language in a contract. I only know that there are several examples of buyers losing earnest money when in-fact the circumstances suggest that it was the builder in default and not the buyer. So, is there a reasonable compromise? I believe so and I would like to suggest that buyers be allowed to record their contract with the builder and perhaps even create a statute wherein the builder would be required to establish and “equitable interest” for the buyer. I am aware of some instances where the builder declared bankruptcy and as a result, the buyer, absent having an equitable interest in the property the buyer is often classed as an unsecured creditor and could lose a majority of their earnest money. VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 If this suggestion is not the answer, I feel there has to be a greater balance between the competing agendas of the buyer and the builder. In closing, I want to make it very clear that none of the organizations of which I am a member or support have been a part of this opinion. I am acting independently in writing this article and seek nothing more than some action be taken that protects the American Dream and does so without damaging anyone in the transaction. Cec Daniels holds real estate licenses in three states, is a member of the National, the Arizona, and the Phoenix Associations of Realtors® . He is a former member and past president of the Arizona Chapter of the Real Estate Educators Association. Cec was named the 1996 Educator of the Year by the National Association of Realtors ®. Selecting the REALTOR ® Word by Diane Scherer, CEO Phoenix Association of REALTORS ® Words, even a single word, can create an image or give us ideas. Corporations and trade organizations go to untold lengths and spend millions to give you a particular image when you use “their” word. What word do you use for a cola drink, a copy machine, tissue or a light beer? When did you become a REALTOR®? When you were born? When you passed your state exam for a real estate license? When you were hired by a real estate firm? Nope, nope and nope. If you are a REALTOR®, you became a REALTOR® when you applied for and completed the membership requirements of a local association of REALTORS®. “REALTOR®” is a collective membership mark owned by the National Association of REALTORS® (NAR). The REALTOR® organization is unique in that when a real estate licensee joins a local association, completes their orientation and Code of Ethics requirement and becomes a REALTOR® member they are a member at all three levels of the REALTOR® family – local, state and national. REALTOR® members not only take Code of Ethics training but are held to that higher standard by (Continued on page 13) Page 12 Guest Columns (Continued from page 12) both their peers and the public. For licensees that are not REALTORS® they are not accountable to the REALTOR® organization. REALTOR® membership is a voluntary individual membership. For that reason there is limited usage of the word REALTOR® in a firm name. It is not allowed to be contained in the firms actual name, including either the corporate or fictitious name. The word REALTOR® can only be used “with” the name, not as a part of a name AND some form of punctuation must be used to separate the term REALTORS® from the company name. REALTOR® members may use the term REALTOR® as part of an email address or domain name to distinguish themselves; however , rules governing the proper use of the REALTOR® mark must be adhered to at all times regardless of the media used. An individual may use their name and the word REALTOR® such as JohnDoeREALTOR@xyz.com or JDoeREALTOR@abc.net or john@jdoerealtor.com. Descriptive words used in combination with the word REALTOR® are never allowed, for example, PhoenixREALTOR@webnetservices. com , GreatREALTOR@johndoe.com, TheBestREALTOR@bestrealtor.com. The preferred way for the word REALTOR® or REALTORS is always in all capital letters with a registration mark. When that is not possible, the term REATOR may appear in all upper case letters without the registration or with only initial upper case “R” and the registration symbol. There are two exceptions (1) on the internet, which has adopted the use of lower case only letters without symbols and (2) when in newspapers and print media. In news media it is permissible (not preferable) for Realtor® to appear in upper and lower case without the registration mark. ® The REALTOR® trademark distinguishes REALTORS from all other real estate licensees in the real estate profession. A group of real estate licensees should never be called REALTORS® unless you intend to identify them as Members of a REALTOR® Association and every member of the group is indeed a REALTOR®. Firm’s marketing their products and services to real estate agents should not use the term REALTOR® unless it is in reference to a particular member. Generally speaking, it is inappropriate for firms soliciting real estate agents to use the word REALTOR® in their advertising