REFERENCE TITLE: timeshare salespersons; licensure State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025 HB 2624 Introduced by Representative Weninger AN ACT Amending sections 32-2101, 32-2122, 32-2124, 32-2125.01 and 32-2130, Arizona Revised Statutes; amending title 32, chapter 20, article 2, Arizona Revised Statutes, by adding section 32-2134.02; amending section 32-2153, Arizona Revised Statutes; relating to real estate. (TEXT OF BILL BEGINS ON NEXT PAGE)
REFERENCE TITLE: timeshare salespersons; licensure
State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025
HB 2624
Introduced by Representative Weninger
REFERENCE TITLE: timeshare salespersons; licensure
State of Arizona
House of Representatives
Fifty-seventh Legislature
First Regular Session
2025
HB 2624
Introduced by
Representative Weninger
AN ACT
Amending sections 32-2101, 32-2122, 32-2124, 32-2125.01 and 32-2130, Arizona Revised Statutes; amending title 32, chapter 20, article 2, Arizona Revised Statutes, by adding section 32-2134.02; amending section 32-2153, Arizona Revised Statutes; relating to real estate.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Section 32-2101, Arizona Revised Statutes, is amended to read: START_STATUTE32-2101. Definitions In this chapter, unless the context otherwise requires: 1. "Acting in concert" means evidence of collaborating to pursue a concerted plan. 2. "Address of record" means any of the following: (a) The address where a licensee practices or is otherwise employed. (b) A licensee's residential address. (c) The address of a licensee's statutory agency who is registered as the licensee's statutory agent with the corporation commission. This subdivision applies only if notice of the statutory agent is given to the department pursuant to section 32-2126. 3. "Advertising" means attempting by publication, dissemination, exhibition, solicitation or circulation, oral or written, or for broadcast on radio or television to induce directly or indirectly any person to enter into any obligation or acquire any title or interest in lands subject to this chapter, including the land sales contract to be used and any photographs, drawings or artist's presentations of physical conditions or facilities existing or to exist on the property. Advertising does not include: (a) Press releases or other communications delivered to newspapers, periodicals or other news media for general information or public relations purposes if no charge is made by the newspapers, periodicals or other news media to publish or use any part of these communications. (b) Communications to stockholders as follows: (i) Annual reports and interim financial reports. (ii) Proxy materials. (iii) Registration statements. (iv) Securities prospectuses. (v) Applications for listing of securities on stock exchanges. (vi) Prospectuses. (vii) Property reports. (viii) Offering statements. 4. "Affiliate" means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person specified. 5. "Associate broker" means a licensed broker who is employed by another broker. Unless otherwise specifically provided, an associate broker has the same license privileges as a salesperson. 6. "Barrier" means a natural or man-made geographic feature that prevents parcels of land from being practicably, reasonably and economically united or reunited and that was not caused or created by the owner of the parcels. 7. "Blanket encumbrance": (a) Means either: (i) Any mortgage, any deed of trust or any other encumbrance or lien that secures or evidences the payment of monies and that affects more than one lot or parcel of subdivided land. (ii) An agreement that affects more than one lot or parcel by which the subdivider holds the subdivision under an option, contract to sell or trust agreement. (b) Does not include taxes and assessments that are levied by public authority. 8. "Board" means the real estate advisory board. 9. "Broker", when used without modification, means a person who is licensed as a broker under this chapter or who is required to be licensed as a broker under this chapter. 10. "Business broker" means a real estate broker who acts as an intermediary or agent between sellers or buyers, or both, in the sale or purchase, or both, of businesses or business opportunities where a lease or sale of real property is either a direct or incidental part of the transaction. 11. "Camping site" means a space that is designed and promoted for the purpose of locating any trailer, tent, tent trailer, pickup camper or other similar device used for camping. 12. "Cemetery" or "cemetery property" means any one, or a combination of more than one, of the following in a place that is used, or intended to be used, and dedicated for cemetery purposes: (a) A burial park, for earth interments. (b) A mausoleum, for crypt or vault entombments. (c) A crematory, or a crematory and columbarium, for cinerary interments. (d) A cemetery plot, including interment rights, mausoleum crypts, niches and burial spaces. 13. "Cemetery broker" means a person other than a real estate broker or real estate salesperson who, for another, for compensation: (a) Sells, leases or exchanges cemetery property or interment services of or for another, or on the person's own account. (b) Offers for another or for the person's own account to buy, sell, lease or exchange cemetery property or interment services. (c) Negotiates the purchase and sale, lease or exchange of cemetery property or interment services. (d) Negotiates the purchase or sale, lease or exchange, or lists or solicits, or negotiates a loan on or leasing of cemetery property or interment services. 