Phone: Fax:
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The Short Sale Seller Advisory is a Resource
A short sale is a real estate transaction in which the sales price is insufficient to pay the loan(s) encumbering the
BEFORE PROCEEDING WITH A SHORT SALE
UNDERSTAND A LENDER’S OPTIONS UPON LOAN
There are many types of loans that are secured by real property.
https://www.aaronline.com/2009/09/loan-defaults-deficiencies/
Provided by the Arizona Association of REALTORS®
property in addition to the costs of sale and the seller is unable to pay the difference. A short sale involves numerous
issues as well as legal and financial risks. This Advisory is designed to address some of these issues and risks, but does
not purport to be comprehensive.
1.
DEFAULT
These may be purchase loans, refinanced loans, home-equity
loans, or one of the various other types of loans. The type of loan
and type of property will determine what remedies a lender may
have if the homeowner fails to make the agreed upon payments.
The available remedies, the homeowner’s overall current or
potential future financial strength, the lender’s cost in acquiring
the loan and any shared-loss or similar agreement if the loan was
acquired by purchase or merger, are some of the many factors
that the lender may consider in deciding how to proceed when a
loan is in default. For an overview of these issues, go to
http://1.usa.gov/1RczXBN
2. BE AWARE OF PREDATORY “RESCUE” SCAMS & SHORT
SALE FRAUD
Homeowners worried about foreclosure may be susceptible to
predatory “rescue” scams which may cost you money with no
results, result in the loss of your home entirely, or involve you in a
fraudulent scheme. For more information, go to:
http://bit.ly/1Ogg1Ib or http://bit.ly/21MB8vF
Red Flags” of fraudulent schemes include:
• Guarantees to stop the foreclosure
• Large upfront fees
• Instructions not to contact the lender
• Transfer of title or lease of the property
• The proposed buyer is an LLC
• Requests that the homeowner execute a power of
attorney
The proposed buyer, at the buyer’s sole expense,•
retains a third party to negotiate the short sale
for the seller’s benefit.
3. REPORT SUSPECTED SCAMS
• Financial Fraud Enforcement Task Force
www.stopfraud.gov/
• HUD, in partnership with the Loan Modification Scam
Prevention Network www.preventloanscams.org/
• Arizona Department of Financial Institutions at
http://azdfi.gov/ or email [email protected]
• Arizona Attorney General’s Office
http://bit.ly/1XWEKf2
Page | 1 of 6 Arizona Department of Real Estate Short Sale Seller Advisory (March 2016)Garden Brook Realty, 520 W Sheldon Street Suite 2A Prescott, AZ 86301
Diann Dede Erceg928-710-0020 Advisory 928-227-2654
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BEFORE PROCEEDING WITH A SHORT SALE(CONTINUED)
4. CONTACT A FREE HUD-APPROVED HOUSING COUNSELOR
OR CONTACT YOUR LENDER DIRECTLY
Contact a HUD-approved housing counseling agency online or call
(800) 569-4287 or TDD (800) 877-8339 for advice on your options.
For additional HUD resources, go to:
http://1.usa.gov/1rG3J4N , http://1.usa.gov/1RGTrxD or
http://1.usa.gov/YDHdxS
• Contact the Neighborhood Assistance Corporation of
America at
https://www.naca.com/home-save/
• Contact the lender directly. To find the lender’s contact
information, check the loan billing statement, or coupon
book. Ask for the lender's home retention department,
loss mitigation department, (or other department that
handles negotiation of loans in default); explain the
situation and find out if the lender is willing to discuss
options.
5. UTILIZE FREE SERVICES AVAILABLE TO ARIZONA
RESIDENTS
• Contact the Arizona Foreclosure Helpline at 1-877-448-
1211 or visit
http://bit.ly/1GIVQls
• Review the Arizona Foreclosure Prevention Task Force
Workbook. This book will help you evaluate your options
and provide you with tools to take action.
• Arizona Department of Housing
www.azhousing.gov/
6. OBTAIN LEGAL ADVICE
An attorney can advise you about your options and legal liability.
• To find out if you are eligible for free or low cost legal
assistance, contact a legal aid organization in your county
or one of the organizations listed at
http://bit.ly/1lUlg9q
www.azlawhelp.org/housing.cfm
Page | 2 of 6 Arizona Department of Real Estate Short Sale Seller Advisory (March 2016)
• Contact the Lawyer Referral Service in your county where
you can consult with an attorney for a small fee for a half-
hour consultation.
Maricopa County:
http://maricopalawyers.org/ or (602) 257-4434.
Pima County:
http://www.pimacountybar.org/ or (520) 623-4625
• Attorneys who are State Bar Real Estate Law Certified
Specialists can be located at
www.azbar.org/LegalResources/findspecialist.cfm .
7. OBTAIN TAX ADVICE
• IRS Self Help or contact a local IRS office
https://www.irs.gov/Help-&-Resources
• Attorneys who are State Bar Tax Law Certified Specialists
can be located at
www.azbar.org/LegalResources/findspecialist.cfm
8. BE AWARE OF THE CONSEQUENCES OF COMMITTING
“WASTE”
Damaging the property or removing fixtures such as sinks, toilets,
cabinets, air conditioners, and water heaters may result in liability
to the lender for “waste.” In other words, the lender may be able
to sue you for damages if you have physically abused, damaged or
destroyed any part of the property.
http://1.usa.gov/1OTz8ug
Advisory
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1. LOAN WORKOUT
• Reinstatement:
Paying the total amount owed by a specific date in
exchange for the lender agreeing not to foreclose.
• Forbearance:
An agreement to reduce or suspend payments for a short
period of time.
• Repayment Plan:
An agreement to resume making monthly payments with
a portion of the past due payments each month until they
are caught up.
• Claim Advance/Partial Claim:
If the loan is insured, a homeowner may qualify for an
interest-free loan from the mortgage guarantor to bring
the account current.
2. LOAN MODIFICATION
The lender may agree to change the terms of the original loan to
make the payments more affordable. For example, missed
payments can be added to the existing loan balance, the interest
rate may be modified or the loan term extended. Loan
modification resources include:
• Know Your Options:
http://knowyouroptions.com/modify/modification
• Making Homes Affordable:
www.makinghomeaffordable.gov
• Homeownership Preservation Foundation:
www.995hope.org or call 1-888-995-HOPE™ Hotline
3. REFINANCE
If the lender will not agree to a loan workout or
modification, the homeowner may be able to refinance
the loan with another lender.
Learn more at
http://1.usa.gov/1RIyKBF
4. DEED-IN-LIEU OF FORECLOSURE
The lender may allow a homeowner to “give back” the
property. This option may not be available if there are
other liens recorded against the property. Review the
Deed in Lieu of Foreclosure FAQ’s from HUD at
http://1.usa.gov/1NkOzch
5. WORK OUT SALE
The lender may allow a specific amount of time for the home to be
sold and the loan to be paid off. The lender may also allow a
buyer to assume the loan to purchase the property even if the
loan is non-assumable.
6. BANKRUPTCY
If you are considering bankruptcy as an option, consult with an
attorney that specializes in bankruptcy cases:
www.azbar.org/LegalResources/findspecialist.cfm
Access the Arizona Bankruptcy Court self-help information at
http://www.azb.uscourts.gov/ or call 1-866-553-0893
7. FORECLOSURE
Allowing the lender to foreclose is another option. The
counselors at the Arizona Foreclosure Help Line can
explain the foreclosure process
http://1.usa.gov/1OTz8ug or call 1-877-448-1211
Ultimately, only you and your attorney can decide if
foreclosure is the best option for you. Attorneys who are
State Bar Real Estate Law Certified Specialists can be
located at
www.azbar.org/LegalResources/findspecialist.cfm
Ask your attorney about the possibility of a deficiency lawsuit after
foreclosure. Assuming all statutory requirements are met, the
foreclosure, even if the amount due to the lender exceeds the
value of the property. Also, seek professional tax advice about the
Arizona anti-deficiency statutes may limit the lender’s remedy to
consequences of a foreclosure and review the IRS information at
https://www.irs.gov/Help-&-Resources
OPTIONS OTHER THAN SHORT SALECONSIDER ALL OPTIONS
A SHORT SALE MAY NOT BE YOUR BEST COURSE OF ACTION.
CONSIDER ALL YOUR OPTIONS BEFORE MAKING A DECISION.
Page | 3 of 6 Arizona Department of Real Estate Short Sale Seller Advisory (March 2016)
Advisory
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SHORT SALE CONSIDERATIONS
IF YOU DECIDE TO PURSUE A SHORT SALE,
CONSIDER TAKING THE FOLLOWING ACTIONS
1. CONTACT A QUALIFIED REAL ESTATE PROFESSIONAL
Interview several real estate professionals and ask about their
experience in short sales, the number of short sale transactions
that they have handled, and their education and training in short
sales.
• Review the real estate professional’s background and
continuing education on the ADRE website at
http://services.AZRE.gov/publicdatabase
• Ask if the real estate professional has obtained a short
sale certification, such as the Short Sales and Foreclosure
Resource Certification (“SFR”)www.realtorsfr.org/ .
• Find a REALTOR® at www.aaronline.com/
2. INVESTIGATE DOCUMENTATION AND ELIGIBILITY
Documentation and eligibility criteria for short sales vary
depending on specific lender and investor guidelines. Generally,
you must prove that you are financially incapable of paying the
loan and the lender is convinced that it will fare better by agreeing
to a sale for less than the outstanding loan amount than
foreclosing.
3. DETERMINE THE AMOUNT OWED ON THE PROPERTY
All debt and costs must be factored in before determining whether
a short sale is feasible. Consider the delinquent loan, home equity
loan or other loans recorded against the property, past due
homeowner’s association fees, unpaid property taxes and the
costs of a sale, such as closing costs, escrow fees and brokerage
commissions. If you have more than one loan on the property, be
aware that a short sale will generally require the approval of all
lenders.
5. CONSULT LEGAL COUNSEL
The importance of competent legal counsel to help you determine
whether a short sale is the best option and to advise you during
the short sale process cannot be over emphasized. See the legal
resources listed on page 2 or visit www.azbar.org.
6. UNDERSTAND THAT A SHORT SALE MAY NOT
DISCHARGE THE DEBT
Even if a lender agrees to a short sale, the lender, the VA,
or the FHA may not agree to forgive the debt entirely and
may require you to pay the difference as a personal
obligation. This outstanding personal obligation could
result in a subsequent collection action. For example, a
lender may accept the short sale purchase price to
“release the lien” on the property as opposed to agreeing
to accept the purchase price as “full and final settlement
of the debt” on the property. Therefore, be certain of the
terms of any short sale before making a decision, consult
an attorney regarding whether the lender is entitled to
pursue a deficiency judgment and obtain any debt
forgiveness agreements with the lender in writing.