campaigns. If a private firm, such as an insurance company or carpet firm, is having a networking breakfast, it can not be entitled “REALTOR® Breakfast” just as any organization outside the REALTOR® organization is prohibited from giving an award named “REALTOR® of the Year”. The “REALTOR® of the Year” award is one of the most prestigious and highly sought after awards in any REALTOR® Association. Reverse Mortgages & Older Americans reprinted with permission from The Brodsky School of Real Estate October 2006 Newsletter Many senior citizens who own their homes free and clear or have very high equity in their homes, find themselves “house-rich” but “cash-poor”. Their standard of living is steadily decreasing because they are living on fixed incomes but face increasing expenses. For those who are older than 62, have a strong desire to remain in their existing homes, do not want to pass the house on to their heirs, and could use some extra monthly cash, a reverse mortgage may be a solution in their waning years. In a reverse mortgage, a lender makes a lump-sum payment, a monthly payment, or any combination of the above to the borrower. It should be understood by the borrower that she is, in essence, giving the house to the lender. If the borrower lives a very long life, the monthly payments will keep on coming and the lender’s only recourse is the house itself and cannot go after any other assets. Consider the following: The payments received are considered a loan and not income and will therefore not affect Social Security or Medicare benefits The age 65+ population is increasing by 300,000 people per year About 1 in 8 Americans is over 65 now and by 2030 this population will more than double to 71 million Persons reaching age 65 have an average life expectancy of another 18.2 years In 2003 of older persons who reported income, 51% reported less than $15,000 For one-third of Americans over 65, Social Security benefits constitute 90% of their income Over 400,000 grandparents aged 65+ have a primary responsibility for their grandchildren who live with them One-third of all older people live alone There are five times as many older women living alone in poverty than men Almost 50% of those aged 85 and over live alone * ® Oh and by the way, did you know that when you hear the term REALTOR® it could be someone other than a real estate licensee? For example, a principal, partner or corporate officer of a real estate firm or a licensed or certified appraiser? It has been estimated that increased use of reverse mortgages could significantly reduce poverty among the elderly. … * Statistics from “A Profile of Older Americans: 2004 Compiled by the Administration on Aging and the U.S. Department of Health and Human Services” So, have I changed your view of the word REALTOR®? VOLUME 32 — ISSUE 4 AUGUST / SEPTEMBER 2006 Page 13 Commissioner Richardson Hard at Work Buying & Selling Mexican Real Estate At the ARELLO Conference The Arizona Department of Real Estate (ADRE) recently unveiled its newly designed website. One of the many additions to the ADRE website is a section devoted to Cross-Border transactions. This new section was developed by the Cross-Border Transactions Committee, co-chaired by ADRE Commissioner Elaine Richardson and Arizona Association of REALTORS® General Counsel, Michelle Lind. On September 24, 2006, the Commissioner, Cindy Wilkinson and I traveled to San Antonio, Texas to attend the yearly ARELLO (Association of Real Estate License Law Officials) conference. I submitted a proposal to ARELLO last year on facilitating a panel discussion/workshop on real estate in Mexico. Committee members included: Cindy Ferrin, Doug Groppenbacher, John Gerard, John Slattery, Jose Padilla, Juan Moreno, Judy Lowe, Mary Utley, Michael McCalley, Michael Patterson, Roger Breckenridge, Thomas DeSollar, Jeff Peterson, Steve Barger and Ed Ricketts, Coordinator. The committee recognized that there was a wealth of information on Mexican real estate transactions from a variety of sources, but the information was not organized in a user-friendly format that encouraged education. Thus, the committee identified and compiled the available information, associations and professionals that could assist in an ArizonaMexico real estate transaction to include on the website. The website was designed as a “first-stop” to give the unfamiliar consumer an opportunity to learn some basic rules on purchasing and selling real estate in Mexico, as well as to provide the reader with contacts that might assist in such a transaction. The website contains articles and references to help locate attorneys, real estate brokers, translators/interpreters, appraisers, escrow/title insurance companies, and finance/mortgage companies. Consumers will also find information and website links to: Mexico real estate resources for Arizonans, types of Mexico real estate transactions, and facts and myths about Mexico real estate transactions. There is also a section for foreign nationals to obtain information