14. "Cemetery salesperson" means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation engaged by or on behalf of a licensed cemetery or real estate broker, or through and on behalf of a corporation, partnership or limited liability company that is licensed as a cemetery or real estate broker, to perform any act or transaction included in the definition of cemetery broker. 15. "Commissioner" means the state real estate commissioner. 16. "Common promotional plan" means a plan, undertaken by a person or a group of persons acting in concert, to offer lots for sale or lease. If the land is offered for sale by a person or group of persons acting in concert, and the land is contiguous or is known, designated or advertised as a common unit or by a common name, the land is presumed, without regard to the number of lots covered by each individual offering, as being offered for sale or lease as part of a common promotional plan. Separate subdividers selling lots or parcels in separately platted subdivisions within a master planned community shall not be deemed to be offering their combined lots for sale or lease as part of a common promotional plan. 17. "Compensation" means any fee, commission, salary, monies or other valuable consideration for services rendered or to be rendered as well as the promise of consideration whether contingent or not. 18. "Contiguous": (a) Means lots, parcels or fractional interests that share a common boundary or point. (b) Does not include lots, parcels or fractional interests that are separated by either of the following: (i) A barrier. (ii) A road, street or highway that has been established by this state or by any agency or political subdivision of this state, that has been designated by the federal government as an interstate highway or that has been regularly maintained by this state or by any agency or political subdivision of this state and has been used continuously by the public for at least the last five years. 19. "Control" or "controlled" means a person who, through ownership, voting rights, power of attorney, proxy, management rights, operational rights or other rights, has the right to make decisions binding on an entity, whether a corporation, a partnership or any other entity. 20. "Corporation licensee" means a lawfully organized corporation that is registered with the corporation commission and that has an officer licensed as the designated broker pursuant to section 32-2125. 21. "Department" means the state real estate department. 22. "Designated broker" means a natural person who is licensed as a broker under this chapter and who is either: (a) Designated to act on behalf of an employing real estate, cemetery or membership camping entity. (b) Doing business as a sole proprietor. 23. "Developer": (a) Means a person who offers real property in a development for sale, lease or use, either immediately or in the future, on the person's own behalf or on behalf of another person, under this chapter. (b) Does not include a person whose involvement with a development is limited to listing property within the development for sale, lease or use. 24. "Development" means any division, proposed division or use of real property that the department has authority to regulate, including subdivided and unsubdivided lands, cemeteries, condominiums, timeshares, membership campgrounds and stock cooperatives. 25. "Distance learning" means continuing education or prelicensure education that is an online, planned learning experience with a geographic separation that may be synchronous or asynchronous, that does not require real-time interaction between a student and an instructor and that uses a platform with self-paced or prerecorded lessons and materials that a student can access via the internet to proceed at the student's own pace. 26. "Employing broker" means a person who is licensed or is required to be licensed as a: (a) Broker entity pursuant to section 32-2125, subsection A. (b) Sole proprietorship if the sole proprietor is a broker licensed pursuant to this chapter. 27. "Fractional interest" means an undivided interest in improved or unimproved land, lots or parcels of any size created for the purpose of sale or lease and evidenced by any receipt, certificate, deed or other document conveying the interest. Undivided interests in land, lots or parcels created in the names of a husband and wife as community property, joint tenants or tenants in common, or in the names of other persons who, acting together as part of a single transaction, acquire the interests without a purpose to divide the interests for present or future sale or lease shall be deemed to constitute only one fractional interest. 28. "Improved lot or parcel" means a lot or parcel of a subdivision on which there is a residential, commercial or industrial building or concerning which a contract has been entered into between a subdivider and a purchaser that obligates the subdivider directly, or indirectly through a building contractor, to completely construct a residential, commercial or industrial building on the lot or parcel within two years after the date on which the contract of sale for the lot is entered into, or for a condominium as defined in section 33-1202, within four years after the date on which the contract for sale is entered into. 29. "Inactive license" means a license that is issued pursuant to article 2 of this chapter to a licensee who is on inactive status during the current license period and who is not engaged by or on behalf of a broker. 