7. OBTAIN TAX ADVICE
A short sale in which the debt is forgiven is a relief of debt and
may be treated as income for tax purposes. The Mortgage
Forgiveness Tax Relief Act of 2015 created a limited exemption to
allow homeowners to pay no taxes on debt forgiveness; however,
only cancelled debt used to buy, build or improve a principal
residence or refinance debt incurred for those purposes qualifies
for this tax exemption. For more information on the tax
consequences of debt relief seek professional tax advice and go to
https://www.irs.gov/uac/Home-Foreclosure-and-Debt-Cancellation.
8. BE AWARE OF THE IMPACT ON YOUR CREDIT SCORE
The impact of a short sale on your credit score depends upon a
variety of factors, including late or missed payments. A short sale
may appear on your credit report as “pre-foreclosure
redemption,” “paid in full for less than full balance” or other
similar term.
9. UNDERSTAND THAT THERE MAY BE A WAITING PERIOD
Your ability to qualify for a loan to purchase another home after a
short sale will likely be impacted by a short sale and there may be
a waiting period before you can purchase another home.
BEFORE YOU CAN BUY ANOTHER HOME
4. DETERMINE THE ESTIMATED FAIR MARKET VALUE OF
You must prove to the lender that the home is worth less than the
unpaid loan balance. Consult a real estate professional or an
THE PROPERTY
appraiser for assistance in estimating the value of the property.
Page | 4 of 6 Arizona Department of Real Estate Short Sale Seller Advisory (March 2016)
Advisory
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SHORT SALE CONSIDERATIONS(CONTINUED)
10. HOME AFFORDABLE FORECLOSURE ALTERNATIVE
The HAFA program was designed to give homeowners different
alternatives to a foreclosure, which include incentives for
completing a short sale. For more information on the options
(HAFA) PROGRAM
available, visit the HAFA program website
http://1.usa.gov/1IHWsvD
• To find out which option you may be eligible for, go to
http://1.usa.gov/1SSg3Ka
• To find out if your mortgage company participates in the
HAFA program, go to
http://1.usa.gov/1XZVGkJ
11. REVIEW THE ARIZONA ASSOCIATION OF REALTORS®
(AAR) SHORT SALE FORMS
AAR has developed the following contract forms to assist you in a
short sale transaction. Review these contract forms and any other
forms you are asked to sign, so that you thoroughly understand
your rights and obligations.
• Short Sale Addendum to the Listing Contract
http://bit.ly/1SQQl8W
• Short Sale Addendum to the Arizona REALTORS®
Residential Resale Sale Purchase Contract
http://bit.ly/1n1Jm29
For More Information, visit
AAR’s Consumer Foreclosure Assistance Links:
www.aaronline.com/2013/01/consumer-assistance-foreclosure/
Page | 5 of 6 Arizona Department of Real Estate Short Sale Seller Advisory (March 2016)
Advisory
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SELLER ACKNOWLEDGMENT
Seller acknowledges receipt of all six pages of this
Advisory and further acknowledges that there may
be other issues of concern not listed herein. The
information in this Advisory is provided with the
understanding that it is not intended as legal or
other professional services or advice. These
materials have been prepared for general
informational purposes only. The information and
links contained herein may not be updated or
revised for accuracy. If you have any additional
questions or need advice, please contact your own
lawyer.
Short Sale Seller Advisory
A Resource for
Real Estate Consumers
Provided by the
^ SELLER SIGNATURE DATE
^ SELLER SIGNATURE DATE
Page | 6 of 6 Arizona Department of Real Estate Short Sale Seller Advisory (March 2016)
Advisory
SAMPLE
SAMPLE
The Tenant Advisory is a Resource
Residential Lease Agreement
Tenants should protect themselves by taking the time to read the
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Provided by the Arizona Association of REALTORS®
COMMON DOCUMENTS A TENANT SHOULD REVIEW
Residential Rentals are required to comply with the Arizona Residential Landlord/Tenant Act:
Verification of Ownership
Prior to executing a lease agreement or conveying any money, tenants should independently verify the owner of the property
and confirm that they are contracting with the owner of record. If a person other than the owner signs the lease agreement,
tenants should verify that the third party has authority to act on the owner's behalf. Information regarding property ownership
Prior to executing a lease agreement or conveying any money, tenants should independently verify the owner of the property
residential lease agreement and understand their legal rights and
obligations before they enter into a lease agreement. Click to view
a sample of the agreement:
Residential Lease Owner’s Property Disclosure
Many landlords provide a RLOPDS. This document poses a variety
of questions for the owner to answer about the property and its
condition. The property manager/broker is not responsible for
verifying the accuracy of the items on the RLOPDS; therefore, a
Statement (RLOPDS)
tenant should carefully review the RLOPDS and verify those
statements of concern. Click to view a sample of the RLOPDS.
Homeowners Association (HOA) Governing Documents
If CC&Rs are recorded against the property, the tenant
In addition to CC&Rs, HOAs may be governed by Articles ofIncorporation, Bylaws, Rules and Regulations, and oftenarchitectural control standards. Read and understand these
documents. Also, be aware that some HOAs impose fees. Tenants
with questions about their rights and remedies regarding
homeowners associations or community associations should read
the information provided at
Lead-based Paint Disclosure Form
If the home was built prior to 1978, the landlord must provide the
tenant with a lead-based paint disclosure form. Information about
lead-based paint may be obtained at Arizona Department of Real
Move-in/Move-out Inspection
The importance of inspecting the property at the time of moving in
cannot be over-emphasized. The tenant is encouraged to fill out a
move-in/move-out checklist to identify material defects in the
property within the stated timeframe. A sample of AAR’s Move-
in/Move-out Condition Checklist can be viewed at:
. Tenants should keep a copy of the checklist
http://1.usa.gov/1DcWQKx
https://www.aaronline.com/2015/07/arizona_county_assessors/
1.
http://bit.ly/1GcMWZq.
2.
http://bit.ly/20CtjGM.
3.
agrees to follow the CC&Rs. It is essential that the tenant
review and agree to these restrictions prior to leasing a
property. The Arizona Department of Real Estate (ADRE)
advises: “Read the deed restrictions, also called CC&Rs
(covenants, conditions and restrictions). You might find
some of the CC&Rs are very strict.”
http://www.azre.gov/PublicInfo/RealEstateResearchTopics.aspx
or Chapters 16 and 18 of the Arizona Revised Statues – Title 33:
http://www.azleg.state.az.us/arizonarevisedstatutes.asp?Title=33
4.
Estate: http://bit.ly/1LWSiz9 or http://www2.epa.gov/lead .
5.
http://bit.ly/23FE1OQ
for their records and may also want to take photographs of any
damage observed at the time of move-in.
Page | 1 of 4 Arizona Association of REALTORS® Tenant Advisory (March 2016)
following: .
.
Advisory
Repairs and Property Condition
Pursuant to Arizona law, the landlord is generally responsible for
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ensuring that all “electrical, plumbing, sanitary, heating,
ventilating, air-conditioning and other facilities and appliances,
including elevators, supplied or required supplied by him” be in
Access to the Property by Landlord or Landlord’s
Unless the tenant requests repairs in writing, the landlord must
give the tenant at least two days notice to enter the property,
during reasonable hours, to make repairs, conduct inspections,
have services completed or exhibit the property to prospective
Representative
purchasers and tenants. The landlord has the right to immediately
to, monthly rent. A holdover tenant is someone who stays in the
lease property after the express term of the lease has expired. The
landlord can choose to evict a holdover tenant or allow the tenant
Notice
Unless otherwise agreed, all notices shall be sent registered or
certified mail, or personally delivered. A.R.S. §33-1313.
good and safe working order and condition. A.R.S. §33-1324. It is
the landlord’s responsibility to make sure that necessary repairs
are made to keep the property in a fit and livable condition. It is
the tenant’s responsibility to notify the landlord of any/all
enter the premises in the event of an emergency or by court
order. A.R.S. §33-1343.
Deposits/Fees
Termination of the Lease
Unless the parties desire for the lease agreement to continue,
written notice of intent not to renew the lease agreement shall be
issued pursuant to the terms of the lease. If the lease continues on
a month-to-month basis, absent prior written agreement, either
the lease owner or the tenant may terminate by providing 30-days
written notice prior to the periodic rental date (i.e. the date on
which rent is due) per A.R.S. §33-1375(B).
If the tenant vacates the property before the lease expires, they
can still be held responsible for damages, including, but not limited
to continue living in the property on a month-to-month basis
under the terms and conditions of the lease agreement.
1.
2.
necessary repairs. Following proper notice, the landlord has five
days to make any repairs that materially affect the health and
safety of the tenant(s) and 10 days to make any other requested
repairs. NOTE: Pursuant to A.R.S. §33-1324(C), the landlord and
tenant of a single family residence may agree in writing, supported
by adequate consideration, that the tenant will perform the
the landlord’s duties to maintain a fit premises and perform specified
repairs.
3.
4.
The lease agreement should specify which deposits/fees are
refundable and which are not. A landlord is not permitted to
demand refundable security in an amount in excess of one and
one-half month's rent.
be held by the landlord or in a broker's trust account (disclosed in
During the term of the lease, the tenant's security deposit should
writing). At the end of the lease all refundable deposits shall be
refunded to the tenant pursuant to A.R.S §33-1321(G). The
landlord can subtract unpaid rent or repair costs from the security
deposit.
Within 14 business days after termination of the tenancy and
delivery of possession and demand by the tenant, the tenant is
5.
entitled to receive an itemized list of any/all security deposit
deductions together with the amount due and payable to the
tenant. A.R.S §33-1321(D).
6. Foreclosure
The landlord shall not allow the property to become the subject of
a trustee's sale and doing so may place the landlord in breach of
the lease agreement. Nonetheless, a landlord’s failure to pay the
mortgage does not eliminate the tenant’s obligation to pay rent.
To avoid breaching the lease, the tenant should continue paying
rent to the landlord up to the date on which the foreclosure is
completed.