on buying real estate in Arizona. by Mary Utley, Communications Director Although the proposal was not selected for the Toronto Conference in 2005, it was chosen this year. The title of the workshop was “Languages, Cultures and Treaties: Immigration and Cross-Border Transactions and the Regulator”. Members of the panel were: Commissioner Elaine Richardson (Arizona Department of Real Estate and Co-Chair of the Arizona-Mexico Commissioner/Real Estate Ad Hoc Committee), Benjamin Torres-Barron (Attorney with Baker & McKenzie, El Paso, Texas), Kevin O’Shea and Mariana Silveira (National Law Center for Inter-American Free Trade, Tucson, Arizona). Each participant shared their expertise and knowledge on real estate transactions in Mexico. Kevin O’Shea and Mariana Silveira presented information on NAFTA and the Securitization Project that the National Law Center is spearheading. Commissioner Richardson discussed on the Real Estate Ad Hoc Committee as well as the various activities and accomplishment of the group. Benjamin Torres-Barron made a Power Point® presentation on “Introduction to Real Estate Transactions”. The workshop was well attended and received and is anticipated to result in future presentations. The committee hopes that this website will prove to be an important and useful tool to consumers in the process of purchasing land in Mexico. The ADRE website is located at www.azre.gov The three other panelists who joined Commissioner Richardson on the dais, left to right: Benjamin Torres-Barron, Mariana Silveira, & Kevin O’Shea. VOLUME 32 — ISSUE 5 OCTOBER / NOVEMBER 2006 Page 14 Real Estate Ad Hoc Committee As many of you may know, the Arizona Department of Real Estate and the Arizona-Mexico Commission (AMC)- Real Estate Ad Hoc Committee have been facilitating educational workshops on real estate transactions in Mexico, specifically Sonora. The first workshop was held on October 27, 2005 with the last being held on September 28, 2006. All of the workshops were held at the Thunderbird School of International Management (who was one of the sponsors) under the direction of Raul O’Farrill, committee member. Other sponsors were IMI Group, O’Farrill & Associates, P.A., and Spanish Media services. Participants in these workshops were able to listen to experts from both Arizona and Sonora on the intricacies of conducting real estate transactions in Mexico. The Department issued continuing education credit to licensees for some of the programs. Commissioner Richardson Out-&-About in the Real Estate Community At “Leadership Class X” Scottsdale Area Association of REALTORS® Feedback was very positive regarding the workshops. Much of the content of the workshops will be incorporated into continuing education for real estate professionals in Sonora. The Committee and ADRE were appreciative of the AMC and ADRE staff that assisted in the success of these workshops. Vicki Ray, President, Women’s Council of REALTORS® White Mountain Chapter (Center) with Cindy Wilkinson (left) and Commissioner Richardson (right). At “The NE Economic Summit” in Payson VOLUME 32 — ISSUE 5 OCTOBER / NOVEMBER 2006 Page 15 DISCIPLINARY DECISIONS in alpha order by type of action By Consent Order Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Joshua Allen Ahern Phoenix, AZ SA549916000 January 2005 conviction for DUI, failed to notify the Department of the conviction in a timely manner. Failed to respond to repeated requests from Department. Summary Suspension issued on July 5, 2006. August 30, 2006 Vacate Summary Suspension, 2 year Provisional License with Broker Acknowledgment, $2,000 Civil Penalty, 6 hr CE in Commissioner's Standards Debra J. Baker Phoenix, AZ SA031579000 Respondent listed a property with ensuring that the SPDS was accurate. August 4, 2006 $1,000 Civil Penalty Kenneth V. Bates Scottsdale, AZ BR007291000 Respondent failed to disclose being an involved principal in a sales transaction. September 7, 2006 $1,000 Civil Penalty Perry Alexander Bergalt Phoenix, AZ SA520340000 Respondent convicted of DUI in December of 2005. August 4, 2006 1 year license suspension, $2,000 Civil Penalty Gretchen G. Beyers Wickenburg, AZ BR112722000 Respondent listed subdivided properties for sale that did not have a Public Report. August 4, 2006 2 year Provisional License with Broker Acknowledgment, Cease and Desist sales, $1,000 Civil Penalty, 6 hr CE in Commissioner's Standards Caliber Holdings, L.L.C. South Jordan, UT Unlicensed Entity Respondent failed to disclose an action taken by the AZ Registrar of Contractors when applying for a Public Report. August 22, 2006 $5,000 Civil Penalty (jointly and severally), amend Public Report Douglas Barron Calvet Yuma, AZ BR524652000 Respondent offered education courses and operated a real estate school without appropriate Department approval September 15, 2006 VOLUME 32 — ISSUE 5 OCTOBER / NOVEMBER 2006 Action 2 year Provisional License, $2,000 Civil Penalty, Name Location: License Number Summary James L. Corbet Wickenburg, AZ BR013429000 Multiple