30. "Lease" or "leasing" includes any lease, whether it is the sole, the principal or any incidental part of a transaction. 31. "License" means the whole or part of any agency permit, certificate, approval, registration, public report, charter or similar form of permission required by this chapter. 32. "Licensee" means a person to whom a license for the current license period has been granted under any provision of this chapter, and, for the purposes of section 32-2153, subsection A, includes original license applicants. 33. "License period" means the two-year period beginning with the date of original issue or renewal of a particular license and ending on the expiration date, if any. 34. "Limited liability company licensee" means a lawfully organized limited liability company that has a member or manager who is a natural person and who is licensed as the designated broker pursuant to section 32-2125. 35. "Live classroom course" means a course or instructional segment delivered in either an in-person classroom instructional format or a synchronous remote instructional format that allows students to observe and participate remotely in an instructional segment via livestreaming. 36. "Lot reservation" means an expression of interest by a prospective purchaser in buying at some time in the future a subdivided or unsubdivided lot, unit or parcel in this state. In all cases, a subsequent affirmative action by the prospective purchaser must be taken to create a contractual obligation to purchase. 37. "Master planned community" means a development that consists of two or more separately platted subdivisions and that is either subject to a master declaration of covenants, conditions or restrictions, is subject to restrictive covenants sufficiently uniform in character to clearly indicate a general scheme for improving or developing real property or is governed or administered by a master owner's association. 38. "Member" means a member of the real estate advisory board. 39. "Membership camping broker" means a person, other than a salesperson, who, for compensation: (a) Sells, purchases, lists, exchanges or leases membership camping contracts. (b) Offers to sell, purchase, exchange or lease membership camping contracts. (c) Negotiates or offers, attempts or agrees to negotiate the sale, purchase, exchange or lease of membership camping contracts. (d) Advertises or holds himself out as being engaged in the business of selling, buying, exchanging or leasing membership camping contracts or counseling or advising regarding membership camping contracts. (e) Assists or directs in procuring prospects calculated or intended to result in the sale, purchase, listing, exchange or lease of membership camping contracts. (f) Performs any of the foregoing acts as an employee or on behalf of a membership camping operator or membership contract owner. 40. "Membership camping contract" means an agreement that is offered or sold in this state evidencing a purchaser's right or license to use the camping or outdoor recreation facilities of a membership camping operator and includes a membership that provides for this use. 41. "Membership camping operator": (a) Means an enterprise, other than one that is tax exempt under section 501(c)(3) of the internal revenue code of 1986, as amended, that solicits membership paid for by a fee or periodic payments and has as one of its purposes camping or outdoor recreation, including the use of camping sites primarily by members. (b) Does not include camping or recreational trailer parks that are open to the general public and that contain camping sites rented for a per use fee or a mobile home park. 42. "Membership camping salesperson" means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation engaged by or on behalf of a licensed membership camping or real estate broker, or by or on behalf of a corporation, partnership or limited liability company that is licensed as a membership camping or real estate broker, to perform any act or participate in any transaction in a manner included in the definition of membership camping broker. 43. "Partnership licensee" means a partnership with a managing general partner who is licensed as the designated broker pursuant to section 32-2125. 44. "Permanent access", as required under article 4 of this chapter, means permanent access from the subdivision to any federal, state or county highway. 45. "Perpetual care" or "endowed care": (a) Means maintaining and caring, in all places where interments have been made, for the trees, shrubs, roads, streets and other improvements and embellishments contained within or forming a part of the cemetery. (b) Does not include maintaining or repairing monuments, tombs, copings or other man-made ornaments as associated with individual burial spaces. 46. "Perpetual or endowed-care cemetery" means a cemetery in which lots or other burial spaces are sold or transferred under the representation that the cemetery will receive perpetual care or endowed care free of further cost to the purchaser after payment of the original purchase price for the lot, burial space or interment right. 