Did you miss an update? Visit the archives.

Update for SEPTEMBER 2012


Earlier this month, the Arizona Department of Real Estate (ADRE) released the disciplinary actions that occurred from September 1, 2011 through June 30, 2012. There were a total of 383 violations (individual and brokerage) with the majority of the violations (120) being the failure to complete the Continuing Education (CE) requirements on a timely basis. CE credits must be reported to the ADRE every two years. For more information on CE reporting, go to: http://www.azre.gov/Edu/StudentFaqs.aspx#FAQ15

The second most cited violation (78) was the “failure to timely disclose” misdemeanors, criminal convictions, adverse judgments or disciplinary action. A licensee must submit a written disclosure to the ADRE within 10 business days of a conviction, adverse judgment or disciplinary action. Proper documentation must be submitted and can be found athttp://www.azre.gov/Lic/Forms/Form_LI-214-LI-244_Disciplinary_Actions_Disclosure.pdf and http://www.azre.gov/Lic/Forms/Form_LI-400_Disclosure_Document_Checklist.pdfNote:Arrests are not required to be reported.

The following is a compiled list of the remaining violations reported:   
Unlicensed activity: 50; Trust account deficiency: 37 (25 during audit); Felony convictions: 26; Failure to properly supervise (leading to unlicensed activity): 24; Working in concert – divided and conveyed land: 19; Received compensation from non-employing broker: 5; Misrepresentation of client’s monies: 4; Property Management violations: 4; Audit violations (non-trust account): 3; Incomplete records, misrepresentation: 3; Failed to comply with 14-day notice: 3; Failed to uphold duty to client: 2; Failed to comply with order from the Department of Fire, Building and Life Safety (DFBLS): 1; Action taken by California Department of Real Estate: 1; Consent Order with Arizona Department of Financial Institutions (AZDFI): 1; Revocation of contractor license: 1; Expired corporation: 1.

A detailed list of the violations can be found in the ADRE Bulletin at:


Upon a breach of a real estate contract, the party seeking relief generally has one or all of the following remedies, unless the remedy is specifically limited in the contract. (1) Cancellation:A contract may be cancelled for a material breach, misrepresentation or fraud. To justify cancellation, the breach generally must relate to a vital contract provision. Cancellation is generally not warranted for a breach of a minor contract provision that can be rectified by monetary damages. (2) Actual Damages:  The amount and type of damages will depend upon the circumstances and the specific breach.  Generally, emotional distress damages will not be awarded for breach of contract.  Similarly, punitive damages, which are damages designed to punish, are seldom awarded.  However, a damage award usually will include interest and an award of attorney’s fees to the prevailing party.
(3) Liquidated damages:  Liquidated damages is the term used when a specific sum of money has been agreed upon in the contract as the amount of damages to be recovered in the event of a breach. A liquidated damages clause that fixes an unreasonably large sum for damages is unenforceable because it will be deemed to be a penalty.
(4) Specific Performance:  Specific performance is an available remedy if a seller breaches by refusing to close the transaction and transfer title to the property.  Before ordering specific performance, the court will generally require evidence that the buyer was ready, willing and able to perform. However, specific performance is never a matter of absolute right, and a court has wide discretion in determining whether damages are an adequate remedy.

Remedies in the AAR Residential Contract

The AAR Residential Contract remedies section sets forth the parties’ rights and obligations in the event of a breach of contract. First, a party is given an opportunity to cure a potential breach of contract. If a non-compliance is not cured within three days after delivery of a notice, the failure to comply becomes a breach of contract. In the event of a breach, the contract allows for any of the remedies discussed above, depending on the type of breach.  However, before litigating a breach of contract, the parties must attempt to resolve the dispute through mediation.  If mediation does not resolve the dispute, the unresolved dispute must be submitted to binding arbitration unless either party opts out within thirty days after the conclusion of the mediation conference by notice to the other.

Finding a Qualified Mediator or Arbitrator for Buyer/Seller Disputes

On its website, AAR has all the information that a buyer or seller needs to initiate a mediation or arbitration, along with a list of qualified attorneys that are a part of AAR’s Buyer-Seller Dispute Resolution Program:  https://www.aaronline.com/Disputes/BuyerSeller.aspx. For more information, contact Christina Smalls at christinasmalls@aaronline.com.


AAR has just completed an agreement for Arizona REALTORS® to purchase a full complement of commercial real estate forms from the AIR Commercial Real Estate Association (AIR) at a steep discount.  AIR forms have been “localized” for Arizona law and are used by commercial agents and brokers across Arizona.

Where to Find AIR Forms

Sample AIR forms can viewed at http://www.airea.com/FORMS/SampleForms.aspx. Please note that these forms are “generic,”  not the Arizona-specific forms.  To review the Arizona forms, you need to install an application found here:  http://www.airea.com/FORMS/DownloadPurchaseForms.aspx?v=1&s=AZ. After the application is installed, you may review every AIR form and even print it with the word “DRAFT” across the form.  If you want to actually use the form without “DRAFT,” you must use AIR tokens. Depending on complexity, each AIR form costs zero to eight tokens.

