Arizona Real Estate Broker Exam — All Questions

Under A.R.S. 32-2156, may a seller or licensee be sued for not disclosing that a homicide occurred in the property?

• a.Yes, if the buyer asked directly and was told nothing
• b.Yes, unless the seller obtained a written waiver from the buyer
• c.No, no criminal, civil or administrative action may be brought✓
• d.Yes, if the event occurred within the previous five years

A.R.S. 32-2156(A) provides that 'no criminal, civil or administrative action may be brought against a transferor or lessor of real property or a licensee for failing to disclose that the property being transferred or leased is or has been the site of a natural death, suicide or homicide or any other crime classified as a felony.' Subsection B adds that the non-disclosure is not grounds for terminating or rescinding the transaction. The protection is not limited by any lookback period.

Which other non-disclosures does A.R.S. 32-2156 protect in an Arizona transaction?

• a.An unpermitted addition and an expired building permit
• b.A pending assessment lien and unpaid association dues
• c.A leaking roof, a cracked slab and a failed water heater
• d.Occupancy by a person with HIV, and sex offenders nearby✓

A.R.S. 32-2156(A)(2) covers property 'owned or occupied by a person exposed to the human immunodeficiency virus or diagnosed as having the acquired immune deficiency syndrome or any other disease that is not known to be transmitted through common occupancy,' and (A)(3) covers property 'located in the vicinity of a sex offender.' Physical defects and financial encumbrances are the opposite case: those are material facts that A.A.C. R4-28-1101(B) requires a licensee to disclose in writing.

How long does a buyer have to rescind after receiving an affidavit of disclosure under A.R.S. 33-422?

• a.Five days after the affidavit is furnished✓
• b.Three days after the affidavit is furnished
• c.Seven days after the affidavit is furnished
• d.Ten days after the affidavit is furnished

A.R.S. 33-422(D) provides that 'the buyer has the right to rescind the sales transaction for a period of five days after the affidavit of disclosure is furnished to the buyer.' The affidavit itself must reach the buyer at least seven days before the transfer under subsection A, so the rescission window sits inside that period. Subsection B requires the affidavit to be written in twelve-point type.

Is a clause releasing the seller from liability for an error in an affidavit of disclosure effective?

• a.No, such a release or waiver does not bind the buyer✓
• b.Yes, if the buyer signs it separately from the contract
• c.Yes, if the buyer is represented by a licensed broker
• d.Yes, if the seller had no actual knowledge of the error

A.R.S. 33-422(C) states that 'a release or waiver of a seller's liability arising out of any omission or misrepresentation contained in an affidavit of disclosure is not valid or binding on the buyer.' The prohibition is absolute, so no separate signature, no lack of knowledge and no professional representation can make the waiver stick. The section's disclosures cover legal and physical access, road maintenance, utilities, flooding and similar rural risks.

A buyer purchases subdivided land that has no provision for permanent access. What does A.R.S. 32-2185.02 provide?

• a.The commissioner must revoke the subdivider's public report
• b.The sale is void and the deed conveys no interest at all
• c.The sale is rescindable by the purchaser for three years✓
• d.The subdivider must construct an access road within one year

A.R.S. 32-2185.02(A) forbids selling subdivided land 'without provision for permanent access to the land over terrain which may be traversed by conventional motor vehicle unless such provision is waived by the commissioner.' Subsection B makes any sale without permanent access 'rescindable by the purchaser,' with the action to be brought within three years of the date the purchaser executed the real estate sales contract. The remedy belongs to the buyer.

What civil penalty may the commissioner assess against an Arizona licensee under A.R.S. 32-2160.01?

• a.Up to one thousand dollars for each infraction, after a hearing✓
• b.Up to five thousand dollars for each infraction, after a hearing
• c.Up to five hundred dollars for each infraction, without a hearing
• d.Up to ten thousand dollars for each infraction, without a hearing

A.R.S. 32-2160.01(A) allows the commissioner, 'after a hearing,' to assess a civil penalty 'in an amount not to exceed one thousand dollars for each infraction' against a licensee who violated the chapter, a rule or an order, deviated substantially from a public report, or engaged in an unlawful practice defined in A.R.S. 44-1522 in the sale or lease of subdivided or unsubdivided lands. Unpaid penalties can be filed with the clerk of the superior court and enforced as a judgment.

Besides suspension and revocation, what may the commissioner do to a licensee under A.R.S. 32-2153(A)?

• a.Impose a criminal fine collected by the Department
• b.Issue a letter of concern or a provisional licence✓
• c.Order restitution directly to the aggrieved consumer
• d.Assign the licensee to a supervising broker for one year

A.R.S. 32-2153(A) lets the commissioner 'suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license' where the listed grounds appear within the preceding five years. The letter of concern and the provisional licence are the graduated responses short of suspension. Criminal fines are imposed by courts, and consumer compensation runs through the recovery fund under A.R.S. 32-2186.

What must an Arizona broker state in the purchase contract or earnest money receipt under A.R.S. 32-2151.01(C)?

• a.The broker's commission as a percentage of the price
• b.The name of the depository holding the earnest money
• c.The type of earnest money the broker actually received✓
• d.The date the earnest money will be released to the seller

A.R.S. 32-2151.01(C) requires a broker to 'specifically state in the real estate purchase contract, lease agreement or receipt for earnest money the type of earnest money received in any real estate transaction, whether it is cash, a check, a promissory note or any other item of value.' Because a note is not cash, the seller is entitled to know what actually backs the offer before accepting it. Subsection D requires licensees to place all such items promptly in the designated broker's care.