47. "Person" means any individual, corporation, partnership or company and any other form of multiple organization for carrying on business, foreign or domestic. 48. "Private cemetery" means a cemetery or place that is not licensed under article 6 of this chapter, where burials or interments of human remains are made, in which sales or transfers of interment rights or burial plots are not made to the public and in which not more than ten interments or burials occur annually. 49. "Promotion" or "promotional practice" means advertising and any other act, practice, device or scheme to induce directly or indirectly any person to enter into any obligation or acquire any title or interest in or use of real property subject to this chapter, including meetings with prospective purchasers, arrangements for prospective purchasers to visit real property, travel allowances and discount, exchange, refund and cancellation privileges. 50. "Real estate" includes leasehold-interests and any estates in land as defined in title 33, chapter 2, articles 1 and 2, regardless of whether located in this state. 51. "Real estate broker" means a person, other than a salesperson, who, for another and for compensation: (a) Sells, exchanges, purchases, rents or leases real estate, businesses and business opportunities or timeshare interests. (b) Offers to sell, exchange, purchase, rent or lease real estate, businesses and business opportunities or timeshare interests. (c) Negotiates or offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of real estate, businesses and business opportunities or timeshare interests. (d) Lists or offers, attempts or agrees to list real estate, businesses and business opportunities or timeshare interests for sale, lease or exchange. (e) Auctions or offers, attempts or agrees to auction real estate, businesses and business opportunities or timeshare interests. (f) Buys, sells, offers to buy or sell or otherwise deals in options on real estate, businesses and business opportunities or timeshare interests or improvements to real estate, businesses and business opportunities or timeshare interests. (g) Collects or offers, attempts or agrees to collect rent for the use of real estate, businesses and business opportunities or timeshare interests. This subdivision does not apply to a person who is not a licensee, who works for a real estate broker or a real estate salesperson, who collects in-person rent and related fees on behalf of the real estate broker or real estate salesperson for the use of real estate as part of the person's clerical duties and who provides a receipt when rent is paid. (h) Advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting or leasing real estate, businesses and business opportunities or timeshare interests or counseling or advising regarding real estate, businesses and business opportunities or timeshare interests. (i) Assists or directs in procuring prospects that are calculated to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests. (j) Assists or directs in negotiating any transaction calculated or intended to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests. (k) Incident to the sale of real estate, businesses and business opportunities negotiates or offers, attempts or agrees to negotiate a loan secured or to be secured by any mortgage or other encumbrance on or transfer of real estate, businesses and business opportunities or timeshare interests subject to section 32-2155, subsection D. This subdivision does not apply to mortgage brokers as defined in and subject to title 6, chapter 9, article 1. (l) Engages in the business of assisting or offering to assist another in filing an application for the purchase or lease of, or in locating or entering on, lands owned by the state or federal government. (m) Claims, demands, charges, receives, collects or contracts to collect an advance fee in connection with any employment enumerated in this section, including employment undertaken to promote the sale or lease of real property by advance fee listing, by furnishing rental information to a prospective tenant for a fee paid by the prospective tenant, by advertising or by any other offering to sell, lease, exchange or rent real property or selling kits connected therewith. This does not include the activities of any communications media of general circulation or coverage not primarily engaged in advertising real estate or any communications media activities that are specifically exempt from applicability of this article under section 32-2121. (n) Engages in any of the acts listed in subdivisions (a) through (m) of this paragraph for the sale or lease of other than real property if a real property sale or lease is a part of, contingent on or ancillary to the transaction. (o) Performs any of the acts listed in subdivisions (a) through (m) of this paragraph as an employee of, or in behalf of, the owner of real estate, or interest in the real estate, or improvements affixed on the real estate, for compensation. (p) Acts as a business broker. 52. "Real estate sales contract" means an agreement in which one party agrees to convey title to real estate to another party on the satisfaction of specified conditions set forth in the contract. 53. "Real estate salesperson" means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation engaged by or on behalf of a licensed real estate broker, or by or on behalf of a limited liability company, partnership or corporation that is licensed as a real estate broker, to perform any act or participate in any transaction in a manner included in the definition of real estate broker subject to section 32-2155. 