Arizona Department of Real Estate (ADRE) has been receiving complaints from developers concerning licensees representing Sellers of properties with deed restrictions. The complaints involve situations where the new sale is less than a year after the original purchase, and in some cases less than three months after the original purchase.
Licensees involved in these situations may be in violation of the following statutes and rules and may be subject to disciplinary action by the Department:
- A.R.S. § 32-2153(A)(1)
- A.R.S. § 32-2153(A)(4)
- A.R.S. § 32-2153(A)(11)
- A.R.S. § 32-2153(B)(3)
- A.R.S. § 32-2153(B)(5)
A.R.S. § 32-2153(A)(3) provides that the Commissioner may take disciplinary action against a licensee who violates any of the Commissioner's Rules (A.A.C.). The following Commissioner's rules may also apply to these listings:
- A.A.C. R4-28-1101(A)
- A.A.C. R4-28-1101(B)
- A.A.C. R4-28-1101(B)(3)
- A.A.C. R4-28-1101(G)
- A.A.C. R4-28-1101(I)
Licensees taking listings in new developments would be well advised to confirm whether such a limitation on resale exists prior to taking a listing and actively marketing the property. Buyer Agents should also verify whether or not a a property in a newer developed subdivision is subect to this type of deed restriction prior to submitting a purchase offer that may fall through.
Although ADRE does not enforce contracts, per se, these situations clearly fall within the scope of several statutes and rules and may fall within the scope of others, as indicated above.
Developers will continue reporting such listings, and ADRE will investigate the complaints. The wise agent will avoid becoming involved in these situations, both for their own sake and the sake of the client who may end up in civil litigation.
Source: Tom Adams, Director of Regulation, ADRE
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