Arizona Real Estate Broker Exam — All Questions

What must an Arizona employing broker and designated broker put in place under A.A.C. R4-28-1103(A)?

• a.An errors and omissions policy for each licensee
• b.Written policies for reviewing all transactions✓
• c.A quarterly audit performed by an outside accountant
• d.A surety bond covering all licensees in the firm

A.A.C. R4-28-1103(A) defines reasonable supervision and control to include 'the establishment and enforcement of written policies, procedures, and systems' to review and manage transactions, disclosure forms and contracts, document filing and storage, handling of trust funds, use of unlicensed assistants and advertising, and to review and inspect documents and licensee advertising. No bond, outside audit or errors and omissions policy is imposed by the rule.

Which small brokerage is excused from maintaining the written policies required by A.A.C. R4-28-1103(A)?

• a.Any brokerage that has never been disciplined by the Department
• b.Any brokerage whose gross commissions are under $250,000
• c.One office with a designated broker and up to five licensees
• d.One office with a designated broker, one licensee and one assistant✓

A.A.C. R4-28-1103(G) provides that if an employing broker 'maintains one office and employs a designated broker, no more than one other licensed person, and no more than one unlicensed person, the employing broker and designated broker are not required to develop and maintain written policies, procedures, and systems as described in subsection (A).' The exemption is drawn by headcount and office count, not by revenue or disciplinary history, and it does not relieve the broker of the duty to supervise.

A designated broker learns that a supervised licensee has violated a real estate statute. What does A.A.C. R4-28-1103(F) provide?

• a.The broker must suspend the licensee pending a Department hearing
• b.The broker must terminate the licensee within ten business days
• c.The broker becomes jointly liable for any civil penalty imposed
• d.Immediate reporting to the Department shields the broker from that charge✓

A.A.C. R4-28-1103(F) states that a designated broker who, on learning of a violation of real estate statutes or rules by a supervised licensee, 'immediately reports the violation to the Department is not subject to disciplinary action by the Department for failure to supervise the licensee.' The protection is specific: it covers the supervision charge, and it is earned by reporting immediately. Subsection D still makes the employing broker responsible for the acts of licensees within the scope of their employment.

Under A.A.C. R4-28-502(B), what must a licensee who advertises property the licensee owns include in the advertisement?

• a.The licence number of the salesperson
• b.The words 'owner/agent' in the advert✓
• c.The words 'for sale by owner'
• d.The name of the escrow company used

A.A.C. R4-28-502(B) requires any licensee advertising their own or another licensee's property for sale, lease or exchange in Arizona to disclose that they are licensed as a salesperson or broker, and as the property owner, 'by placing the words "owner/agent" in the advertisement.' Subsection A separately forbids advertising property in a way that implies no salesperson or broker is taking part in the offer, which is what a bare 'for sale by owner' line would do.

What must appear in a clear and prominent manner in every Arizona licensee's advertising under A.A.C. R4-28-502(E)?

• a.The employing broker's legal name or the licensed d.b.a. name✓
• b.The licensee's own name and mobile telephone number
• c.The Department of Real Estate complaint telephone number
• d.The address of the office where the listing is held

A.A.C. R4-28-502(E) requires a licensee to ensure that all advertising 'identifies in a clear and prominent manner the employing broker's legal name or the d.b.a. name or names contained on the employing broker's license certificate.' Subsection G puts the accountability with the designated broker, who 'is responsible for the advertising of all real estate activity.' The rule is about identifying the firm behind the advertisement, not the individual licensee's contact details.

When may an Arizona licensee use the word 'acre' in advertising under A.A.C. R4-28-502(H)?

• a.Only for an area of at least 40,000 square feet
• b.Only for an area of at least 43,560 square feet✓
• c.Only for an area shown on a recorded plat
• d.Only for an area of at least one hectare

A.A.C. R4-28-502(H) provides that 'a licensee shall not use the term "acre," either alone or modified, unless referring to an area of land representing at least 43,560 square feet.' That figure is the statutory acre and is one of the values the Pearson VUE handbook tells Arizona candidates to memorise for the examination, since it is not supplied at the test centre. A modified form such as 'ranch acre' is caught by the same rule.