7. Insurance
Tenants are strongly encouraged to obtain renter’s insurance for
their benefit. Pursuant to some lease agreements, certain pets
may require additional insurance coverage. Tenants are
encouraged to contact an insurance professional concerning
additional coverage that may be required.
http://1.usa.gov/1kTWeY8
8. Fair Housing & Disability Laws
The Fair Housing Act prohibits discrimination based on race, color,
national origin, religion, sex, familial status (including children
under the age of 18 living with parents or legal custodians,
pregnant women, and people securing custody of children under
the age of 18), and disability. Visit HUD’s Fair Housing/Equal
Opportunity website at:http://1.usa.gov/1pbD5iW .
For information on the Americans with Disabilities Act, visit
www.usdoj.gov/crt/ada/adahom1.htm
Page | 2 of 4 Arizona Association of REALTORS® Tenant Advisory (March 2016)
COMMON DOCUMENTS AND DISCLOSURES
.
Advisory
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Pests Links to state agencies, city and county websites:
ADDITIONAL INFORMATION ADDITIONAL RESOURCES
Sex Offenders
www.az.gov .
Arizona Tenant’s Rights and Responsibilities Handbook:
http://bit.ly/1uIxt4g
Arizona Department of Real Estate Consumer
www.azre.gov/InfoFor/Consumers.aspx
Find a REALTOR®: www.aaronline.com/realtor-search/.
For information on indoor environmental concerns, the
EPA has a host of resource materials and pamphlets
which are available here.
www.epa.gov/iaq/pubs/index.html .
For crime statistics in all Arizona cities go to:
www.leagueaz.org/lgd/ , click on the city/town and search
for “crime statistics.”
Tenants may find that children cannot attend the school
nearest to the property and may even be transported to
another community. For information about Arizona’s
schools visit: http://www.azed.gov/
U.S. Department of Housing and Urban Development
Housing Choice Vouchers Fact Sheet can be found at the
http://1.usa.gov/1sg4YU3 .
Information regarding Section 8 programs available
through the Arizona Public Housing Authority can be
found at:
Maps for military airports can be found at
http://www.azre.gov/AirportMaps/MilitaryAirports.aspx .
Maps for many of the public airports can be found at:
www.azre.gov/AirportMaps/PublicAirports.aspx .
1.
Bedbugs: Bedbug infestation is on the rise in Arizona and
nationally. For more information on rights and obligations with
respect to bedbugs visit the following websites at
http://bit.ly/1LAcgey , www.cdc.gov/parasites/bedbugs/ or
www.epa.gov/bedbugs/
Scorpions: Information on scorpions may be found at
http://bit.ly/1Ihq9y6
2. Swimming Pools and Spas
Barriers: Each city and county has its own swimming pool barrier
ordinance and tenants should investigate and comply with all
applicable state, county and municipal pool regulations. Pool
barrier contact information for Arizona cities and counties may be
found at:http://bit.ly/20ZG8tp. The Arizona Department of Health
Services Private Pool Safety notice may be found at
http://azdhs.gov/phs/oeh/pool_rules.htm . The state law on
swimming pools is located at
www.azleg.state.az.us/ars/36/01681.htm .
3.
The presence of a sex offender in the vicinity of the property is not
a fact that the landlord or broker is required to disclose. Since June
1996, Arizona has maintained a registry and community
notification program for convicted sex offenders. This information
may be accessed at: http://bit.ly/20CwL4l or through the National
Sex Offender Public Website at: http://1.usa.gov/1SgkQJk . Prior to
June 1996, registration was not required and only the higher-risk
sex offenders are on the website.
•
•
following site:
http://1.usa.gov/1IbQTAh
Page | 3 of 4 Arizona Association of REALTORS® Tenant Advisory (March 2016)
•
•
•
•
•
•
•
•
•
.
Information: .
.
Advisory
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Tenant acknowledges receipt of all four pages of this
TENANT ACKNOWLEDGMENT
Tenant Advisory
A Resource for
Real Estate Consumersadvisory. Tenant further acknowledges that there
may be other disclosure issues of concern not listed
in this advisory. Tenant is responsible for making all
necessary inquiries and consulting the appropriate
persons or entities prior to the leasing of any
property.
The information in this advisory is provided with the
understanding that it is not intended as legal or other
professional services or advice. These materials have
been prepared for general informational purposes
only. The information and links contained herein may
not be updated or revised for accuracy. If you have
any additional questions or need advice, please
contact your own lawyer or other professional
representative.
TENANT SIGNATURE DATE
TENANT SIGNATURE DATE
Page | 4 of 4 Arizona Association of REALTORS® Tenant Advisory (March 2016)
Advisory
TO ENSURE THAT YOU HAVE THE MOST UP-TO-DATE BUYER
ADVISORY, PLEASE CHECKhttps://www.aaronline.com/manage-risk/buyer-advisory-3/
Phone: Fax:
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Garden Brook Realty, 520 W Sheldon Street Suite 2A Prescott, AZ 86301928-710-0020 928-227-2654 Diann Dede Erceg
Advisory
This Advisory is supplemental to obtaining professional property inspections. Professional
property inspections are absolutely essential: there is no practical substitute for a professional
inspection as a measure to discover and investigate defects or shortcomings in a property.
Page 1 of 13
A real estate agent is vital to the purchase of
1. Common documents a buyer should review;
REMINDER:
This Advisory is designed to make the purchase of
investigate or verify concerning a property
2. Physical conditions in the property the buyer
3. Conditions affecting the surrounding area that
In addition, a buyer must communicate to the
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Arizona Department of Real Estate Buyer Advisory (August 2017)
Phone: Fax:
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A Resource for Real Estate Consumers
real property and can provide a variety of
services in locating a property, negotiating
the sale, and advising the buyer.
discover defects or evaluate the physical
condition of property; however, a real estate
agent can assist a buyer in finding qualified
inspectors and provide the buyer with
documents and other resources containing
vital information about a prospective property.
real property as smooth as possible. Some of the
more common issues that a buyer may decide to
A real estate agent is generally not qualified to
purchase are summarized in this Advisory.
Included in this Advisory are:
should investigate; and
the buyer should investigate.
real estate agents in the transaction any special
concerns the buyer may have about the property
or surrounding area, whether or not those issues
are addressed in this Advisory.
Provided by the Arizona Association of REALTORS®and the Arizona Department of Real Estate
Advisory 928-710-0020 928-227-2654 Diann Dede ErcegGarden Brook Realty, 520 W Sheldon Street Suite 2A Prescott, AZ 86301
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Table of Contents
SECTION 1
COMMON DOCUMENTS A BUYER SHOULD REVIEW3 Purchase Contract
Arizona Department of Real EstatePage 2 of 13 Buyer Advisory (August 2017)
3 MLS Printout
3 The Subdivision Disclosure Report
(Public Report)
3 Seller’s Property Disclosure
Statement (SPDS)
3 Covenants, Conditions and
Restrictions (CC&Rs)
4 Homeowner’s Association (HOA)
Governing Documents
HOA Disclosures
Community Facilities District
Title Report or Title Commitment
Loan Information & Documents
Home Warranty Policy
Affidavit of Disclosure
4
4
4
4
4
5
5 Lead-Based Paint Disclosure Form
Professional Inspection Report
County Assessors/Tax Records
Termites and Other Wood
Destroying Insects and Organisms
Foreign Investment in Real Property
Tax Act (FIRPTA)
5
5
5
5
SECTION 2
COMMON PHYSICAL CONDITIONS IN THE PROPERTYA BUYER SHOULD INVESTIGATE
6 Repairs, Remodeling and 7 Water/Well Issues 8 Indoor Environmental Concerns
New Construction
Square Footage
Roof
Swimming Pools and Spas (Barriers)
Septic and Other On-Site
Wastewater Treatment Facilities
Sewer
6
6
6
6
6
(Adjudications, CAGRDs)
Soil Problems
Previous Fire/Flood
Pests (Scorpions, Bed bugs,
Roof Rats, Termites & Bark Beetles)
Endangered & Threatened Species
Deaths & Felonies on the Property
7
7
7
8
8
(Mold, Chinese Drywall, Radon Gas &
Carbon Monoxide, Drug labs, Other)
Property Boundaries
Flood Insurance / Flood Plain Status
Insurance (Claims History)
Other Property Conditions
(Plumbing, Cooling/Heating,
Electrical systems)
8
9
9
9
SECTION 3
CONDITIONS AFFECTING THE AREA SURROUNDINGTHE PROPERTY THE BUYER SHOULD INVESTIGATE
9 Environmental Concerns 10 Freeway Construction 10 Military and Public Airports
(Environmentally Sensitive
Land Ordinance)
Electromagnetic Fields
Superfund Sites
10
10
& Traffic Conditions
Crime Statistics
Sex Offenders
Forested Areas
10
10
10
Zoning/Planning/
Neighborhood Services
Schools
City Profile Report
11
11
11
SECTION 4
OTHER METHODS TO GETTING INFORMATION ABOUT A PROPERTY11 Talk to the Neighbors 11 Drive around the Neighborhood
SECTION 5
RESOURCES12 Market Conditions Advisory 12 Additional Information Services: NATIONAL ASSOCIATION OF
12 Fair Housing & Disability Laws REALTORS®, Arizona Government, Arizona Department of
Real Estate, and Arizona Association of REALTORS®
BUYER ACKNOWLEDGMENT p.13
11 Google Earth
12 Wire Fraud
Advisory
The documents listed below may not be relevant in every transaction, nor is the list exhaustive. Unless otherwise stated,
http://bit.ly/2kpUncL
COMMON DOCUMENTS A BUYER SHOULD REVIEW
Buyers should protect themselves by taking the timeto read the real estate purchase contract andunderstand their legal rights and obligations beforethey submit an offer to buy a property.
Section 1
the real estate broker has not independently verified the information contained in these documents.
1 Purchase Contract
(AAR Sample Residential Resale Purchase Contract)
2 MLS Printout
A listing is a contractual agreement between theseller and the listing broker and may authorize the
broker to submit information to the Multiple ListingService (MLS). The MLS printout is similar to anadvertisement. Neither the listing agreement nor theprintout is a part of the purchase contract betweenthe buyer and seller. The information in the MLS
printout was probably secured from the seller, thebuilder, or a governmental agency, and could beinaccurate, incomplete or an approximation.Therefore, the buyer should verify any importantinformation contained in the MLS.
3 The Subdivision Disclosure
A Subdivision Disclosure Report (Public Report) is
Report (Public Report)
Arizona Department of Real EstatePage 3 of 13 Buyer Advisory (August 2017)
http://services.azre.gov/publicdatabase/SearchDevelopments.aspx
(ADRE Search Developments)
http://www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx
(ADRE Property Buyer’s Checklist)
ADRE does not verify the information in the PublicReport. Therefore, the Report could be inaccurate soit should be verified by the buyer.