How to Buy AIR Forms and Tokens

Typically, agents would be charged $399 for AIR forms (with 200 tokens).  As noted earlier, each form has a certain number of tokens associated with it ranging from zero to eight, depending on the complexity of the form.  All lease and purchase agreements are eight-token forms.  A user can create and modify as many “DRAFT” versions of a form as desired, only being charged the appropriate tokens once a “FINAL” copy is created.  New tokens are issued at $.50 each, with a minimum purchase of 100 tokens.
To get started, AAR members may choose from five different discounted pricing tiers:
$299 (200 tokens included); $199 (155 tokens included); $99 (100 tokens included); $49 (40 tokens included); $24 (15 tokens included)
To purchase a starter package or additional tokens, AAR members should call 866-946-2472. You will need your NRDS number to validate your REALTOR® membership.


The following Broker Manager Clinic (BMC) requirements go into effect on January 1, 2013:  Each real estate designated broker (DB) and delegated associate broker (DAB) with duties authorized in writing pursuant to A.R.S. §32-2151.01(G) to act on the designated broker’s behalf to review and initial contracts or similar instruments, shall complete a BMC consisting of nine (9) credit hours (three (3) courses of three (3) hours each). This brings the total renewal credit hours required for these licensees to 30 per 24-month license period.
If you are within your two-year renewal period you are eligible to fulfill your BMC requirement by taking a three-hour clinic through December 31, 2012. To view the new BMC course FAQs, go to http://www.azre.gov/Edu/StudentFaqs.aspx and to view a list of requirements in Substantive Policy Statement 2012.01, go to http://www.azre.gov/LawBook/Documents/SPS_Documents/SPS_2012.01_BMC_Course_Instructor_Requirements.pdf
AAR has three scheduled BMC courses coming up – follow this link to register:www.regonline.com/bmc2012 


Learn how to use Arizona Real Estate: A Professional’s Guide to Law & Practice by watching this two minute video: www.youtube.com/watch?v=6VBZ855KCfg.  The ebook searchable format is available at  https://www.aaronline.com/azre-book (or Amazon, iBookstore, Barnes & Noble). Traditional print books are available for order from the same webpage ($21.99 + shipping) and at most local associations and real estate schools.


AAR offers Spanish translation forms and AdvisoriesAAR’s most commonly used residential transaction forms, along with the Buyer Advisory and Short Sale Seller Advisory, have been translated into Spanish to help you assist your Spanish-speaking clients.

Get the forms at: www.aaronline.com/spanish.

Note: These forms are only to be used as translation tools not as actual transaction documents.


AAR has established a category on its blog specifically for short sales (https://blog.aaronline.com/category/short-sales/ ) and is seeking member participation to help grow this category into a great resource for the membership. Your contributions of articles, informational pieces and resources will create an interactive venue for members seeking information about short sales. Please send resources, articles and questions to JanSteward@aaronline.com.


The AAR Legal Hotline is a valuable member benefit for brokers needing legal information. Approximately 3,500 members have access to the Hotline and the Hotline attorneys do their best to answer your questions in a timely manner. You can help by:

  • Emailing or faxing your questions if you don’t need an immediate response.
  • Writing your questions down before calling the Hotline. Understand what you are asking and why.
  • Limiting your questions to those topics under “permissible topics.”
  • Asking only one question per call.

AAR and the Legal Hotline attorneys want the Hotline to continue to be an effective membership tool and are constantly working to achieve that goal.   To sign up for the Hotline, go to: https://www.aaronline.com/documents/hotline_access.pdf


Please encourage the rookie agents in your office to visit aaronline.com/startsmart. This page is full of resources for new REALTORS®, including a video series that walks them through some of the most important tasks of their first 60 days in the business. This is also a great resource for more experienced REALTORS® looking to get back to basics. In this installment, AAR President Holly Mabery talks about working with sellers.


Would you like to discuss risk management issues, arbitrations or alternative dispute resolutions at your next management or agent meeting? AAR’s Professional Standards Department staff is visiting offices around the state. Contact JanSteward@aaronline.com or CaroleRidley@aaronline.com to schedule a time for them to speak at a future office meeting.


Encourage agents to subscribe to the print Arizona REALTOR® Quarterly.  For just $28, agents get the best of the AAR monthly online magazine content delivered to their mailbox four times a year.  Subscribe today! Note: Designated brokers receive a complimentary subscription to the quarterly.


If you would like your office manager(s) to receive this newsletter please contact Christina Smalls at christinasmalls@aaronline.com with the names and email addresses of your manager(s).

About the Author

Michelle Lind

K. Michelle Lind, CEO of Arizona REALTORS®, is also an attorney, State Bar of Arizona board certified real estate specialist, and the author of Arizona Real Estate: A Professional’s Guide to Law and Practice.
Please note that this article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.