Before placing a for-sale sign on a property, what does A.A.C. R4-28-502(I) require an Arizona licensee to obtain?

• a.The oral consent of the property owner
• b.The written consent of the property owner✓
• c.A sign permit from the local jurisdiction
• d.The written consent of the homeowners association

A.A.C. R4-28-502(I) requires that 'before placing a sign or publishing to an electronic medium giving notice that specific property is being offered for sale, lease, rent, or exchange, a licensee shall secure the written consent of the property owner,' and that the sign or publication 'shall be promptly removed upon request of the property owner.' The same written-consent requirement covers online listings, not just physical signs.

How does A.A.C. R4-28-503(A) restrict the way a licensee describes a promotional premium?

• a.It may not be worth more than one hundred dollars
• b.It may not be offered outside a licensed office
• c.It may not be described as an award or a prize✓
• d.It may not be advertised in a printed newspaper

A.A.C. R4-28-503(A) provides that 'a licensee shall not describe a premium offered at no cost or reduced cost to promote sales or leasing as an "award," or "prize," or use a similar term.' Subsection B requires the terms, costs, conditions, restrictions and expiration date of a premium offer to be disclosed to the person in writing before they take part. Subsection C bars soliciting or selling an interest in a development by lottery, contest, drawing or game of chance unless otherwise provided by law.

Under A.A.C. R4-28-701, when must an Arizona broker disclose the employing brokers who will be compensated from a transaction?

• a.In writing, three calendar days before the closing✓
• b.Orally at the time the purchase contract is signed
• c.In writing within three calendar days after closing
• d.In writing at least ten calendar days before closing

A.A.C. R4-28-701 requires a real estate broker to disclose 'to all the parties in a transaction, in writing at least three calendar days before closing, the name of each employing broker who represents a party to the transaction and who will receive compensation from the transaction.' The rule was amended effective December 13, 2025. The disclosure is about who is being paid out of the deal, and it must land before closing, not after.

What is the minimum number of continuing education hours an Arizona licensee must take in each mandatory category?

• a.Two full hours
• b.Six hours
• c.Three hours✓
• d.Four hours

A.A.C. R4-28-402(A)(2) requires a renewing salesperson or associate broker to 'complete a minimum of three hours in each of the mandatory categories under subsections (A)(5)(a) through (A)(5)(h),' then to make up the balance of the twenty-four hours from those categories or from business brokerage or general real estate. The mandatory categories are agency law, contract law, requirements for licensees, real estate legal issues, fair housing and the Americans with Disabilities Act, disclosure, and the two catch-all categories.

Which of these is a listed mandatory continuing education category under A.A.C. R4-28-402(A)(5)?

• a.Mortgage loan origination and underwriting
• b.Residential construction and building inspection
• c.Commercial appraisal and highest and best use
• d.Fair housing and the Americans with Disabilities Act✓

A.A.C. R4-28-402(A)(5) lists the categories for Arizona real estate continuing education, and subsection (A)(5)(e) is 'Fair housing and Americans with Disabilities Act,' covering equal opportunity, ADA architectural design, Arizona civil rights laws and federal fair housing laws, deed restrictions, affordable and elder housing, and administrative procedures and disparate impact. Construction inspection, loan underwriting and commercial appraisal are not named as categories in the rule.

Under A.A.C. R4-28-401(A), which part of Arizona prelicensure education can never be waived?

• a.The six-hour contract writing class for salespersons
• b.The nine-hour broker management clinic requirement
• c.The twenty-seven-hour Arizona-specific prelicensure course✓
• d.The thirty-hour agency and contract law segment

A.A.C. R4-28-401(A)(2) lets an applicant 'apply for and be granted a waiver of the prelicensure courses' with one carve-out: 'except for the 27-hour Arizona-specific course.' A.R.S. 32-2124(B) and (C) say the same thing for salesperson and broker applicants who hold a current licence in another state. Arizona will credit outside education and experience, but it will not excuse anyone from the block of instruction on Arizona law and practice.