4 Seller’s Property DisclosureStatement (SPDS)
Most sellers provide a SPDS. This document poses avariety of questions for the seller to answer about the
property and its condition. The real estate broker isnot responsible for verifying the accuracy of the itemson the SPDS; therefore, a buyer should carefullyreview the SPDS and verify those statements ofconcern.
http://bit.ly/2knrN0A (AAR Sample SPDS)
http://www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx
(ADRE Property Buyer’s Checklist)
5 Covenants, Conditionsand Restrictions (CC&Rs)
The CC&Rs are recorded against the property and
http://www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx
(ADRE Property Buyer’s Checklist)
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intended to point out material information about asubdivision. Subdividers (any person who offers forsale or lease six or more lots in a subdivision or whocauses land to be divided into a subdivision) arerequired to give buyers a Public Report. Read the
Public Report before signing any contract topurchase property in a subdivision. Although someof the information may become outdated,subsequent buyers can also benefit from reviewingthe Public Report. Public Reports dating from January1, 1997, are available on the Arizona Department of
Real Estate (ADRE) website.
generally empower a homeowner’s association tocontrol certain aspects of property use within thedevelopment. By purchasing a property in such adevelopment, the buyer agrees to be bound by theCC&Rs. The association, the property owners as a
whole, and individual property owners can enforce thecontract. It is essential that the buyer review and agreeto these restrictions prior to purchasing a property.
ADRE ADVISES:
“Read the deed restrictions, also called CC&Rs
(covenants, conditions and restrictions). You might find
some of the CC&Rs are very strict.”
Buyers should consult legal counsel if uncertain of the
application of particular provisions in the CC&Rs.
Advisory
6
In addition to CC&Rs, HOAs may be governed by Articles of Incorporation, Bylaws, Rules andRegulations, and often architectural controlstandards. Read and understand these documents.
Also, be aware that some HOAs impose fees thatmust be paid when the property is sold, so ask if thepurchase of the property will result in any fees.Condominium and planned community HOAs areregulated by Arizona statutes. They are not under the
jurisdiction of the Department of Real Estate (ADRE).
7 HOA Disclosures
If purchasing a resale home in a condominium or
Arizona Department of Real EstatePage 4 of 13 Buyer Advisory (August 2017)
www.alta.org/consumer/questions.cfm
(American Land Title Association)
https://insurance.az.gov/consumers/help-hometitleflood-insurance
(Arizona Department of Insurance)
9 Title Report or Title Commitment
commitment lists documents that are exceptions to
10 Loan Information and Documents
Unless a buyer is paying cash, the buyer must qualify
http://1.usa.gov/1uNYamL (HUD)
https://www.namb.org/links_to_government_resources.php
(National Association of Mortgage Brokers- Consumer Info)
Homeowners Association (HOA)Governing Documents
http://bit.ly/2ebBSLH
(Chapter 16 and 18 of the Arizona Revised Statutes-Title 33)
http://bit.ly/1rCq9kd (ADRE HOA Information)
http://bit.ly/2ebBSLH
http://bit.ly/2e8jdM3
(A.R.S. § 33-1260)
8 Community Facilities District
The Arizona Community Facilities District Act allows
for the formation of a community facilities district(CFD) by a municipality or county for the purpose ofconstructing or acquiring a public infrastructure. It isimportant when purchasing property to determinewhether it falls within the boundaries of a CFD as this
may result in an additional tax burden upon theowner. While the presence of a CFD may be notedon the Residential Seller’s Property DisclosureStatement, prospective buyers can further investigatethe issue by contacting the treasurer’s office or
assessor’s office for the county in which the propertyis located.
https://www.mba.org/who-we-are/consumer-tools
(Mortgage Bankers Association)
11 Home Warranty Policy
A home warranty [policy] is a service contract that
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http://1.usa.gov/1Ewofgr (Your Home Loan Toolkit -
Consumer Financial Protection Bureau)
The title report or commitment contains importantinformation and is provided to the buyer by the
title/escrow company or agent. This report or
the title insurance (Schedule B Exceptions). Schedule BExceptions may include encumbrances, easements, andliens against the property, some of which may affect theuse of the property, such as a future addition orswimming pool. Make sure you receive and review all of
the listed documents. Questions about the titlecommitment and Schedule B documents may beanswered by the title or escrow officer, legal counsel, or asurveyor.
typically covers the repair and/or replacement costsof home appliances and major systems such as
heating, cooling, plumbing, and possibly othercomponents of a home that fail due to normal usageand age. Coverage varies depending on the policy. Beaware that pre-existing property conditions are
generally not covered. A home warranty may be partof the sale of the home. If so, buyers should
thoroughly read the home warranty contract tounderstand coverage, limitations, exclusions, andcosts associated with the policy.
planned community, the seller (if fewer than 50 unitsin the community) or the HOA (if there are 50 ormore units) must provide the buyer with a disclosurecontaining a variety of information.
for a loan in order to complete the purchase. A buyershould complete a loan application with a lenderbefore making an offer on a property if at all possibleand, if not, immediately after making an offer. It willbe the buyer’s responsibility to deposit any down
payment and ensure that the buyer’s lender depositsthe remainder of the purchase price into escrow priorto the close of escrow date. Therefore, make sure youget all requested documentation to your lender assoon as possible.
and http://bit.ly/2e8jdM3
http://www.re.state.az.us/HOA/HOA.aspx/
(Homeowners Association Dispute Process)
(A.R.S. § 33-1806)
Nonetheless, the Arizona’s Homeowner'sAssociation Dispute Process is administered by theADRE.
Advisory
12
If the buyer is purchasing five or fewer parcels of land(whether improved or vacant), other than subdivided
land, in an unincorporated area of a county, the sellermust furnish the buyer with an Affidavit of Disclosure.
14 Professional Inspection Report
The importance of having a property inspected by a
Arizona Department of Real EstatePage 5 of 13 Buyer Advisory (August 2017)
Apache:
http://bit.ly/1FKUhk8
Termites are commonly found in some parts o
http://opm.azda.gov (Office of Pest Management-General Information)
http://opm.azda.gov/ (Obtain a Termite History Report on a Property)
Affidavit of Disclosure
http://bit.ly/1p6CjDO
(AAR Sample Affidavit of Disclosure)
http://www2.epa.gov/lead,
17
Foreign Investment in Real Property Tax Act (FIRPTA)
13 Lead-Based Paint Disclosure Form
If the home was built prior to 1978, the seller must
provide the buyer with a lead-based paint disclosureform. Buyer is further advised to use certifiedcontractors to perform renovation, repair or paintingprojects that disturb lead-based paint in residentialproperties built before 1978 and to follow specific
work practices to prevent lead contamination.
http://1.usa.gov/1uO5wGS (EPA)
http://bit.ly/1rCq9kd (ADRE Lead Based Paint Information)
https://btr.az.gov/laws-standards/standards/home-inspectors
http://www.azashi.com/articles (Additional Information)
15 County Assessors/Tax Records
The county assessor’s records contain a variety of
Cochise:
http://bit.ly/1oUS7ok
Coconino: Gila:
http://1.usa.gov/1n2zoY0 http://bit.ly/Yq3bV9
Graham: Greenlee:
http://1.usa.gov/1oUTsLP http://bit.ly/1md668Y
La Paz: Maricopa:
http://bit.ly/1BuxdWY http://1.usa.gov/1pWx1tF
Mohave: Navajo:
http://bit.ly/Yq6nAj http://bit.ly/1pWxgVA
Pima: Pinal:
http://1.usa.gov/1oUVefT http://1.usa.gov/1rOIQBr
Santa Cruz: Yavapai:
http://bit.ly/1yRYwXl http://bit.ly/1AsANj5
Yuma:
http://bit.ly/1FZ1uir
16 Termites and Other Wood DestroyingInsects and Organisms
www.sb.state.az.us/TermiteInsp.php (What You Should Know
about Wood-Destroying Insect Inspection Reports)
Foreign Investment inReal Property Tax Act (FIRPTA)
http://1.usa.gov/1ldMdnq (I.R.S. FIRPTA Definitions)
www.irs.gov/Individuals/International-Taxpayers/FIRPTA-Withholding
(I.R.S. FIRPTA Information)
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http://www.irsvideos.gov/Individual/education/FIRPTA
FIRPTA Video)
(I.R.S.
professional inspector cannot be over-emphasized. Aninspection is a visual physical examination, performedfor a fee, designed to identify material defects in theproperty. The inspector will generally provide the
buyer with a report detailing information about theproperty’s condition. The buyer should carefully reviewthis report with the inspector and ask the inspectorabout any item of concern. Pay attention to the scopeof the inspection and any portions of the propertyexcluded from the inspection.
valuable information, including the assessed valueof the property for tax purposes and some of thephysical aspects of the property, such as thereported square footage. The date builtinformation in the assessor’s records can be eitherthe actual or effective/weighted age if theresidence has been remodeled. All information onthe site should be verified for accuracy.
Arizona. The Office of Pest Management (OPM)regulates pest inspectors and can provide the buyer
with information regarding past termite treatmentson a property.
may impact the purchase of property if the legalowner(s) of the property are foreign persons or non-resident aliens pursuant to FIRPTA. If so, consult atax advisor as mandatory withholding may apply.
