Arizona Real Estate Broker Exam — All Questions

When must an Arizona broker's transaction records be available to the commissioner under A.R.S. 32-2151.01(A)?

• a.Only during a formal disciplinary proceeding
• b.Only after the Department issues a subpoena
• c.Only in the thirty days following a renewal
• d.At all reasonable times for the commissioner✓

A.R.S. 32-2151.01(A) requires each licensed employing broker to keep records of all transactions handled by or through the broker, plus employment records for current and former employees, and provides that 'the records shall be open at all reasonable times for inspection by the commissioner or the commissioner's representatives.' No subpoena and no pending case is needed; the open-records duty is a condition of holding the licence.

How long must an Arizona broker keep transaction and employment records under A.R.S. 32-2151.01(A)?

• a.At least two years after termination of the transaction or employment
• b.At least three years after termination of the transaction or employment
• c.At least ten years after termination of the transaction or employment
• d.At least five years after termination of the transaction or employment✓

A.R.S. 32-2151.01(A) provides that 'the records of each transaction and employment records shall be kept by the broker for a period of at least five years after the date of the termination of the transaction or employment.' They must be kept at the principal or licensed branch office in Arizona, or at an in-state off-site storage location the broker has notified to the Department in writing in advance. Rejected offers are the exception: subsection I requires one year, or five years where a binding contract resulted.

How long must an Arizona property management firm keep financial records pertaining to clients under A.R.S. 32-2175(C)?

• a.At least five years from the date each document was executed
• b.At least one year from the date each document was executed
• c.At least three years from the date each document was executed✓
• d.At least seven years from the date each document was executed

A.R.S. 32-2175(C) requires property management firms to keep all client financial records 'for at least three years from the date each document was executed,' listing bank statements, cancelled checks or bank generated check images, deposit slips, bank receipts, receipts and disbursement journals, owner statements, client ledgers and applicable bills, invoices and statements. Subsection B applies the same three-year period to records of finder fees paid to tenants.

How long must an Arizona property management firm keep a residential rental agreement under A.R.S. 32-2175(A)?

• a.One year after the rental agreement expires✓
• b.Until the tenant's security deposit is returned
• c.Three years after the rental agreement expires
• d.Five years after the rental agreement expires

A.R.S. 32-2175(A) requires property management firms to keep a residential rental agreement, including amendments and addenda and related documents, 'for one year after the expiration of the rental agreement or until the rental agreement and related documents are given to the owner at the termination of any property management agreement.' Related documents may include rental applications with tenant-identifying information, move-in forms and default notices.

What limits the scope of a routine Department audit of an Arizona property management broker under A.R.S. 32-2175(I)?

• a.Only trust account records, never lease documents
• b.Only the records the broker chooses to produce that day
• c.Areas that bear materially on the accuracy of the audit✓
• d.Only records created in the preceding twelve months

A.R.S. 32-2175(I) requires the broker, on request for routine audit purposes, to make available within a reasonable time all records relative to property management accounts, including lease agreements, lease related documents and trust account records. It then limits the Department 'to auditing those areas that are related to the business activities of a broker and that have a material bearing on the accuracy of the audit,' and closes by providing that the limit does not restrict the immediacy or scope of an audit if a violation is suspected.