violations, including failure to disclose license status while acting as a principal in a transaction; failing to properly disclose a referral fee paid to an individual; failed to review, initial and date agreements; failed to immediately place client funds in a neutral escrow account; failed to supervise. September 7, 2006 2 year Provisional License, $3,000 Civil Penalty, 12 hr CE (3 hr CE in General Real Estate, 6 hr CE in Commissioner's Standards, 3 hr Broker Management Clinic), develop an acceptable Broker Procedure Manual Order Date Action Name Location: License Number Summary Order Date Action Karen "KC" A. Cyga Phoenix, AZ BR111796000 Respondent employed unlicensed individuals. August 30, 2006 $3,000 Civil Penalty, 2 year Provisional License, 3 hr CE in Commissioner's Standards, 3 hr Broker Management Clinic, develop written procedures to prevent unlicensed activity. Name Location: License Number Summary Order Date Action Dennis Brian Deliman Prescott, AZ SA560340000 2005 conviction for Theft. August 25, 2006 2 year Provisional License with Practice Monitor, $25,000 Surety Bond Name Location: License Number Summary Danilo Djordjevic Scottsdale, AZ SA522626000 January 2005 misdemeanor convictions for DUI and Possession of Drug Paraphernalia. Failed to report the convictions to the Department in a timely manner. August 22, 2006 $2,000 Civil Penalty, 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Aaron M. Drye et al Flagstaff, AZ Unlicensed Individuals Respondents acted in concert to sell subdivided lots without complying with applicable subdivisions statutes and rules. September 7, 2006 Comply with all applicable statutes and rules regarding sales of subdivided properties. Tiana Duvauchelle Anthem, AZ SA564572000 Failed to disclose, within 10 days, August 2005 misdemeanor convictions for sale of alcoholic beverages to an minor and failure to check identification. September 26, 2006 $1,000 Civil Penalty Page 16 DISCIPLINARY DECISIONS Consent Orders continued Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Flannery & Allen, LLC Las Vegas, NV Unlicensed Entity Respondent sold multiple subdivided lots without complying with applicable subdivision statutes and rules. August 22, 2006 Cease & Desist, $45,000 Civil Penalty & $30,000 Grant to Education Fund (joint & several), Rescission, apply for Public Report Mary Lou Foster Scottsdale, AZ SA045063000 Respondent disclosed an August 2004 DUI conviction when submitting a late renewal application in July of 2006. Respondent conducted unlicensed activity. September 29, 2006 License granted, 2 year Provisional License with Broker Acknowledgment, $2,000 Civil Penalty Name Location: License Number Summary Order Date Action Matthew Bryant Gardner Phoenix, AZ SA557469000 June 2005 conviction for Extreme DUI and DUI. August 25, 2006 2 year Provisional License with Broker Acknowledgment, $1,000 Civil Penalty, 2 year Body Fluid Testing Name Location: License Number Summary Gateway Lots, LLC Las Vegas, NV Unlicensed Entity Respondent sold multiple subdivided lots without complying with applicable subdivision statutes and rules. August 22, 2006 Cease & Desist, $45,000 Civil Penalty & $30,000 Grant to Education Fund (joint & several) , Rescission, apply for Public Report Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action GHR Development, Inc. Scottsdale, AZ Unlicensed Entity Respondent failed to amend Public Report and provided inaccurate or incomplete information. August 4, 2006 $2,500 Civil Penalty Osvaldo R. Gudino Mesa, AZ SA572629000 Respondent disclosed a March 2006 misdemeanor conviction for Extreme DUI. September 26, 2006 2 year Provisional License with Broker Acknowledgment, $1,000 Civil Penalty, 2 year Body Fluid Testing VOLUME 32 — ISSUE 5 OCTOBER / NOVEMBER 2006 Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Michael Adam Hurley Bullhead City, AZ Unlicensed Applicant Applicant convicted of misdemeanor Assault and Criminal Damage in October of 2004. August 7, 2006 License granted, 2 year Provisional License with Practice Monitor, $10,000 Surety Bond Heather John Phoenix, AZ SA508179000 Respondent failed to deposit earnest money funds into a neutral escrow account. August 30, 2006 $1,000 Civil Penalty, 6 hr CE in Commissioner's Standards, 2 year Provisional License with Broker Acknowledgment Jeffrey S. Kantor Scottsdale, AZ SA533218000 In February of 2006, Respondent convicted of DUI. Respondent failed to timely notify the Department of the conviction. September 5, 2006 License granted, $2,000 Civil Penalty, 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing Andrew S. Keener Mesa, AZ SA572379000 Respondent timely disclosed a March 2006 misdemeanor conviction for Extreme DUI. September 28, 2006 2 year Provisional License with Broker Acknowledgment, $1,000 Civil Penalty, 2 year Body Fluid Testing Kino Springs Golf Course L.L.C. Santa Cruz County, AZ Unlicensed Entity Respondent sold lots in a subdivision without a valid Public Report and complying with applicable subdivision