(BTR– Home Inspector Standards)
Advisory
Because every buyer and every property is different, the physical property conditions requiring investigation will vary.
https://roc.az.gov/before-hire
COMMON PHYSICAL CONDITIONS IN THE
Section 2
1
(Before You Hire a Contractor – Tips)
2 Square Footage
Square footage on the MLS printout or as listed by the
Arizona Department of Real EstatePage 6 of 13 Buyer Advisory (August 2017)
http://bit.ly/2dhVPdw (A.R.S. 36-1681 Swimming Pool Enclosures)
The seller may have made repairs or added a room to
4 Swimming Pools and Spas
If the property has a pool or a spa, the homeinspector may exclude the pool or spa from thegeneral inspection so an inspection by a pool or spacompany may be necessary.
http://bit.ly/20ZG8tp (AAR)
5
If the home is not connected to a public sewer, it is
http://bit.ly/2plVsZe
(ADEQ – AZ Statewide Inspection Program)
http://az.gov/app/own/home.xhtml
(File a Notice of Transfer Online)
PROPERTY A BUYER SHOULD INVESTIGATE
Repairs, Remodeling andNew Construction
www.greaterphoenixnari.org
of Remodeling Industry – Greater Phoenix Chapter)
(National Association of
http://www.nariofsouthernarizona.memberlodge.com/
(National Association of Remodeling Industry –
Southern Arizona)
https://apps-secure.phoenix.gov/PDD/Search/Permits
(City of Phoenix – Building Permit Records)
https://boa.az.gov/directories/appraiser
(AZFI - Arizona Board of Appraisers Directory)
3 Roof
If the roof is 10 years old or older, a roof inspection by alicensed roofing contractor is highly recommended.
www.azroofing.org
(Arizona Roofing Contractors Association)
https://roc.az.gov/before-hire
(Before You Hire a Contractor – Tips)
Septic and Other On-Site WastewaterTreatment Facilities
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The Arizona REALTORS® Residential PurchaseContract provides guidance for the buyer toinvestigate all applicable state, county, and municipalSwimming Pool Barrier regulations and acknowledgereceipt of the Arizona Department of Health Servicesapproved private pool safety notice. The staterequirements contained in the notice may besuperseded by local swimming pool barrier
ordinances that are equal to or more restrictive thanthe state requirements.
the property. The buyer should feel comfortable thatthe work was properly done or have an expert evaluatethe work. Request copies of permits, invoices or otherdocumentation regarding the work performed.
county assessor’s records is often only an estimate andgenerally should not be relied upon for the exactsquare footage in a property. An appraiser or architectcan measure the property’s size to verify the squarefootage. If the square footage is important, you shouldhave it confirmed by one of these experts during theinspection period in a resale transaction and prior toexecuting a contract in a new home transaction.
probably served by an on-site wastewater treatmentfacility (conventional septic or alternative system). Aqualified inspector must inspect any such facilitywithin six months prior to transfer of ownership. For
information on current inspection and transfer ofownership requirements, contact the specific countyenvironmental/health agency where the property islocated or the Arizona Department ofEnvironmental Quality (ADEQ).
Advisory
7
You should investigate the availability and quality ofthe water to the property.
CAGRDs: The Central Arizona Groundwater
Arizona Department of Real EstatePage 7 of 13 Buyer Advisory (August 2017)
http://www.re.state.az.us/PublicInfo/Fissures.aspx
(ADRE – Overview of Arizona Soils)
http://www.azgs.az.gov/hazards_problemsoils.shtml
(Arizona’s Swelling & Shrinking Soils)
concerns about the soil condition or observes
9 Previous Fire/Flood
If it is disclosed there has been a fire or flood on the
Water/Well Issues
http://bit.ly/1rj4DFW
(Wells & Assured/Adequate Water Information)
www.verdevalleywaterusers.org (Verde Valley Water Users Association)
www.cagrd.com
(Central Arizona Ground Water Replenishment District)
8 Soil Problems
The soil in some areas of Arizona has “clay-like”
or http://bit.ly/VAuDO8
Adjudications: Arizona is undertaking several Stream
For information regarding water uses and watershedsaffected by these adjudications, and the forms upon
sale of the property, visit the Department of WaterResources online.
http://bit.ly/1AsX14w
(Department of Water Resources – Adjudications)
Additionally, the Verde Valley Water Users assistsmembers in matters pertaining to the Gila RiverSystem Adjudication.
Other areas are subject to fissure, subsidence and
http://azgs.az.gov/efmaps.shtml (Area Maps)
http://bit.ly/XvZEEO
Subsidence & Earth Fissures)
(Information on Land
www.btr.state.az.us (State Certified Engineers & Firms)
10 Pests
Cockroaches, rattlesnakes, black widow spiders,scorpions, termites and other pests are common inparts of Arizona. Fortunately, most pests can becontrolled with pesticides.
Scorpions: Scorpions, on the other hand, may be
Bed bugs: Infestations are on the rise in Arizona
Roof Rats: Roof Rats have been reported in someareas by Maricopa County Environmental Services.
Termites: Consumer Information available from theOffice of Pest Management (OPM).
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6 SewerEven if the listing or SPDS indicates that the
tendencies, sometimes referred to as “expansive soil.”
other soil conditions. Properties built on such soilsmay experience significant movement causing a
major problem.
If it has been disclosed that the property is subjectto any such soil conditions or if the buyer has any
evidence of cracking, the buyer should secure anindependent assessment of the property and itsstructural integrity by a licensed, bonded, and
insured professional engineer.
Replenishment District (CAGRD) functions toreplenish groundwater used by its members,individual subdivisions and service areas of memberwater providers. Homeowners in a CAGRD pay an
annual assessment fee which is collected through thecounty property tax process based on the amount of
groundwater served to member homes.
Bark Beetles: OPM reports the presence of barkbeetles in some forested areas.
Adjudications, which are court proceedings todetermine the extent and priority of water rights inan entire river system.
property, a qualified inspector should be hired toadvise you regarding any possible future problems asa result of the fire or flood damage and/or anysubsequent repairs. For example, if the property wasnot properly cleaned after a flood, mold issues mayresult. Your insurance agent may be able to assist youin obtaining information regarding fire, flood, orother past damage to the property.
difficult to eliminate. If the buyer has any concerns orif the SPDS indicates the seller has seen scorpions orother pests on the property, seek the advice of a pestcontrol company.
and nationally.
http://data.azgs.az.gov/hazard-viewer/
(AZGS – Natural Hazards Viewer)
property is connected to the city sewer, a plumber,home inspector, or other professional should verify
it. Some counties and cities can perform this test aswell.
Advisory
Arizona Department of Real EstatePage 8 of 13 Buyer Advisory (August2017)
Arizona homes. Residents in homes with problem
Drug labs: Residual contamination arising from theillicit manufacture of methamphetamine and otherdrugs carried out in clandestine drug laboratoriespresents a serious risk of harm to human and
environmental health.
http://bit.ly/1HLlWs5 (Information on Scorpions)
http://www.fws.gov/southwest/es/arizona/ (Arizona Ecological Services)
Certain areas in the state may have issues related to
Mold: Mold has always been with us, and it is a rareproperty that does not have some mold. However,over the past few years a certain kind of mold hasbeen identified as a possible contributor to illnesses.
Allergic individuals may experience symptomsrelated to mold.
The Arizona Department of Health Services, Officeof Environmental Health, states:
If the property boundaries are of concern, a survey
http://bit.ly/1PFP9Y2 (Information on Bed Bugs)
http://www2.epa.gov/bedbugs
Them Out)
http://www.maricopa.gov/FAQ.aspx?TID=104 (Maricopa County
http://www.sb.state.az.us/ReTermites.php (Termite Information)
http://www.sb.state.az.us/BarkBeetles.php
Information)
11 Endangered & Threatened Species
http://www.fws.gov/endangered/map/state/AZ.html
(Arizona Endangered Species)
12 Deaths and Felonieson the Properties
Arizona law states that sellers and real estatelicensees have no liability for failure to disclose to abuyer that the property was ever the site of a natural
death, suicide, murder or felony.
This information is often difficult to uncover;
http://bit.ly/2lo53MZ (A.R.S. § 32-2156)
13 Indoor Environmental Concerns
“If you can see mold, or if there is an earthy or mustyodor, you can assume you have a mold problem.”
Radon Gas and Carbon Monoxide: Radon gas andcarbon monoxide poisoning are two of the more
common and potentially serious indoor air quality(IAQ) concerns. Both of these concerns can beaddressed by the home inspector, usually for anadditional fee. For information on radon levels in thestate, visit Arizona Radiation Regulatory Agency
online.
Other: For information on other indoor
http://www.epa.gov/iaq/pubs/index.html (Publications & Resources)
http://1.usa.gov/1it5voK (Indoor Air Quality)
www.epa.gov/mold (EPA)
www.cdc.gov/mold (Mold Information)
http://aardownload.com/2uZmDIc (Drywall Information Center)
www.azrra.gov/radon/index.html (About Radon)
http://www2.epa.gov/asbestos (Asbestos Information)
http://aardownload.com/2vBEvg6
14 Property Boundaries
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http://1.usa.gov/1OC9Yji (EPA Formaldehyde Information)
federally listed endangered or threatened speciesthat may affect land uses. Further information maybe obtained on the U.S. Fish and Wildlife website orby contacting the appropriate planning/developmentservice department.
however, the local law enforcement agency may beable to identify incidents related to a propertyaddress.
environmental concerns, the EPA has a host ofresource materials and pamphlets online.
may be warranted. For example, a survey may beadvisable if there is an obvious use of property byothers, i.e., a well-worn path across a property and/orparked cars on the property or fences or structures ofadjacent property owners that appear to be built onthe property. For more information, visit the ArizonaProfessional Land Surveyors online. A search forsurveyors may be found online at the Board of
– Roof Rats)
(Bed Bugs: Get Them Out and Keep
(Bark Beetle
Imported Drywall: There have been reports ofproblematic drywall, produced in China, used in
drywall report health issues such as respiratoryirritation, and other problems such as coppercorrosion and sulfur odors. Visit the ConsumerProduct Safety Commission website for moreinformation.
Technical Registration.www.azpls.org/ (AZ Professional Land Surveyors)
https://btr.az.gov/standards-landing (AZ BTR Land Surveyors)
(Voluntary Guidelines for
Methamphetamine)
Advisory
Every property is unique; therefore, important conditions vary.
CONDITIONS AFFECTING THE AREA SURROUNDING THE
Section 3
15
Arizona Department of Real EstatePage 9 of 13 Buyer Advisory (August 2017)
http://www.fcd.maricopa.gov/3847/Flood-Control-District
(Maricopa County Flood Control District-Services)
Your mortgage lender may require you to purchase
Other Arizona Counties: Consult County Websites.
https://www.fema.gov/national-flood-insurance-program(FEMA)
16
Many factors affect the availability and cost of
http://bit.ly/VDp15E (Home Seller’s Disclosure Report)
https://insurance.az.gov/consumers/help-hometitleflood-insurance
(AZ Department of Insurance)
PROPERTY THE BUYER SHOULD INVESTIGATE
Flood Insurance/Flood Plain Status
https://msc.fema.gov/portal (Flood Map Service Center)
Environmental Concerns
It is often very difficult to identify environmentalhazards. The Arizona Department of EnvironmentalQuality (ADEQ) website contains environmentalinformation regarding the locations of open and
http://legacy.azdeq.gov/environ/waste/solid/plan.html
Waste Facilities)
www.adeq.state.az.us (ADEQ)
Insurance (Claims History)
closed landfills (Solid Waste Facilities), wildfire
http://bit.ly/2egwpza (Elevation Certificates: Who Needs Them and
http://www.azgs.az.gov/hazards_floods.shtml (AZ Flood &
http://pdsd.tucsonaz.gov/pdsd/floodplain-information
(Tucson Flood Information)
17 Other Property Conditions
Plumbing: Check functionality.
