Assigned to GOV FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR H.B. 2574
small land subdivision; requirements
Purpose
Allows the county board of supervisors (county BOS) of each county to adopt ordinances
and regulations that allow small land subdivisions of 6 to 10 lots or parcels for parcels that are 2
acres or more in size and not subject to an assured water supply requirement or a mandatory
adequate water supply requirement. Requires an applicant for small land subdivisions to submit a
small land subdivision report and notice. Prescribes disclosure requirements for small land
subdivisions and civil penalties for violations.
Background
A county BOS must approve any land divisions of 5 or fewer lots, parcels or fractional
interests, any of which is 10 acres or smaller in size, if the land division meets outlined
requirements, including that the: 1) lots, parcels or fractional interests each meet the minimum
applicable county zoning requirements of the applicable zoning designation; 2) applicant provides
a standard preliminary title report or other acceptable document that demonstrates legal access to
the lots, parcels or fractional interests; and 3) applicant provides an outlined statement regarding
whether each lot, parcel or fractional interest has physical access that is traversable by a two-wheel
drive passenger motor vehicle. Legal access is a public right of vehicular ingress and egress
between the lots, parcels or fractional interests being created (A.R.S. § 11-831).
A seller of 5 or fewer parcels of land, other than subdivided land, in an unincorporated area
of a county and any subsequent seller of such a parcel must furnish a written affidavit containing
answers to outlined questions relating to: 1) access to the property; 2) whether water, water
treatment, water delivery, sewage and other services are provided to the property; 3) property
zoning requirements, inspections and tests; 4) whether the property is located in outlined military
territory or Federal Emergency Management Area-designated floodplains; and 5) whether the use
of the property is limited in any way relating to an encumbrance. The affidavit must be furnished
to the buyer at least seven days before the transfer of the property and the buyer must acknowledge
receipt of the affidavit. The seller must record the executed affidavit at the same time that the deed
is recorded, and the county recorder is not required to verify the accuracy of any statement in the
affidavit. A subsequently recorded affidavit supersedes any previous affidavit (A.R.S. § 33-422).
A person who proposes to offer subdivided lands for sale or lease in an active management
area (AMA) must apply for and obtain a certificate of assured water supply from the Director of
the Arizona Department of Water Resources (ADWR) before presenting the plat for approval and
before filing with the State Real Estate Commissioner (Commissioner) a notice of intention to
offer such lands for sale or lease.
FACT SHEET
H.B. 2574
Page 2
In areas outside of AMAs, the developer of a proposed subdivision, regardless of
subdivided lot size, prior to recordation of the plat, must submit plans for the water supply for the
subdivision and demonstrate the adequacy of the water supply to meet the needs projected by the
developer to the Director of ADWR. The Director of ADWR must evaluate the proposed source
of water for the subdivision to determine whether there is an adequate water supply and forward a
copy of the report to the Commissioner (A.R.S. §§ 45-576 and 45-108).
On examination of a subdivision, the Commissioner, unless there are grounds for denial,
must issue, to the subdivider, a public report authorizing the sale or lease of the lots, parcels or
fractional interest within the subdivision, containing data obtained through a notice of intention to
subdivide lands and any other information that the Commissioner determines is necessary (A.R.S.
§§ 32-2101 and 32-2183).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
County Authorization
1. Allows the county BOS of each county to adopt ordinances and regulations that allow small
land subdivisions of 6 to 10 lots or parcels that are two acres or more in size and not subject to
an assured water supply requirement or a mandatory adequate water supply requirement.
2. Requires a county to require an applicant for a small land subdivision to submit a small land
subdivision report.
3. Directs a county to require an applicant for a small land subdivision to ensure that each lot or
parcel that is part of the small land subdivision has legal access.
4. Requires the county BOS of a county that authorizes the use of small land subdivisions to
provide written notice of the authorizing ordinance or regulation to Arizona Department of
Real Estate (ADRE).
Small Land Subdivision Requirements and Violations
5. Requires a small land subdivider, before offering land within a small land subdivision for sale
or lease, to notify the Commissioner in writing of the small land subdivider's intention.