How does A.R.S. 32-2101 define a 'designated broker' in Arizona?

• a.Any licensed broker the employing entity has hired
• b.The broker who listed the property in a transaction
• c.A licensed broker designated to act for the employing entity✓
• d.A licensed salesperson delegated to run an office

A.R.S. 32-2101 defines a designated broker as a natural person licensed as a broker under the chapter who is either 'designated to act on behalf of an employing real estate, cemetery or membership camping entity' or 'doing business as a sole proprietor.' The office is personal to that individual, and A.R.S. 32-2125(A) confirms that the entity licence 'shall extend no authority to act as designated broker to any other person.' A salesperson cannot hold the role.

Under A.R.S. 32-2155, from whom may an Arizona salesperson accept compensation for licensed activity?

• a.Any broker who cooperated in the transaction
• b.The escrow company handling the closing
• c.The broker to whom the licensee is licensed✓
• d.The seller directly, if the contract says so

A.R.S. 32-2155(A) provides that a broker shall employ and pay only active licensees, and that a licensee shall accept employment and compensation only from 'the legally licensed broker to whom the licensee is licensed,' or from a narrow second route requiring that the payer hold a licence, that the licensee be its W-2 employee, that both share the same employing broker, and that the employing broker give written permission. Subsection C makes it unlawful for an escrow holder or anyone else to pay compensation for licensed acts outside those channels.

Which conduct is a listed ground for suspension or revocation under A.R.S. 32-2153(A)?

• a.Refusing to present an offer the client considers too low
• b.Advertising a property in a competing broker's market area
• c.Charging a commission rate above the local average
• d.Acting for more than one party without the written consent of all✓

A.R.S. 32-2153(A)(2) lists having 'acted for more than one party in a transaction without the knowledge or written consent of all parties to the transaction' among the grounds on which the commissioner may deny, suspend or revoke a licence. Other listed grounds include a course of misrepresentation, violating any provision of the chapter or the rules, and employing an unlicensed salesperson or associate broker. Commission rates are negotiable and are not fixed by the chapter.

Who may bring an action to collect a real estate commission under A.R.S. 32-2152?

• a.Any person holding a written referral agreement
• b.Any party named in the purchase contract
• c.A person licensed when the services were done✓
• d.Any person who introduced the buyer to the seller

A.R.S. 32-2152 bars an action for compensation for real estate services unless the plaintiff pleads and proves they were a licensed broker or salesperson at the time the claim arose. The rule closes the courthouse door on unlicensed finders, however genuine their introduction. It works with A.R.S. 32-2155, which controls who may lawfully be paid, and with A.R.S. 44-101(7), which requires the employment agreement itself to be in writing.

Under A.A.C. R4-28-1101(I), what care must an Arizona licensee take with information relevant to the transaction?

• a.A duty owed only after a purchase contract is signed
• b.Absolute accuracy, with strict liability for any error
• c.Reasonable care to obtain the information and report it accurately✓
• d.No duty beyond repeating what the seller has stated

A.A.C. R4-28-1101(I) requires a licensee to 'exercise reasonable care in ensuring that the licensee obtains information material to a client's interests and relevant to the contemplated transaction and accurately communicates the information to the client,' and to take reasonable steps to help the client confirm its accuracy. The standard is reasonable care, not a guarantee, and it attaches to the agency relationship rather than to the signing of a contract.

What does A.A.C. R4-28-1101(C) require of a licensee who cannot perform an act the licence requires?

• a.Immediate termination of the employment agreement
• b.A written report to the Department within ten days
• c.Prompt notice to the licensee's own designated broker✓
• d.Referral of the client to another brokerage firm

A.A.C. R4-28-1101(C) requires a licensee to perform all acts required by holding the licence expeditiously and forbids delay 'either intentionally or through neglect.' It then provides that if a licensee is unable to perform any act required by rule or statute, 'they must expeditiously notify their designated broker of their inability to perform.' The report goes up the chain inside the firm, so the designated broker can cover the duty.