54. "Sale" or "lease" includes every disposition, transfer, option or offer or attempt to dispose of or transfer real property, or an interest, use or estate in the real property, including offering the property as a prize or gift if a monetary charge or consideration for whatever purpose is required. 55. "Salesperson", when used without modification, means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation licensed under this chapter or any person required to be licensed as a salesperson under this chapter. 56. "School" means a person or entity that offers a course of study toward completion of the education requirements leading to licensure or renewal of licensure under this chapter. 57. "Stock cooperative" means a corporation to which all of the following apply: (a) The corporation is formed or used to hold title to improved real property in fee simple or for a term of years. (b) All or substantially all of the shareholders of the corporation each receive a right of exclusive occupancy in a portion of the real property to which the corporation holds title. (c) The right of occupancy may only be transferred with the concurrent transfer of the shares of stock in the corporation held by the person having the right of occupancy. 58. "Subdivider": (a) Means any person who offers for sale or lease six or more lots, parcels or fractional interests in a subdivision or who causes land to be subdivided into a subdivision for the subdivider or for others, or who undertakes to develop a subdivision. (b) Does not include a public agency or officer authorized by law to create subdivisions. 59. "Subdivision" or "subdivided lands": (a) Means improved or unimproved land or lands divided or proposed to be divided for the purpose of sale or lease, whether immediate or future, into six or more lots, parcels or fractional interests. (b) Includes a stock cooperative, lands divided or proposed to be divided as part of a common promotional plan and residential condominiums as defined in title 33, chapter 9. (c) Does not include: (i) Leasehold offerings of one year or less. (ii) The division or proposed division of land located in this state into lots or parcels each of which is or will be thirty-six acres or more in area including to the centerline of dedicated roads or easements, if any, contiguous to the lot or parcel. (iii) The leasing of agricultural lands or apartments, offices, stores, hotels, motels, pads or similar space within an apartment building, industrial building, rental recreational vehicle community, rental manufactured home community, rental mobile home park or commercial building. (iv) The subdivision into or development of parcels, plots or fractional portions within the boundaries of a cemetery that has been formed and approved pursuant to this chapter. (v) A sale or lease of a lot, parcel or fractional interest that occurs ten or more years after the sale or lease of another lot, parcel or fractional interest if the other lot, parcel or fractional interest is not subject to this article and is treated as an independent parcel unless, on investigation by the commissioner, there is evidence of intent to subdivide. 60. "Timeshare" or "timeshare property" means real property ownership or right of occupancy in real property pursuant to article 9 of this chapter. For the purposes of this chapter, a timeshare is not a security unless it meets the definition of a security under section 44-1801. 61. "Timeshare salesperson" means a natural person who acts under the supervision of a licensed real estate broker to sell or exchange timeshare properties on behalf of a timeshare plan developer or other person. 61. 62. "Trustee": (a) Means a person who either: (i) Is designated under section 32-2194.27 to act as a trustee for an endowment-care cemetery fund. (ii) Holds bare legal title to real property under a subdivision trust. (b) Does not include a developer, subdivider, broker or salesperson within this chapter. 62. 63. "Unimproved lot or parcel" means a lot or parcel of a subdivision that is not an improved lot or parcel. 63. 64. "Unsubdivided lands": (a) Means land or lands divided or proposed to be divided for the purpose of sale or lease, whether immediate or future, into six or more lots, parcels or fractional interests and the lots or parcels are thirty-six acres or more each but less than one hundred sixty acres each, or that are offered, known or advertised under a common promotional plan for sale or lease, except that agricultural leases shall not be included in this definition. (b) Includes any land that is sold and that would otherwise constitute the sixth lot, parcel or fractional interest if the sale occurs ten or more years after the earliest of the previous five sales and if all of the sales consist of property that was originally contained within the same parcel that is thirty-six acres or more and less than one hundred sixty acres. END_STATUTE Sec. 2. Section 32-2122, Arizona Revised Statutes, is amended to read: START_STATUTE32-2122. License required of brokers and salespersons A. This article applies to any person acting in the capacity of a: 1. Real estate broker. 2. Real estate salesperson. 3. Cemetery broker. 4. Cemetery salesperson. 5. Membership camping broker. 6. Membership camping salesperson. 