Cooling/Heating: Make sure the cooling and heatingsystems are adequate.
Electrical Systems: Check for function and safety.
www.azdeq.gov/function/programs/wildfire.html (Wildfire Information)
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flood insurance in connection with your purchase ofthe property. The National Flood Insurance Programprovides for the availability of flood insurance andestablished flood insurance policy premiums based onthe risk of flooding in the area where properties arelocated. Changes to the federal law (The Biggert-Waters Flood Insurance Reform Act of 2012 and theHomeowner Flood Insurance Affordability Act of 2014,in particular) will result in changes to flood insurancepremiums that are likely to be higher, and in thefuture may be substantially higher, than premiumspaid for flood insurance prior to or at the time of saleof the property. As a result, purchasers of propertyshould not rely on the premiums paid for floodinsurance on the property previously as an indicationof the premiums that will apply after completion ofthe purchase. In considering purchase of the propertyyou should consult with one or more carriers of floodinsurance for a better understanding of floodinsurance coverage, current and anticipated futureflood insurance premiums, whether the prior owner’spolicy may be assumed by a subsequent purchase ofthe property, and other matters related to thepurchase of flood insurance for the property.
If community floodplain information is not availablefor a specific property, and in order to obtain floodinsurance, it may be necessary to have an elevationsurvey and obtain an elevation certificate. This is
necessary to determine a property's insurability andpremium rate. You may also wish to contact theFederal Emergency Management Agency (FEMA) for
more information about flood insurance as it relatesto the property.
Why - fact sheet)
Debris)
(ADEQ-Solid
homeowner’s insurance. Property owners mayrequest a five-year claims history from their insurancecompany, an insurance support organization or consumerreporting agency.
information, as well as air and water quality information(and more).
Advisory
Environmentally Sensitive Land
Arizona Department of Real EstatePage 10 of 13 Buyer Advisory (August 2017)
For information on electromagnetic fields, and
Crime statistics, an imperfect measurement at best,
The legislature has mandated the identification of
http://www.scottsdaleaz.gov/codes/eslo
(Environmentally Sensitive Land Ordinance)
2 Electromagnetic Fields
www.niehs.nih.gov/health/topics/agents/emf/
(National Institute of Environmental Health Sciences)
3 Superfund Sites
There are numerous sites in Arizona where the soiland groundwater have been contaminated by
improper disposal of contaminants. Maps may beviewed on ADEQ’s website to see if a property is in anarea designated by the ADEQ as requiring cleanup.
www.epa.gov/superfund/ (EPA) ,
5 Crime Statistics
Since June 1996, Arizona has maintained a registry
Life in a forested area has unique benefits and concerns. Contact county/city fire authority formore information on issues particular to a community.
www.azdps.gov/Services/Sex_Offender/ (Registered Sex Offenders and
http://www.nsopw.gov/en (National Sex Offender Public Site)
http://azsf.az.gov/ or
http://cals.arizona.edu/firewise
(Arizona Fire Wise Communities)
8 Military and Public Airports
http://www.scottsdaleaz.gov/codes/eslo/naos
(Natural Area Open Space)
http://espanol.epa.gov/ (Spanish)
https://www.azdeq.gov/function/programs/gis.html (ADEQ)
4 Freeway Constructionand Traffic Conditions
Although the existence of a freeway near the propertymay provide highly desirable access, sometimes it
contributes to undesirable noise. To search forroadway construction and planning, visit the ArizonaDepartment of Transportation (ADOT) website.
www.azdot.gov (ADOT)
www.azdot.gov/Highways (Statewide Projects)
www.az511.com (Traffic Conditions – Alerts)
http://1.usa.gov/1kSEpHc (Phoenix Crime Statistics)
http://www.tucsonaz.gov/police/statistics (Tucson Crime Stats)
www.leagueaz.org/lgd (Crime Statistics All Arizona Cities)
6 Sex Offenders
Community Notification)
7 Forested Areas
www.firewise.org
(Protecting Your Property from Wildfire)
Vacant land or lots may be for sale within areas of
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1
Ordinance: Approximately two-thirds of the Cityof Scottsdale is affected by the EnvironmentallySensitive Land Ordinance (ESLO), which requiressome areas on private property be retained in theirnatural state and designated as National Area OpenSpace (NAOS).
whether they pose a health risk to you or yourfamily, visit the National Institute of EnvironmentalHealth Sciences website.
provide some indication of the level of criminal activityin an area.
and community notification program for convictedsex offenders. Prior to June 1996, registration wasnot required, and only the higher-risk sex offendersare on the website. The presence of a sex offender inthe vicinity of the property is not a fact that the selleror real estate broker is required to disclose.
areas in the immediate vicinity of military and public
airports that are susceptible to a certain level ofnoise from aircraft. The boundaries of these areashave been plotted on maps that are useful indetermining if a property falls within one of these
areas. The maps for military and public airports maybe accessed on the Arizona Department of Real
Estate (ADRE) website. Additionally, the boundariesof military and public airports in Maricopa Countymay be viewed on the county website. These mapsare intended to show the area subject to apreponderance of airport-related noise from a givenairport. Periodic over-flights that may contribute to
noise cannot usually be determined from thesemaps.
high noise or accident potential zones. Because thezoning of these lots may conflict with the buyer’sability to develop the property, the buyer shouldverify whether development is prohibited.
Advisory
OTHER METHODS OF GETTING
Section 4
Arizona Department of Real EstatePage 11 of 13 Buyer Advisory (August 2017)
Zoning regulations for these areas, may be found at
11
Information on demographics, finances and other
http://www.homefair.com/real-estate/city-profile/index.asp
(City Profile Report)
INFORMATION ABOUT A PROPERTY
Talk to the Neighbors
Neighbors can provide a wealth of information.Buyers should always talk to the surroundingresidents about the neighborhood and the history ofthe property the buyer is considering for purchase.
City Profile Report
http://www.re.state.az.us/AirportMaps/MilitaryAirports.aspx
(ADRE - Maps of Military Airports & Boundaries)
www.re.state.az.us/AirportMaps/PublicAirports.aspx
(ADRE - Maps of Pubic Airports & Boundaries)
9 Zoning/Planning/Neighborhood Services
Information may be found on community websites.
http://phoenix.gov/business/zoning (Phoenix)
http://www.tucsonaz.gov/pdsd/planning-zoning (Tucson)
http://www.leagueaz.org/lgd/ (Other Cities and Towns)
10 Schools
Although there is no substitute for an on-site visit tothe school to talk with principals and teachers, thereis a significant amount of information about Arizona’sschools on the Internet. Visit the Arizona Departmentof Education website for more information.
http://www.azed.gov/ (Arizona Department of Education)
ADRE ADVISES:
“Call the school district serving the subdivision to
www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx (ADRE)
different times of the day and evening, to investigate
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Drive around the Neighborhood
Buyers should always drive around theneighborhood, preferably on different days at several
the surrounding area.
Investigate your Surroundings:
Google Earth is an additional method to investigatethe surrounding area:https://www.google.com/earth/
A.R.S.§28-8481.
determine whether nearby schools are accepting new
students. Some school districts, especially in the
northwest part of the greater Phoenix area, have placed
a cap on enrollment. You may find that your children
cannot attend the school nearest you and may even be
transported to another community.”
factors are drawn from an array of sources, such asU.S. Census Bureau, Bureau of Labor, Internal RevenueService, Federal Bureau of Investigation, and theNational Oceanic and Atmospheric Administration andmay be viewed on Homefair’s Website.
Advisory
Arizona Department of Real EstatePage 12 of 13 Buyer Advisory (August 2017)
https://www.nar.realtor/
Fair Housing & Disability Laws
The Fair Housing Act prohibits discrimination in the
http://bit.ly/1sSTprj (AAR - Sample Forms)
http://1.usa.gov/1pbD5iW (US Government – HUD)
http://www.ada.gov/pubs/ada.htm
(Americans with Disabilities Act)
Additional Information
NATIONAL ASSOCIATION OF REALTORS® (NAR)
NAR’S Ten Steps To Homeownershiphttp://bit.ly/YweGug
Home Closing 101www.homeclosing101.org
Information about ArizonaGovernment, State Agencies, City &
Arizona Department of Real EstateConsumer Informationwww.azre.gov/InfoFor/Consumers.aspx
Arizona Association of REALTORS®www.aaronline.com
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Section 5
RESOURCES
Market Conditions Advisory
The real estate market is cyclical and real estatevalues go up and down. The financial market alsochanges, affecting the terms on which a lender willagree to loan money on real property. It isimpossible to accurately predict what the realestate or financial market conditions will be at any
The ultimate decision on the price a buyer is willingto pay and the price a seller is willing to accept fora specific property rests solely with the individual
buyer or seller. The parties to a real estatetransaction must decide on what price and termsthey are willing to buy or sell in light of marketconditions, their own financial resources and their
The parties must, upon careful deliberation, decidehow much risk they are willing to assume in atransaction. Any waiver of contingencies, rights or
warranties in the Contract may have adverseconsequences. Buyer and seller acknowledge thatthey understand these risks.
Buyer and Seller assume all responsibility shouldthe return on investment, tax consequences, crediteffects, or financing terms not meet theirexpectations. The parties understand and agreethat the Broker(s) do not provide advice onproperty as an investment. Broker(s) are notqualified to provide financial, legal, or tax adviceregarding a real estate transaction. Therefore,
Broker(s) make no representation regarding theabove items. Buyer and seller are advised to obtainprofessional tax and legal advice regarding the
sale, rental, and financing of dwellings based on race,
color, national origin, religion, sex, familial status(including children under the age of 18 living withpeople securing custody of children under the age of18), and handicap (disability).
Wire Fraud
Beware of wiring instructions sent via email. Cyber
criminals may hack email accounts and send emailswith fake wiring instructions. You shouldindependently confirm wiring instructions in person
or via a telephone call to a trusted and verifiedphone number prior to wiring any money.
given time.
own unique circumstances.
advisability of entering into this transaction.