Under A.A.C. R4-28-1101(D), how must a licensee handle a controversy with another licensee?

• a.It suspends both licensees' duties until it is settled
• b.It must be submitted to the Department for mediation
• c.It may not be allowed to delay or interfere with the client's transaction✓
• d.It must be resolved before either licensee may act further

A.A.C. R4-28-1101(D) provides that a licensee 'shall not allow a controversy with another licensee to jeopardize, delay, or interfere with the initiation, processing, or finalizing of a transaction on behalf of a client.' The rule adds that this does not oblige a licensee to alter an employment or compensation agreement or to give up the right to sue over the dispute. The client's deal proceeds; the quarrel is settled separately.

What must every Arizona real estate employment agreement contain under A.R.S. 32-2151.02(A)?

• a.A definite duration, showing inception and expiration✓
• b.A clause naming the escrow agent for the transaction
• c.A minimum commission fixed by the employing broker
• d.An automatic renewal clause running month to month

A.R.S. 32-2151.02(A) requires all real estate employment agreements to be written in clear and unambiguous language, to fully set forth all material terms including the terms of broker compensation, to 'have a definite duration or expiration date, showing dates of inception and expiration,' and to be signed by all parties. Automatic renewal is not required and is not mentioned; commission terms must be stated, not set at a minimum by anyone.

May an Arizona employing broker assign a real estate employment agreement to another broker?

• a.Yes, whenever the brokerage is sold as a going concern
• b.No, an assignment is prohibited in every circumstance
• c.Yes, on written notice to the client after the assignment
• d.Only with the express written consent of all the parties✓

A.R.S. 32-2151.02(B) provides that 'an employing broker shall not assign a real estate employment agreement to another broker without the express written consent of all parties to the agreement at the time of the assignment.' Consent must come from all parties and must exist at the time of the assignment, so notice given afterwards will not do. A sale of the firm does not create an exception.

A seller is already under an exclusive listing. What does A.R.S. 32-2151.02(C) require of a licensee who seeks a second agreement?

• a.Written release of the first agreement from the other broker
• b.A ninety-day waiting period after the first agreement ends
• c.Approval of the second agreement by the Department
• d.Written acknowledgment from the party of exposure to extra commissions✓

A.R.S. 32-2151.02(C) forbids a licensee from procuring or attempting to procure an employment agreement from a party already subject to an existing exclusive real estate employment agreement 'unless the licensee has received written acknowledgment from the party that the execution of additional real estate employment agreements could expose the party to liability for substantial additional commissions.' The subsection expressly preserves any civil liability the licensee may incur from the conduct.

Is a written employment agreement required before an Arizona licensee may represent a party in a transaction?

• a.Yes, unless the client waives it in writing
• b.Yes, in every transaction without exception
• c.Yes, except in commercial lease transactions
• d.No, representation may exist without one✓

A.R.S. 32-2151.02(D) states that 'a real estate employment agreement is not required for a licensee to represent a party in a transaction.' What the agreement does is entitle the broker to compensation: subsection E defines it as the written agreement by which a broker is entitled to compensation under A.R.S. 44-101, paragraph 7. Representation and the right to be paid are separate questions, and only the second one turns on the writing.

Where must an Arizona designated broker's licence certificate be kept under A.R.S. 32-2128(A)?

• a.Prominently displayed in the office of that broker✓
• b.Posted on the brokerage's public-facing website
• c.Filed with the county recorder in the broker's county
• d.Carried on the designated broker's person at all times

A.R.S. 32-2128(A) requires the designated broker's and, where applicable, the employing broker's licence certificate to be 'prominently displayed in the office of the broker,' with all other licence certificates 'readily available.' A salesperson's or associate broker's certificate stays in the employer's possession until it is cancelled, terminated, suspended, revoked, or the licensee is severed. Subsection B lets the broker satisfy the possession rule using the Department's public database record.