statutes and rules August 22, 2006 $8,000 Civil Penalty, Rescission, apply for Public Report Name Location: License Number Summary Order Date Action Ira S. Kristol Scottsdale, AZ BR043830000 Respondent employed an unlicensed individual. August 18, 2006 License granted, $2,000 Civil Penalty, 3 hr CE in Commissioner's Standards, 3 hr Broker Management Clinic, 2 year Provisional License, develop written procedures to prevent unlicensed activity. Name Location: License Number Summary Order Date Action Dennis Krostal Green Valley, AZ BR039084000 Respondent employed an unlicensed individual. August 15, 2006 $3,000 Civil Penalty Page 17 DISCIPLINARY DECISIONS Consent Orders continued Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Patricia Leigh Phoenix, AZ Unlicensed Applicant Applicant disclosed a May 2000 misdemeanor conviction for DUI-Liquor/Drugs/Vapors/Combo and a December 2003 misdemeanor conviction for DUI. September 29, 2006 License granted, 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing Sammy Lewin Prescott, AZ SA512110000 Multiple misdemeanor convictions in 2004 of DUI. Failed to report the convictions to the Department in a time manner. August 10, 2006 $3,000 Civil Penalty, 6 hr CE in Commissioner's Standards, 2 year Provisional License with Practice Monitor Michael Lichtie South Jordan, UT Unlicensed Individual Respondent failed to disclose an action taken by the AZ Registrar of Contractors when applying for a Public Report. August 22, 2006 $5,000 Civil Penalty (jointly and severally), amend Public Report Robert Lontkowski Scottsdale, AZ Unlicensed Applicant Applicant disclosed a December 1987 conviction in US District Court for Embezzlement. September 5, 2006 License granted, 2 year Provisional License with Practice Monitor, $25,000 Surety Bond James Robert Macallister Scottsdale, AZ SA555474000 Respondent convicted of Extreme DUI in November of 2005 August 7, 2006 License Revocation Richard Madden, Jr. Gilbert, AZ SA538666000 Respondent's advertisement failed to clearly and prominently display the broker's name. September 11, 2006 $500 Civil Penalty, 6 hr CE in Commissioner's Standards Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action V O L U ME 3 2 — I S SU E 5 OCTOBER / NOVEMBER 2006 Pedro "Pete" Marino Gold Canyon, AZ SA045557000 Respondent failed to properly credit buyers with appropriate monies. Failed to maintain proper paperwork and files. Accepted a commission that was not paid through broker. September 19, 2006 2 year Provisional License with Practice Monitor, $5,000 civil penalty, 6 hr CE in Commissioner's Standards Tiffany Martindale Chandler, AZ Unlicensed Applicant Applicant disclosed a June 2003 misdemeanor conviction for Adult Entertainment violations. October 2, 2006 License granted, 2 year Provisional License Ralph J. McGrath Scottsdale, AZ Unlicensed Individual Respondent failed to amend Public Report and provided inaccurate or incomplete information. August 4, 2006 $2,500 Civil Penalty Tamara D. Molino Mesa SA549875000 Respondent convicted of Aggravated Driving While Under the Influence of Intoxicating Liquor or Drugs. Respondent failed to timely notify the Department of the conviction. September 15, 2006 License granted, $2,000 Civil Penalty, 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing, AA meeting attendance and sobriety monitor Cesar Ortiz Yuma, AZ Unlicensed Applicant Applicant disclosed a February 2001 misdemeanor conviction for Simple Battery. September 27, 2006 License granted, 2 year Provisional License with Practice Monitor Jared Payne Mesa, AZ SA557793000 Respondent failed to disclose a misdemeanor conviction for Excessive Speed when applying for original license. Failed to disclose a December 2005 misdemeanor conviction for Excessive Speed in a timely manner September 15, 2006 2 year Provisional License with Broker Acknowledgment, $2,000 Civil Penalty, 6 hr CE in Commissioner's Standards Page 18 DISCIPLINARY DECISIONS Consent Orders continued Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Michael R. Rassler Glendale, AZ SA531616000 Respondent signed documents on behalf of an individual without having appropriate written authorization to do so. August 16, 2006 2 year Provisional License with Practice Monitor, $2,000 Civil Penalty, 6 hr CE in Commissioner's Standards Devon Robbins Scottsdale, AZ Unlicensed Applicant Applicant disclosed a December 2004 misdemeanor conviction for Assault and a December 1998 misdemeanor conviction for Assault. September 11, 2006 License granted, 2 year Provisional License with Practice Monitor Jose Robledo Yuma, AZ Unlicensed Applicant Respondent disclosed a February 1997 felony conviction for Willfully Aiding and Assisting in Preparation of a Materially False 1992 Income Tax Return September 28, 2006 License granted, 2 year Provisional License with Practice Monitor, $25,000 Surety Bond Zacharias Rodriguez Tucson, AZ BR529408000 Respondent failed to disclose a 1995 misdemeanor conviction when applying for original license in 2005. August 2, 