County Websites
http://bit.ly/2gQNWms (FTC & NAR - Protect your mortgage
closing from scammers
http://bit.ly/2vDDvFk (CFPB- Buying a home? Watch out for mortgage
closing scams
Advisory
^ BUYER SIGNATURE DATE
DATE^ BUYER SIGNATURE
Arizona Department of Real EstatePage 13 of 13 Buyer Advisory (August 2017)
BUYER ACKNOWLEDGMENT
Buyer acknowledges receipt of all 13 pages
of this Advisory.
Buyer further acknowledges that there may be
The information in this Advisory is provided with the
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other disclosure issues of concern not listed inthis Advisory. Buyer is responsible for making allnecessary inquiries and consulting theappropriate persons or entities prior to thepurchase of any property.
understanding that it is not intended as legal orother professional services or advice. Thesematerials have been prepared for generalinformational purposes only. The information andlinks contained herein may not be updated or
revised for accuracy. If you have any additionalquestions or need advice, please contact your ownlawyer or other professional representative.
Advisory
AFFIDAVIT OF LEGAL CLASS CORRECTION
If a parcel of property is used as a rental unit and identified by the
Page | 1 of 6 Arizona Association of REALTORS® Lease Owner’s Advisory (March 2016)
OWNER’S RESPONSIBILITIES AND STATUTORY REQUIREMENTS
Residential Rentals are required to comply with the Arizona Residential Landlord/Tenant Act:
http://1.usa.gov/1DcWQKx
county assessor as a class three property pursuant to A.R.S. § 42-
12003, the owner must notify the assessor of the rental use of the
property or be subject to a civil penalty prescribed by A.R.S. § 42-
12052. The lease owner must also register with the assessor in the
NOTIFICATION OF ARIZONA RESIDENTIAL RENTAL
PROPERTY
Pursuant to A.R.S. § 33-1902(B), an out-of-state owner of
residential rental property must designate and record with the
county assessor a statutory agent who lives in this state and who
will accept legal service on behalf of the owner. A person who fails
to comply with any provision of this section shall be assessed a civil
penalty of $1,000, plus an additional $100 for each month after the
date of the original violation until compliance occurs.
TRANSACTION PRIVILEGE TAX
Transaction Privilege Tax (TPT) is charged by some cities on the
owner’s rental income. This TPT, or rental tax, is the responsibility
of the lease owner but may be collected from the tenant with the
rent if permitted by the lease agreement. The tax is filed by the
lease owner or the property management company on either a
mailed to the owner. Failure to pay the applicable sales tax could
on the Transaction Privilege Tax go to:
The Lease Owner’s Advisory is a resourceprovided by the Arizona Association of REALTORS®
county where the property is located in the manner set forth in
A.R.S. § 33-1902(A). http://www.1.usa.gov/1PXAg1R
NOTE: If the owner is required to register the rental property with
the county assessor and fails to do so, the city or town may
impose a civil penalty payable to the city or town in the amount
of $150 per day for each day of violation, and the city or town
may impose enhanced inspections and enforcement measures on
the property. http://1.usa.gov/1ObYULL
BUSINESS LICENSE
Some cities require the owner to have a separate business license
prior to engaging in any type of business activity. It is the owner’s
responsibility to apply for and pay any fees associated with
obtaining this license. If the property is being professionally
managed, the lease owner should discuss this topic with their
property manager. www.azdor.gov/Business/LicensingGuide.aspx
FOREIGN LEASE OWNERS RESIDING OUTSIDE OF THE
UNITED STATES
Foreign lease owners must secure an Individual Taxpayer
Identification Number (ITIN). Unless the foreign lease owner files a
Form W-8ECI with their property management company, the
property manager must withhold 30% of the gross rental proceeds
for the property owned by the foreign lease owner. It is strongly
recommended that foreign lease owners retain the services of a
CPA and/or IRS Certified Acceptance Agent to ensure compliance
with applicable IRS rules and regulations. http://1.usa.gov/1O7u6NL
monthly or quarterly basis. The filing period is determined by the
applicable city and the tax rate is anywhere from 1.5% - 3% of the
monthly rent. In addition, some cities collect their own privilege
taxes; others choose the Arizona Department of Revenue to collect
the taxes for them. In some cases, it is the owner’s responsibility to
apply for this license if the property management company does
not have a master license for that city. After the city or state
receives the owner’s application, a license will be issued and
result in a penalty or fine by the city or town. For more information
www.azdor.gov/Business/TransactionPrivilegeTax.aspx
.
Phone: Fax:
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1.
2.
3.
4.
5.
Advisory Garden Brook Realty, 520 W Sheldon Street Suite 2A Prescott, AZ 86301
928-710-0020 Diann Dede Erceg928-227-2654
RESIDENTIAL LEASE AGREEMENT
Owners should protect themselves by taking the time to read the
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COMMON DOCUMENTS AND DISCLOSURES
residential lease agreement and understand their legal rights and
obligations before they enter into a lease agreement. A sample
Arizona Association of REALTORS® (AAR) lease agreement can be
found at:
MOVE-IN/MOVE-OUT INSPECTION
Upon move in, a lease owner must furnish the tenant with a move-
in form upon which the tenant can specify any existing damage to
the property, along with a written notification to the tenant that
the tenant may be present at the move-out inspection. Upon
request by the tenant, the lease owner shall notify the tenant
http://bit.ly/1GcMWZq
DISCLOSURES
The owner must disclose in writing all material (important) facts
regarding the property, including all physical, environmental, and
other conditions that affect the property and any violations of
applicable building, zoning, fire, health, and safety codes. Failure to
make legally required disclosures may result in civil liability.
sample RLOPDS can be found at:
The Arizona Department of Real Estate (ADRE) advises:
“Read the deed restrictions, also called CC&Rs (covenants,
conditions and restrictions). You might find some of the CC&Rs are
very strict.”
when the move-out inspection will occur. A.R.S. §33-1321(C). Lease
owners should keep a copy of the completed move-in form for
their records and may also want to take photographs of the
property at the time of move-in to document its condition. A
sample of AAR’s Move-in/Move-out Condition Checklist can be
viewed at:
LEAD-BASED PAINT DISCLOSURE FORM
If the home was built prior to 1978, the lease owner must provide
the tenant with a lead-based paint disclosure form. Information
about lead-based paint may be obtained at: http://bit.ly/1lewSUe
or www.epa.gov/lead/
PROPERTY MANAGEMENT AGREEMENT
Lease owners electing to retain the services of a property manager
should secure the retention by way of a written property
management agreement that complies with the requirements set
forth in A.R.S. §32-2173. A sample copy of AAR’s Property
Management Agreement can found at: http://bit.ly/1P40fWB
Changes in any disclosures previously made must be promptly
conveyed. Although no specific form is required, the Residential
Lease Owner’s Property Disclosure Statement (RLOPDS) can assist a
lease owner in complying with their disclosure obligations. By way
of this form, the lease owner answers a variety of questions about
the property and its condition. Once completed, a copy of the
disclosure form is given to prospective tenants. The property
manager/broker is not responsible for verifying the accuracy of the
items on the RLOPDS so it is important for the lease owner to
accurately complete this form to the best of their knowledge. A
http://bit.ly/1Sg09c6
.
In addition to CC&Rs, HOAs may be governed by Articles of
Incorporation, Bylaws, Rules and Regulations, and often
architectural control standards. Read and understand these
documents. Also, be aware that some HOAs may impose fees and
require the lease owner to register the tenant. If a lease owner has
questions about their rights and remedies regarding homeowners
associations or community associations, additional information can
be found at: http://bit.ly/1rCq9kd
Chapters 16 and 18 of the Arizona Revised Statutes - Title 33
www.azleg.state.az.us/ArizonaRevisedStatutes.asp?Title=33
.
http://bit.ly/1P41VPQ
SWIMMING POOLS & SPAS
Each city and county has its own swimming pool barrier ordinance
and a lease owner should investigate and comply with all
applicable state, county and municipal pool regulations. Pool
barrier contact information for Arizona cities and counties may be
found at:
Upon move in, a lease owner must furnish the tenant with a signed
copy of the lease. A.R.S. §33-1321(C).
1.
2.
3.
4.
HOMEOWNERS ASSOCIATION (HOA) GOVERNING
DOCUMENTS
If CC&Rs are recorded against the property, it is essential that the
owner review and agree to any restrictions prior to leasing a
property.
5.
or
6.
7.
www.aaronline.com/documents/pool_contacts.aspx .
The Arizona Department of Health Services Private Pool Safety
notice may be found at: http://azdhs.gov/phs/oeh/pool_rules.htm
The state law on swimming pools is located at:
www.azleg.state.az.us/ars/36/01681.htm
Page | 2 of 6 Arizona Association of REALTORS® Lease Owner’s Advisory (March 2016)
Advisory
NOTICE
Unless otherwise agreed, all notices shall be sent registered or
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LEASE OWNER’S RIGHTS AND OBLIGATIONS
certified mail, or personally delivered. A.R.S. §33-1313.
TERMINATION OF THE LEASE Unless the parties desire for the lease agreement to continue,
written notice of intent not to renew the lease agreement shall be
issued pursuant to the terms of the lease. If the lease continues on
a month-to-month basis, absent prior written agreement, either
the lease owner or the tenant may terminate by providing 30-days
QUALIFYING THE TENANT
The lease owner is encouraged to screen prospective tenants in a
variety of different ways, including credit, criminal history,
employment and rental history. A sample of AAR’s Application for
Occupancy can be found at:
pursuant to A.R.S §33-1321(G). The lease owner can subtract
written notice prior to the periodic rental date (i.e. the date on
which rent is due) per A.R.S. §33-1375(B).
A holdover tenant is someone who stays in the leased property
FAIR HOUSING & DISABILITY LAWS
The Fair Housing Act prohibits discrimination in the sale, rental,
people securing custody of children under the age of 18), and
http://www.1.usa.gov/1pbD5iW
one and one-half month’s rent. However, a tenant is not
prohibited from voluntarily paying more than one and one-half
During the term of the lease the lease owner or lease owner’s
agent should hold the security deposit for the tenant. At the end of
the lease all refundable deposits shall be refunded to the tenant
unpaid rent or repair costs from the security deposit. Within 14
receive an itemized list of any/all security deposit deductions
§33-1321(D).
repairs are made to keep the property in a fit and livable condition.
Following notice, the lease owner has five days to make any repairs
days to make any other requested repairs.
FORECLOSURE
The lease owner shall not allow the property to become the
subject of a trustee's sale and doing so may place the lease owner
in breach of the lease agreement and subject them to civil liability.