6. Specifies that the small land subdivision public report notice (notice) must contain:
a) the name and address of the owner and small land subdivider, if different from the owner;
b) if the holder of any ownership interest in the land is a legal entity other than an individual,
such as a corporation, partnership or trust, a statement naming the type of legal entity and
listing the interest and the extent of any interest of each principal in the entity;
c) a survey of the land that is the subject of the proposed small land subdivision and the legal
description and area of the land; and
d) true statements as prescribed in the required affidavit of disclosure for the sale of parcels
of land in an unincorporated area. FACT SHEET
H.B. 2574
Page 3
7. Defines principal, for the purposes of the small land subdivision notice, as any person or entity
that has a 10 percent or more financial interest or, if the legal entity is a trust, each beneficiary
of the trust that holds a 10 percent or more beneficial interest.
8. Requires the Commissioner, on receipt of a report and unless there are grounds for denial, to
ensure completeness and issue a registration of the small land subdivision public report to the
small land subdivider allowing the sale or lease in Arizona of the lot or parcels that are the
subject of the small land subdivision.
9. Modifies the affidavit of disclosure for the sale of parcels of land in an unincorporated area to
add a:
a) question regarding whether a portion or all of the property is located in a no-fence district; and
b) statement that it is the property owner's responsibility to fence out unwanted livestock using
a lawful fence if the property is not located in a no-fence area.
10. Specifies that the requirements relating to the disclosure of the nature of a document and
delivery of the document apply to the delivery of an approved small land subdivision public
report.
11. Allows ADRE to assess a civil penalty for each prescribed violation, in addition to, and not
limited to, a buyer's ability to seek recourse against a small land subdivider in a court of
competent jurisdiction for any civil liability.
12. Subjects a small land subdivider that sells or leases any lots or parcels in a small land
subdivision in Arizona without first obtaining a registration of a small land subdivision public
report from the Commissioner and on an order issued by the Commissioner to a civil penalty,
after a hearing, in an amount up to $5,000 for each infraction.
13. Requires a proceeding to impose a civil penalty or suspend or revoke a license for a violation
relating to selling or leasing lots or parcels without obtaining proper registration or any rule
adopted or order issued by the Commissioner to be commenced within five years after actual
discovery by ADRE or discovery that should have occurred with the exercise of reasonable
diligence by ADRE.
14. Requires the developer of a proposed subdivision, prior to recordation of a proposed small land
subdivision, to submit plans for the water supply for the small land subdivision and
demonstrate the adequacy of the water supply to meet the needs projected by the developer to
the Director of ADWR.
15. Requires the Director of ADWR to evaluate the proposed source of water for a small land
subdivision to determine whether there is an adequate water supply.
Miscellaneous
16. Defines small land subdivision as improved or unimproved land or lands divided or proposed
to be divided for the purpose of sale or lease, whether immediate or future, within a 10-year
period into 6 to 10 lots or parcels in a county that has authorized the use of small land
subdivisions. FACT SHEET
H.B. 2574
Page 4
17. Defines small land subdivision public report as a written notice and disclosure submitted to
the Commissioner.
18. Defines small land subdivider as a person who:
a) offers, for sale or lease, 6 to 10 lots or parcels in a small land subdivision;
b) causes land to be divided into a small land subdivision for either the person who causes the
land to be divided or for others; or
c) undertakes to develop a small land subdivision.
19. Redefines subdivision or subdivided lands to include improved or unimproved land or lands
divided or proposed to be divided for the purpose of sale or lease, whether immediate or future,
into:
a) in a county that has not authorized the use of small land subdivisions, 6 or more lots, parcels
or fractional interests; or
b) in a county that has authorized the use of small land subdivisions, 11 or more lots or parcels.
20. Makes technical and conforming changes.
21. Becomes effective on the general effective date.
House Action
NREW 2/18/25 DPA 5-4-0-1
3
rd
Read 3/11/25 31-26-3
Prepared by Senate Research
March 24, 2025
AN/SDR/slp