2006 $1,000 Civil Penalty, 6 hr CE in Commissioner's Standards, 2 year Provisional License James Louis Schmidt Green Valley, AZ BR532046000 Respondent failed to timely notify the Department of a 2003 action taken by the State of Oregon against Respondent's Oregon license. September 15, 2006 2 year Provisional License with Broker Acknowledgment, $1,000 Civil Penalty, 6 hr CE in Commissioner's Standards Floyd Scott Phoenix, AZ BR007247000 Failed to exercise reasonable supervision over the activities of a salesperson. August 22, 2006 $2,000 Civil Penalty V O L U ME 3 2 — I S SU E 5 OCTOBER / NOVEMBER 2006 Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Sean P. Sherlock Amado, AZ SA042822000 Respondent conducted sales activities with an expired license. August 18, 2006 License granted, $3,000 Civil Penalty, 2 year Provisional License with Broker Acknowledgment. A. Chad Shriner Mesa, AZ BR540737000 Respondent failed to exercise reasonable supervision over a salesperson's activities. September 8, 2006 $500 Civil Penalty Jeanay Sirrine Scottsdale, AZ SA571492000 Respondent signed the name of another person on a document without the express written consent of the person. September 7, 2006 $2,000 Civil Penalty, 12 hr CE in Commissioner's Standards, 30 day License Suspension, 2 year Provisional License with Practice Monitor Mark Smith Mesa, AZ SA543184000 Respondent failed to deposit earnest money funds into a neutral escrow account. September 8, 2006 $1,000 Civil Penalty, 6 hr CE in Commissioner's Standards, 2 year Provisional License with Broker Acknowledgment Name Location: License Number Summary Order Date Action Stephen John Smith Phoenix, AZ SA542224000 April 2005 conviction for DUI. September 11, 2006 2 year Provisional License with Broker Acknowledgment, $1,000 Civil Penalty Name Location: License Number Summary Linda Tierney Scottsdale, AZ Unlicensed Applicant Applicant disclosed an October 2003 misdemeanor conviction for Assault. August 3, 2006 License granted, 2 year Provisional License with Practice Monitor Order Date Action Name Location: License Number Summary Order Date Action Savannah J. Varns Glendale, AZ SA569546000 Respondent timely disclosed a December 2005 misdemeanor conviction for Extreme DUI. September 29, 2006 $1,000 Civil Penalty, 2 year Provisional License with Broker Acknowledgment, 2 year Body Fluid Testing Page 19 DISCIPLINARY DECISIONS Consent Orders continued & Commissioner’s Final Orders Name Location: License Number Summary Order Date Action Rod Whitt Phoenix, AZ SA103042000 Respondent signed documents on behalf of an individual without having appropriate written authorization to do so. September 18, 2006 2 year Provisional License with Broker Acknowledgment, $1,000 Civil Penalty, 6 hr CE in Commissioner's Standards By Commissioner's Final Order Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Drug Paraphernalia, 2000 failure to comply with probation, 2000 felony conviction for Possession of Chemicals and Equipment to Manufacture Dangerous Drugs and Criminal Trespass. Order Date Action September 8, 2006 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing, Sobriety Monitor and AA attendance. Name Location: License Number Summary James Dedario Phoenix, AZ BR031807000 March 30, 2006 Summary Suspension upheld, based on licensee's January 2006 felony conviction for Aggravated DUI. August 30, 2006 Summary Suspension upheld James Steven Bullard Mesa, AZ Unlicensed Applicant As part of an original license application, applicant disclosed drug-related felony convictions in 1994, 1996 and 2000. September 8, 2006 Denial of License Order Date Action Michael James Burns Phoenix, AZ Unlicensed Applicant As part of a 2006 original license application, applicant disclosed a 2003 felony conviction for Possession for Sale of Narcotic Drugs and Resisting Arrest as well as a Probation violation in 2004. 2004 late renewal application was denied. August 18, 2006 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing, Sobriety Monitor and AA attendance. Order Date Action Michael James Burns Phoenix, AZ Unlicensed Applicant Request for review or rehearing of August 18, 2006 Commissioner's Final Order, appeal denied September 28, 2006 2 year Provisional License with Practice Monitor, 2 year Body Fluid Testing, Sobriety Monitor and AA attendance. Name Location: License Number Summary Harvey Burr Mesa, AZ Unlicensed Applicant As part of an original license application, applicant disclosed 1992 and 1995 convictions for False Statements. September 5, 2006 Denial of License Jason T. Clark Phoenix, AZ SA540732000 Misrepresented the terms of a lease/purchase agreement September 29, 2006 Denial of License Renewal Erica Decker Chandler, AZ Unlicensed Applicant As part of an original license application, applicant disclosed a 1998 conviction for Possession of V O L U ME 3 2 — I S SU E 5 OCTOBER / NOVEMBER 2006 Name Location: License Number Summary Name Location: License Number Summary Order Date Action Order Date Action Name Location: License