A designated broker will be unable to act for two weeks. What does A.R.S. 32-2127(D) permit?

• a.A written designation of another licensee, not exceeding thirty days✓
• b.A written designation of another licensee for up to one year
• c.Closure of the office until the designated broker returns
• d.An oral designation confirmed at the next office meeting

A.R.S. 32-2127(D) lets a designated broker who is unable to act within twenty-four hours designate an employed licensee or another designated broker to act on their behalf. The designation must be in writing, the original must be kept at the office for one year from its effective date, a copy must be attached to any hire, sever or renewal form signed by the designee, and the designation 'shall not exceed thirty days' duration.'

An Arizona employing broker abandons the business location without notifying the commissioner. What happens under A.R.S. 32-2126(A)?

• a.The licence continues until its next scheduled renewal
• b.The employing broker's licence is cancelled and its licensees severed✓
• c.The commissioner issues a letter of concern to the broker
• d.The licence is suspended for thirty days pending a hearing

A.R.S. 32-2126(A) requires each employing broker to maintain a definite place of business or an active statutory agent on file with the corporation commission, and to notify the commissioner in writing of any change. It then provides that 'change or abandonment of a business location or statutory agent without notice shall automatically cancel the employing broker's license and shall sever the license of any salesperson or associate broker employed by the employing broker.' If the licence is later reinstated, those licensees may be rehired.

Which agreements must be in writing to be enforceable under Arizona's statute of frauds, A.R.S. 44-101(6)?

• a.A sale of real property or a lease for longer than one month
• b.A sale of real property or a lease for longer than one year✓
• c.Any lease of real property regardless of its stated term
• d.Any agreement affecting real property worth over $500

A.R.S. 44-101(6) bars an action 'upon an agreement for leasing for a longer period than one year, or for the sale of real property or an interest therein' unless the agreement or a memorandum of it is in writing and signed by the party to be charged. The same paragraph adds that where the agreement is made by an agent, it is invalid unless the agent's authority is itself in writing. A lease of a year or less falls outside the paragraph.

Under A.R.S. 44-101(7), what must be in writing before a broker can sue for a commission?

• a.The listing broker's advertisement of the property
• b.The buyer's written offer to purchase the property
• c.The closing statement showing the commission split
• d.The agreement employing the broker to buy or sell✓

A.R.S. 44-101(7) places within the statute of frauds any action 'upon an agreement authorizing or employing an agent or broker to purchase or sell real property, or mines, for compensation or a commission.' A.R.S. 32-2151.02(E) then defines a real estate employment agreement by reference to that paragraph. Together they mean a broker who wants to be paid needs a signed written employment agreement, whatever else the file contains.

Which element is required for a valid real estate contract in Arizona?

• a.Acknowledgment before a notary public
• b.Approval by a licensed real estate broker
• c.Recording in the county where the land lies
• d.Consideration bargained for by the parties✓

A contract to buy or sell Arizona real property needs offer and acceptance, legally competent parties, a lawful object, consideration and, under A.R.S. 44-101(6), a signed writing. Notarisation and recording are requirements for the deed rather than the contract: A.R.S. 33-401(B) requires a deed to be signed and acknowledged, and A.R.S. 33-411 governs the effect of recording. A broker's involvement is not an element of contract validity at all.

What formal requirements does A.R.S. 33-401 place on a conveyance of a freehold estate in Arizona?

• a.An oral transfer followed by the grantee taking possession
• b.A written instrument prepared only by a licensed attorney
• c.A written instrument witnessed by two disinterested persons
• d.A signed written instrument, delivered and duly acknowledged by an officer✓

A.R.S. 33-401(A) provides that no estate of inheritance, freehold, or for a term of more than one year shall be conveyed 'unless the conveyance is by an instrument in writing, subscribed and delivered by the party disposing of the estate,' or by an agent authorised in writing. Subsection B requires every deed to be signed by the grantor and 'duly acknowledged before some officer authorized to take acknowledgments.' Witnesses are not required, and Article XXVI lets a licensee prepare the instrument.