Within five (5) business days after receipt of a notice of trustee’s
sale, the lease owner shall provide the tenant with written notice.
and financing of dwellings based on race, color, national origin,
religion, sex, familial status (including children under the age of 18
living with parents or legal custodians, pregnant women, and
handicap (disability). Visit HUD’s Fair Housing/Equal Opportunity
website at:
DEPOSITS & FEES
The lease agreement should specify which deposits/fees are
refundable and which are not. A lease owner is not permitted to
demand security, including prepaid rent, in an amount in excess of
month’s rent in advance.
business days after termination of the tenancy, delivery of
possession and demand by the tenant, the tenant is entitled to
together with the amount due and payable to the tenant. A.R.S
REPAIRS & PROPERTY CONDITION
Pursuant to Arizona law, the lease owner is generally
responsible for ensuring that all “electrical, plumbing,
sanitary, heating, ventilating, air-conditioning and other
good and safe working order and condition. A.R.S. §33-1324. It is
the lease owner’s responsibility to make sure that necessary
that materially affect the health and safety of the tenant(s) and 10
ACCESS TO THE PROPERTY BY LEASE OWNER OR LEASE
OWNER’S REPRESENTATIVE
Unless the tenant requests repairs in writing, the lease owner must
give the tenant at least two days’ notice to enter the property
during reasonable hours to make repairs, conduct inspections,
have services completed or exhibit the property to prospective
purchasers and tenants. The lease owner has the right to
immediately enter the property in the event of an emergency or by
court order. A.R.S. §33-1343.
after the express term of the lease has expired. The lease owner
can choose to evict a holdover tenant or allow the tenant to
continue living in the property on a month-to-month basis under
the terms and conditions of the lease agreement.
A.R.S. 33-1331(B). A failure by the lease owner to pay the mortgage
does not eliminate the tenant’s obligation to pay rent.
1.
2.
or
http://bit.ly/21eHzag
For information on the Americans with Disabilities Act, or to file a
complaint, visit http://www.ada.gov/ada_intro.htm and
http://bit.ly/1lFBvaD
3.
4.
5.
NOTE: Pursuant to A.R.S. §33-1324(C), the lease owner and tenant
may agree in writing, supported by adequate consideration, that
the tenant will perform the lease owner’s duties to maintain a fit
premises and perform specified repairs.
6.
7.
8.
Page | 3 of 6 Arizona Association of REALTORS® Lease Owner’s Advisory (March 2016)
Advisory
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ADDITIONAL RESOURCES
LEASE OWNER’S RIGHTS AND OBLIGATIONS
(CONTINUED)
9. INSURANCE
Lease owners are encouraged to contact their property insurance
carrier prior to leasing to discuss appropriate coverage.
http://1.usa.gov/1it7SrE
INFORMATION ABOUT ARIZONA GOVERNMENT
Links to state agencies: www.az.gov
ARIZONA DEPARTMENT OF REAL ESTATE
Consumer Information: www.azre.gov/InfoFor/Consumers.aspx
ARIZONA ASSOCIATION OF REALTORS®
Find a REALTOR®: www.aaronline.com/
ENVIRONMENTAL CONCERNS
For information on indoor environmental concerns, the EPA
has a host of resource materials and pamphlets available at
www.epa.gov/iaq/pubs/index.html .
SECTION 8 HOUSING
Information regarding Section 8 programs available through
the Arizona Public Housing Authority can be found at:
http://1.usa.gov/1IbQTAh or http://findsection8housing.org/
DRUG LABS
Until remediation has been completed in the manner set
forth in A.R.S.§ 12-1000(E), meth labs and other dangerous
drug labs are prohibited from being rented or leased. A list
of unremediated properties can be found at:
https://btr.az.gov/drug-lab-site-clean
Page | 4 of 6 Arizona Association of REALTORS® Lease Owner’s Advisory (March 2016)
Advisory
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TOP 10 QUESTIONS YOU SHOULD ASK WHEN CONSIDERING HAVING YOUR
in a variety of different ways. You will therefore want to ensure
Does the property manager possess an Arizona real
Generally speaking, individuals acting as residential leasing agents
consent.
1.
.
PROPERTY PROFESSIONALLY MANAGED
estate license as required by Arizona law?
http://services.azre.gov/publicdatabase/
or on-site managers of residential rental property, who are
performing residential leasing activities on residential income
property at more than one location during the period of the
agents' or on-site managers' regular workday, are required to
maintain an Arizona real estate license. A.R.S. § 32-2121.
2. Does the brokerage with whom the property manager is
affiliated permit its agents to engage in property
management services?
Not all brokerages permit agents to engage in property
management services and an agent should not perform property
management activity without their broker's knowledge and
3. Does the brokerage with whom the property manager is
affiliated maintain a property management trust account,
and if so, is the account held with an FDIC insured
institution?
Arizona statute requires that all property management accounts be
designated as trust accounts and that a broker's trust account is
required for all of the owner's monies, except if the owner directs
the broker to deposit the monies into the owner's account. A.R.S.
§ 32-2174.
4. Does the brokerage with whom the property manager is
affiliated utilize a written property management agreement
that complies with the requirements set forth in A.R.S. §
32-2173?
Arizona statute mandates the material terms and conditions that
http://bit.ly/21cUGJ6
are to be set forth in all property management agreements. A.R.S.
§ 32-2173.
5. Does the property manager maintain written tenant
screening criteria that meet with your approval?
http://bit.ly/1lFBvaD
Property managers screen prospective tenants in a variety of
different ways, including credit, criminal history, employment and
rental history. You will want to ensure that your property manager
screens applicants in a manner you deem sufficient.
6. How often and by what method does the property
manager pay you and what account reconciliation methods
are utilized by the property manager?
Terms of this nature should be set forth in detail in your written
property management agreement and should meet with your
approval.
7. Does the property manager maintain a written plan to
market the property to potential tenants, and if so, does
that plan meet with your approval?
Property managers market rental properties to prospective tenants
that your property manager has a plan in place to secure tenants
and that the plan meets with your approval.
8. Does the property manager maintain a written plan for
addressing repairs and what level of approval/supervision,
if any, do you maintain over the manner in which repairs
are made?
You and the property manager should agree in writing to what
degree the property manager will assist you in the employment
and supervision of contractors. The parties should further agree in
writing whether you have the right to pre-approve expenditures in
excess of an agreed upon sum of money.
9. How does the property manager handle repairs in excess
of $1,000, and if the property manager hires contractors to
address those repairs, are the contractors licensed by the
Arizona Registrar of Contractors?
Generally speaking, Arizona statute requires that any person
engaging in any work or operation on one undertaking or project
by one or more contracts, for which the aggregate contract price,
including labor, materials and all other items (but excluding any
electrical fixture or appliance that was designed by the
manufacturer, that is unaltered) is $1,000 or more, hold an Arizona
contractor's license. A.R.S. § 32-1121.
10. Under what circumstances are you permitted to
terminate the property management agreement?
Property management agreements must specify a beginning and
ending date and contain cancellation provisions that are agreeable
to both parties. If the property management agreement contains
an automatic renewal provision, the property management firm
must send the lease owner a reminder notice at least 30-days
before the renewal date. A.R.S. § 32-2173.
Page | 5 of 6 Arizona Association of REALTORS® Lease Owner’s Advisory (March 2016)
Advisory
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Lease owner acknowledges receipt of all six pages of Lease Owner's Advisory
A Resource forReal Estate Consumers
Provided by the
this advisory. Lease owner further acknowledges that
there may be other disclosure issues of concern not
listed in this advisory. Lease owner is responsible for
making all necessary inquiries and consulting the
appropriate persons or entities prior to the leasing of
any property.
The information in this advisory is provided with the
understanding that it is not intended as legal or other
professional services or advice. These materials have
been prepared for general informational purposes
only. The information and links contained herein may
not be updated or revised for accuracy. If you have
any additional questions or need advice, please
contact your own lawyer or other professional
representative.
LEASE OWNER SIGNATURE DATE
LEASE OWNER SIGNATURE DATE
Page | 6 of 6 Arizona Association of REALTORS® Lease Owner’s Advisory (March 2016)
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Advisory
Document updated:
August 2009
The pre-printed portion of this form has been drafted by the Arizona Association of REALTORS®.
Any change in the pre-printed language of this form must be made in a prominent manner.
No representations are made as to the legal validity, adequacy and/or effects of any provision,
including tax consequences thereof. If you desire legal, tax or other professional advice, please
consult your attorney, tax advisor or professional consultant.
Market Conditions Advisory • Updated: August 2009
MARKET CONDITIONS ADVISORY
The real estate market is cyclical
The financial market also changes, affecting the terms on which a lenderwill agree to loan money on real property. It is impossible to accuratelypredict what the real estate or financial market conditions will be at anygiven time.
REAL SOLUTIONS. REALTOR® SUCCESS
and real estate values go up and down.
The ultimate decision on the price a Buyer is willing to pay and the price a Seller is willing toaccept for a specific property rests solely with the individual Buyer and Seller. The parties to
The parties must, upon careful deliberation, decide how much risk they are willing to assume ina transaction. Any waiver of contingencies, rights or warranties in the Contract may haveadverse consequences. Buyer and Seller acknowledge that they understand these risks.
Buyer and Seller assume all responsibility should the return on investment, tax consequences,credit effects, or financing terms not meet their expectations. The parties understand andagree that the Broker(s) do not provide advice on property as an investment. Broker(s) are notqualified to provide financial, legal, or tax advice regarding a real estate transaction. Therefore,
Broker(s) make no representation regarding the above items. Buyer and Seller are advised toobtain professional tax and legal advice regarding the advisability of entering into thistransaction.
THE UNDERSIGNED ACCEPT AND UNDERSTAND THE FOREGOING AND ACKNOWLEDGE
RECEIPT OF A COPY OF THIS ADVISORY.
^ BUYER'S SIGNATURE MO/DA/YR ^ BUYER'S SIGNATURE MO/DA/YR
^ SELLER'S SIGNATURE MO/DA/YR ^ SELLER'S SIGNATURE MO/DA/YR
Copyright © 2009 Arizona Association of REALTORS®. All rights reserved.
Phone: Fax:
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a real estate transaction must decide on what price and terms they are willing to buy or sell in
light of market conditions, their own financial resources and their own unique circumstances.
Garden Brook Realty
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Garden Brook Realty, 520 W Sheldon Street Suite 2A Prescott, AZ 86301928-710-0020 928-227-2654 Diann Dede Erceg
Advisory