Number Summary Order Date Action Vanessa Marie Kobold Prescott, AZ Unlicensed Applicant As part of an original license application, applicant disclosed 2004 convictions for DUI and Reckless Endangerment August 18, 2006 2 year Provisional License with Practice Monitor; 2 year Body Fluid Testing, Sobriety Monitor and AA attendance William Larkin Tucson, AZ Unlicensed Individual Request for review or rehearing of July 5, 2006 Commissioner's Final Order, appeal denied August 11, 2006 Denial of license Randall Melancon Phoenix, AZ BR027240000 As part of an renewal license application in 2005, Petitioner disclosed 2004 misdemeanor convictions for Aggravated Assault and Criminal Damage. August 18, 2006 2 year Provisional License with Practice Monitor, $2,000 Civil Penalty, 6 hr CE in Commissioner's Standards Nicholas S. Olson Chandler, AZ Unlicensed Applicant Failed to appear for Formal Hearing. September 13, 2006 Denial of License Summary Suspensions Name Location: License Number Summary Dawn M. Callaway Scottsdale, AZ SA511039000 Respondent received adverse judgment involving real estate activity. Failed to respond to requests Page 20 DISCIPLINARY DECISIONS Summary Suspensions continued & A.S.A.s Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary for information. August 1, 2006 Summary Suspension of Salesperson's License Cynthia S. Ensman Phoenix, AZ SA548868000 Respondent convicted in May of 2006 of Attempted Fraudulent Schemes and Artifaces, a Class 3 Felony. Respondent place on 2 years probation. August 10, 2006 Summary Suspension of Salesperson's License Terry Darwin Garvey Glendale, AZ SA553365000 Respondent failed to disclose multiple misdemeanor convictions when applying for a license in August of 2004. Respondent failed to respond to Department requests for information. August 24, 2006 Summary Suspension of Salesperson's License Stacy Mae Lemmert Tucson, AZ SA554873000 Respondent failed to disclose October 2005 misdemeanor conviction, failed to respond to multiple requests for information. August 14, 2006 Summary Suspension of Salesperson's License Order Date Action By Consent Order (ASA) Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Roy F. Ross Tubac, AZ BR003548000 Conducted sales activity when broker's license had not been renewed. Failed to respond to requests for information. August 4, 2006 Summary Suspension of Broker's License, Cease and Desist all real estate activities. Order Date Action Ross Land, L.L.C. Tubac, AZ LC526999000 Conducted sales activity when broker's license had not been renewed. Failed to respond to requests for information. August 4, 2006 Summary Suspension of Broker's Entity License, Cease and Desist all real estate activities. Name Location: License Number Summary Frank Rocco Santore Cornville, AZ SA548942000 Respondent failed to disclose previous felony convictions in California when applying for a license in 2004. Failed to provide a current address to Department. Failed to respond to Department requests for information. June 27, 2006 Summary Suspension of Salesperson's License Casey Lee Weeks Gilbert, AZ SA554967000 Respondent failed to disclose previous probation and discharge from the military. Respondent failed to comply with Department requests for a V O L U ME 3 2 — I S SU E 4 5 OCTOBER / NOVEMBER 2006 statement and information about the probation and military discharge August 24, 2006 Summary Suspension of Salesperson's License Name Location: License Number Summary Order Date Action Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary 1st Arizona Realtors, Inc. Phoenix, AZ CO547502000 Conducted sales activities without an active license. July 6, 2006 $4,000 Civil Penalty Barbara L. Alvarado Scottsdale, AZ SA533393000 Conducted sales activities without an active license. July 26, 2006 $1,000 Civil Penalty Martin Chikuni Mesa, AZ SA516504000 Conducted sales activities without an active license. August 14, 2006 $1,000 Civil Penalty Christine M. Denney Mesa, AZ SA522228000 Failed to disclose, within 10 days, January 2005 misdemeanor conviction for Reckless Driving. August 11, 2006 $1,000 Civil Penalty Diversified Equity Corporation Tucson, AZ CO000976000 Conducted sales activities without an active license. August 28, 2006 $5,000 Civil Penalty Gary Finlinson Mesa, AZ BR043532000 Failed to properly supervise; allowing sales activities by an unlicensed person. August 3, 2006 $1,000 Civil Penalty Order Date Action Holly Fischer Scottsdale, AZ SA528018000 Advertisement did not include name of employing broker. August 2, 2006 $500 Civil Penalty Name Location: License Number Christian Fischer Scottsdale, AZ SA542494000 Page 21 DISCIPLINARY DECISIONS A.S.A.s continued & Cease and Desist Orders Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Advertisement did not include name of employing broker. August 2, 2006 $500 Civil Penalty Kimberly Kay Goyena Fountain Hills, AZ SA510019000 Failed to disclose, within 10 days, November 2004 misdemeanor conviction for DUI. August 23, 2006 $1,000 Civil Penalty R. Scott