What is the defining feature of an option to purchase real property?

• a.The optionor may withdraw the offer at any time
• b.The optionee may buy but is not obliged to buy✓
• c.The price is fixed by appraisal at the time of exercise
• d.Both parties are obliged to complete the purchase

An option is a unilateral contract: the optionor is bound to keep the offer open for the option period, while the optionee holds a right to buy and no duty to do so. Consideration paid for the option is what makes the optionor's promise binding, so the optionor cannot simply withdraw. Price is whatever the option states; it is not set by later appraisal unless the option says so.

How does a right of first refusal differ from an option to purchase?

• a.It gives the holder title without any further act
• b.It may be exercised only after the owner's death
• c.It obliges the owner to sell within a fixed period
• d.It is triggered only when the owner decides to sell✓

A right of first refusal is a pre-emptive right: the holder gets the chance to buy on stated terms only if and when the owner decides to sell or receives an offer the owner is willing to take. An option, by contrast, lets the holder force a sale during the option period whether the owner wants to sell or not. The right of first refusal transfers no title and is not tied to the owner's death.

A buyer makes an offer and the seller returns it with a changed closing date. In contract terms, what has the seller done?

• a.Created a binding contract on the buyer's terms
• b.Rejected the offer and made a counteroffer✓
• c.Accepted the offer subject to a minor variation
• d.Suspended the offer until the buyer responds

An acceptance must mirror the offer. A response that changes any term operates as a rejection of the original offer and a new offer back to the first party, who is then free to accept, reject or counter again. Because the original offer is extinguished, the buyer cannot later revive it by purporting to accept; the seller would have to renew it.

What is the effect of a valid liquidated damages clause in an Arizona purchase contract?

• a.It allows either party to cancel without any liability
• b.It fixes in advance the sum payable for a specified breach✓
• c.It requires the parties to submit the dispute to arbitration
• d.It bars the seller from keeping the earnest money

A liquidated damages clause sets, at the time of contracting, the amount recoverable if a specified breach occurs, so the parties avoid proving actual loss later. Courts enforce such a clause where the anticipated loss was difficult to estimate and the sum is a reasonable forecast rather than a penalty. It does not displace arbitration provisions, and it is not a licence to walk away free.

A buyer assigns a purchase contract to a third party. What is the general effect on the original buyer?

• a.The original buyer becomes a guarantor for one year only
• b.The original buyer is discharged the moment of assignment
• c.The original buyer remains liable unless the seller grants a release✓
• d.The assignment is void unless recorded with the county

Assignment transfers the assignor's rights under the contract, but it does not by itself transfer away the assignor's duties. Absent a novation, in which the seller agrees to substitute the assignee and release the assignor, the original buyer stays on the hook if the assignee fails to perform. Contracts commonly restrict or bar assignment; recording is not a condition of validity.

Which contract is voidable rather than void in Arizona?

• a.One whose stated purpose is an unlawful act
• b.One signed by a minor for the purchase of a home✓
• c.One that lacks any consideration whatsoever
• d.One signed by a person the court has adjudicated incompetent

A voidable contract is valid until the protected party elects to disaffirm it, and a minor's contract is the classic example: the minor may disaffirm, while the adult party cannot. A contract for an unlawful purpose is void from the outset, as is a contract signed by someone already adjudicated incompetent, because no capacity existed. A promise wholly without consideration never forms a contract at all.

What does A.R.S. 33-431(A) presume when Arizona land is granted to two or more persons?

• a.Community property with right of survivorship
• b.An estate in common, without survivorship✓
• c.A tenancy by the entirety
• d.A joint tenancy with right of survivorship

A.R.S. 33-431(A) provides that, with stated exceptions, 'all grants and devises of real property made to two or more persons create estates in common and not in joint tenancy,' excepting grants in trust, to executors, and to husband and wife. Survivorship is therefore never assumed: subsection B requires express words declaring a joint tenancy with right of survivorship, and subsection C requires express words for community property with right of survivorship.

How is a joint tenancy with right of survivorship created in Arizona under A.R.S. 33-431(B)?

• a.By express words declaring it in the grant or devise✓
• b.By the grantees taking title at the same moment
• c.By recording an affidavit of survivorship after closing
• d.By the grantees holding equal shares in the property

A.R.S. 33-431(B) allows a grant or devise to two or more persons to vest the estate in the survivor 'when expressly declared in the grant, transfer or devise to be a joint tenancy with right of survivorship,' and permits creation by transfer from a sole owner to himself and others. The declaration in the instrument is what does the work. An affidavit recorded after a death evidences the survivorship; it does not create it.

How does A.R.S. 33-432 treat a grant that does not use the common-law words of inheritance?

• a.It is deemed to convey a life estate to the grantee
• b.It is void for failing to identify the estate conveyed
• c.It is deemed to convey a fee simple unless limited✓
• d.It is deemed to convey only the grantor's possessory right

A.R.S. 33-432(A) provides that every estate in lands granted, conveyed or devised 'shall be deemed a fee simple if a lesser estate is not limited by express words or does not appear to have been granted, conveyed or devised by construction or operation of law.' Arizona therefore presumes the largest estate the grantor could pass. Cutting it down to a life estate or a lesser interest takes express language.

What covenants does A.R.S. 33-435 imply when a deed uses the word 'grant' or 'convey'?

• a.No covenants at all, since Arizona uses only quitclaim deeds
• b.Covenants that the property is fit for residential occupancy
• c.Covenants warranting title against all persons whomsoever
• d.Covenants against the grantor's own prior conveyances and encumbrances✓

A.R.S. 33-435(A) provides that where 'grant' or 'convey' is used in a conveyance passing a fee, certain covenants 'and none other' are implied unless restrained by express terms: in substance, that the grantor has not previously conveyed the same estate or an interest in it to anyone else, and that the estate is free from encumbrances made or suffered by the grantor. These are limited, grantor-specific promises, not a general warranty against all claimants.

What distinguishes an appurtenant easement from an easement in gross?

• a.It benefits a parcel of land and passes with that land✓
• b.It benefits a person and expires on that person's death
• c.It may be used only by the servient estate's owner
• d.It may be created only by an express written grant

An appurtenant easement attaches to a dominant parcel and runs with the land, so it passes to later owners without being mentioned in each deed. An easement in gross benefits a person or entity rather than a parcel; utility easements are the common commercial example, and commercial easements in gross are generally transferable rather than automatically ending at death. Either type may arise by grant, reservation, prescription or necessity.

Which interest is real property rather than personal property?

• a.A tenant's trade fixtures removable at lease end
• b.A promissory note secured by a deed of trust
• c.Shares in a corporation that owns an apartment tower
• d.A fee simple interest in land and buildings✓

Real property is land, everything permanently attached to it and the bundle of rights in it, so a fee simple in land and improvements is real property. Trade fixtures remain the tenant's personalty and may be removed at the end of the term. Cooperative shares are personal property, even though they carry occupancy rights. A promissory note is a chose in action; the deed of trust securing it is the interest in land.

What is the essential difference between a condominium and a cooperative?

• a.Neither owner holds any interest in the common elements
• b.A condominium owner holds real property; a cooperative member holds shares✓
• c.A condominium owner holds shares; a cooperative member holds title
• d.Both owners hold identical fee title to their individual units

In a condominium the buyer takes fee title to the unit together with an undivided interest in the common elements, which is real property under Title 33, Chapter 9. In a cooperative the corporation owns the building and the resident holds stock plus a proprietary lease, which is personal property. A.R.S. 32-2101 confirms the split by treating stock cooperatives as subdivisions while defining residential condominiums separately.

Which body of Arizona law governs a planned community's homeowners association?