Green Scottsdale, AZ SA532752000 Conducted sales activities without an active license. July 26, 2006 $1,500 Civil Penalty Ira S. Kristol Scottsdale, AZ BR043830000 Failed to properly supervise; allowing sales activities by an unlicensed person. May 23, 2006 $1,000 to ADRE Education Fund Julie La Russa Scottsdale, AZ SA105840000 Failed to disclose, within 10 days, May 2005 misdemeanor conviction for DUI. August 17, 2006 $1,000 Civil Penalty Sasha M. Lee Avondale, AZ SA549892000 Failed to disclose, within 10 days, November 2004 misdemeanor conviction for Disorderly Conduct and Criminal Trespassing. August 16, 2006 $1,000 Civil Penalty Ronda L. McCulloch Phoenix, AZ SA518445000 Failed to disclose, within 10 days, February 2005 misdemeanor conviction for DUI. July 26, 2006 $1,000 Civil Penalty Stephanie D. Mount Phoenix, AZ BR526608000 Failed to properly supervise; allowing sales activities by an unlicensed person. August 7, 2006 $2,000 Civil Penalty Order Date Action Mount Lemmon Realty, Inc. Mt. Lemmon, AZ CO510418000 Conducted sales activities without an active license. August 7, 2006 $4,000 Civil Penalty Name Ryan E. Ottosen V O L U ME 3 2 — I S SU E 5 OCTOBER / NOVEMBER 2006 Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action Kingman, AZ SA568111000 Failed to disclose, within 10 days, December 2005 misdemeanor conviction for DUI. August 23, 2006 $1,000 Civil Penalty Michael P. Ragland Phoenix, AZ SA115490000 Failed to disclose, within 10 days, March 2006 misdemeanor conviction for DUI. August 8, 2006 $1,000 Civil Penalty Tony D. Werstler Scottsdale, AZ SA114160000 Failed to disclose, within 10 days, November 2005 misdemeanor conviction for DUI. August 10, 2006 $1,000 Civil Penalty Wockenfuss Family Business, LLC Gilbert, AZ LC551038000 Conducted sales activities without an active license. August 14, 2006 $2,000 Civil Penalty Marilyn Jean Zipprich Scottsdale, AZ BR108590000 Failed to properly supervise; allowing sales activities by an unlicensed person. July 27, 2006 $2,500 Civil Penalty By Cease and Desist Order Name Location: License Number Summary Order Date Action Name Location: License Number Summary Order Date Action I Buy Land, L.L.C. Scottsdale, AZ Unlicensed Entity Respondent conducting real estate sales activity in Arizona without a license. September 1, 2006 Cease and Desist all sales activities Share-Trader, Inc. Brandon, FL Unlicensed Entity Respondent conducting real estate sales activity in Arizona without a license. August 11, 2006 Cease and Desist all sales activities END OF DISCIPLINARY DECISIONS October / November 2006 Listings Page 22 Reminders Abbreviations Used In The Bulletin AAC Arizona Administrative Code (usually citing the Rules promulgated by the Arizona Department of Real Estate, often referred to as “The Commissioner’s Rules”) AAR Arizona Association of REALTORS ® ADRE Arizona Department of Real Estate AMC Arizona Mexico Commission ARS Arizona Revised Statutes ASA Accelerated Settlement Agreement CE Continuing Education ICRESON Instituto Catastral y de Servicios Registrales This is the agency within ADRE’s On-Line License Renewal System is Secure. Not only is it convenient and easy, the On-Line ADRE License Renewal System is a secure site that uses industry standards implemented by IBM that meet State of Arizona standards for securing and transferring personal information over the Internet. Payment and other screens handling sensitive information utilize encryption to keep your personal information safe. Go to: www.azre.gov and click on the “Online Licensing” link. the Government of the State of Sonora, Mexico that maintains the public registry (cadastral) of titles and deeds, and the voluntary registry of real estate agents working in Sonora. PC Professional Corporation PLLC Professional Limited Liability Corporation Check out the F.A.Q. (Frequently Asked Questions) link on the new ADRE web site ! License Renewal Is a Snap www.azre.gov see article on page 6. when you use the ADRE On-Line License Renewal System. go to: www.azre.gov and click on the “Online Licensing” link. VO L U ME 3 2 — I S S U E 5 OCTOBER / NOVEMBER 2006 Page 23 Arizona Department of Real Estate Main Office: Southern Arizona Office: 2910 North 44th Street, 1st Floor Phoenix, Arizona 85018 Phone: 602.468.1414 Fax: 602.468.0562 400 W. Congress, Suite 523 Tucson, Arizona 85701 Phone 520.628.6940 Fax 520.628.6941 web address: h t t p : / / w w w. a z r e . g o v 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 Communications Director Real Estate Advisory Board Gary Brasher, Chair Lisa A. Suarez, Vice-Chair R.L. Brown, Past Chair Vicki L. Cox-Golder Frank Dickens Thomas J. Pancrazi Vince Pellerito 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 for $10 payable to ADRE and note on your envelope: Attention: Bulletin Subscription. © 2006 ARIZONA DEPARTMENT OF REAL ESTATE. THE ARIZONA DEPARTMENT OF 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. ADRE is an EQUAL EMPLOYMENT OPPORTUNITY and REASONABLE ACCOMMODATION AGENCY. Page 24