• a.Title 32, Chapter 20 of the Arizona Revised Statutes
• b.Title 33, Chapter 16 of the Arizona Revised Statutes✓
• c.Title 41, Chapter 9 of the Arizona Revised Statutes
• d.Title 10, Chapter 24 of the Arizona Revised Statutes

Arizona's Planned Communities Act sits at Title 33, Chapter 16, beginning at A.R.S. 33-1801, and it governs associations of owners in planned communities, including the resale disclosure duties in A.R.S. 33-1806. Condominiums are covered separately by the Condominium Act in Title 33, Chapter 9. Title 32, Chapter 20 regulates licensees, not associations.

A landlord conveys a fee simple 'so long as the land is used as a public library.' What estate has the grantee received?

• a.A fee simple determinable, ending automatically✓
• b.A leasehold estate for a fixed term of years
• c.A tenancy in common with the grantor
• d.A life estate measured by the grantor's life

Words of duration such as 'so long as,' 'while' or 'during' create a fee simple determinable, which ends automatically if the stated use ceases, leaving a possibility of reverter in the grantor. A condition subsequent, signalled by wording such as 'but if,' instead gives the grantor a right of entry that must be exercised. A life estate is measured by a life, and a leasehold is not a fee at all.

What interest does a tenant hold under a lease of Arizona real property?

• a.An undivided fractional fee interest in the property
• b.A lien against the landlord's title for the rent paid
• c.A leasehold estate, a possessory interest that is less than freehold✓
• d.A freehold estate for the duration of the lease term

A lease conveys a leasehold, a possessory estate that entitles the tenant to exclusive use for the term while the landlord retains the reversion. Leaseholds are estates less than freehold and are classified as chattels real. A tenant acquires no fractional fee, and paying rent creates no lien on the landlord's title.

Which government power is exercised when Arizona takes private land for a public use and pays compensation?

• a.Taxation
• b.The police power
• c.Eminent domain✓
• d.Escheat

Eminent domain is the power to take private property for public use on payment of just compensation, and A.R.S. 12-1111 lists the uses for which it may be exercised in Arizona, including public buildings, roads, canals and utility lines. Police power regulates use without compensating, escheat passes property to the state when an owner dies without heirs or claimants, and taxation raises revenue. Only eminent domain both takes title and pays for it.

Which of these is an exercise of the police power rather than a taking?

• a.A utility easement acquired by court order
• b.A zoning ordinance capping building height✓
• c.A condemnation of a parcel for a new school site
• d.A road widening that removes ten feet of a front yard

The police power lets government regulate the use of land to protect health, safety, morals and general welfare, and zoning is its central application; no compensation is owed for a valid regulation. The other three are acquisitions of property interests by condemnation, which require just compensation. The line between a regulation and a regulatory taking turns on how far the restriction goes.

When do Arizona real property taxes become delinquent under A.R.S. 42-18052?

• a.First half after November 1, second half after May 1✓
• b.The whole amount after December 31 in every case
• c.The first half after October 1 and the second half after March 1
• d.The first half after December 1 and the second half after June 1

A.R.S. 42-18052(A) makes one half of the tax due and payable on October 1 and the other half on the following March 1. Subsection B then provides that the unpaid first half 'is delinquent after November 1 at 5:00 p.m.' and the unpaid second half 'is delinquent after the following May 1 at 5:00 p.m.' Subsection C is the exception: where the whole tax is $100 or less it is all due October 1 and delinquent after December 31.

What interest do delinquent Arizona property taxes bear under A.R.S. 42-18053?

• a.Eighteen percent per year, compounded annually
• b.Twelve percent per year, simple
• c.Ten percent per year, compounded monthly
• d.Sixteen percent per year, simple✓

A.R.S. 42-18053(A) provides that all taxes bear interest from the time of delinquency 'at the rate of sixteen percent per year simple until paid,' counting a fraction of a month as a whole month. Subsection B removes the interest where the delinquency was caused by an error of the county assessor or treasurer, or where the full year's tax is paid on or before December 31 of the tax year.