7. timeshare salesperson. B. It is unlawful for any person, corporation, partnership or limited liability company to engage in any business, occupation or activity listed in subsection A of this section without first obtaining a license as prescribed in this chapter and otherwise complying with this chapter. C. A person, corporation, partnership or limited liability company that is licensed as a salesperson or broker pursuant to this article or that is engaging in any work for which a license is required under this article is subject to the requirements of this chapter in performing any acts included in the definition of a broker unless otherwise provided in this chapter. D. Except as otherwise provided in this subsection, any act, in consideration or expectation of compensation, that is included in the definition of a real estate broker, cemetery broker or membership camping broker, whether the act is an incidental part of a transaction or the entire transaction, constitutes the person offering or attempting to perform the act of a real estate broker or real estate salesperson, a cemetery broker or cemetery salesperson, timeshare salesperson or a membership camping broker or a membership camping salesperson within the meaning of this chapter. A person who is not a licensee may collect in-person rent and related fees for the use of real estate as part of the person's clerical duties if the person works for a licensee, the rent collection is on behalf of the licensee and the person provides a receipt when rent is paid. END_STATUTE Sec. 3. Section 32-2124, Arizona Revised Statutes, is amended to read: START_STATUTE32-2124. Qualifications of licensees A. Except as otherwise provided in this chapter, the commissioner shall require proof, through the application or otherwise, as the commissioner deems advisable with due regard to the interests of the public, as to the competency of the applicant and shall require that the applicant has: 1. If for an original real estate broker's license, been an active licensed real estate salesperson or real estate broker for at least three years during the five years immediately preceding the time of application. 2. If for an original cemetery broker's license, either a current real estate broker's license, or if the applicant does not have a current real estate broker's license, at least three years' actual experience as a cemetery salesperson or cemetery broker or as a licensed real estate salesperson or licensed real estate broker during the five years immediately preceding the time of application. 3. If for an original membership camping broker's license, either a current real estate broker's license, or if the applicant does not have a current real estate broker's license, at least three years' actual experience as a licensed membership camping salesperson or licensed membership camping broker or as a licensed real estate salesperson or licensed real estate broker during the five years immediately preceding the time of application. 4. If for any type of broker's or salesperson's license, not had a license denied within one year immediately preceding application in this state pursuant to section 32-2153 or a similar statute in any other state. 5. If for any type of broker's or salesperson's license, not had a license revoked within the two years immediately preceding application in this state pursuant to section 32-2153 or a similar statute in any other state. 6. If reapplying for a license that expired more than one year before the date of application, met all current education and experience requirements and retakes the examination the same as if the applicant were applying for the license for the first time. 7. If for a real estate broker's, cemetery broker's or membership camping broker's license, other than a renewal application, an equivalent amount of active experience within the immediately preceding five years in the field in which the applicant is applying for the broker's license, as a substitute for the licensed active experience otherwise required in paragraphs 1, 2 and 3 of this subsection. The licensed active experience required may be met if the applicant can demonstrate to the commissioner's satisfaction that the applicant has an equivalent amount of experience in the past five years that, if the applicant had held a license, would have been sufficient to fulfill the licensed experience requirement. B. All applicants other than renewal applicants under section 32-2130 for a real estate salesperson's license shall show evidence satisfactory to the commissioner that they have completed a real estate salesperson's course that is prescribed and approved by the commissioner and that is at least ninety classroom hours, or the equivalent, of instruction in a real estate school certified by the commissioner and have satisfactorily passed an examination on the course. An applicant may complete the real estate salesperson's course prescribed by this subsection through a live classroom course or a distance learning course if the live classroom course or distance learning course is offered by a real estate school that is certified by the commissioner. The applicant must complete a proctored examination on the live classroom course or the distance learning course in person. An applicant may complete the required course or instructional segments in any combination of in-person or synchronous remote delivery methods. The real estate salesperson's course completion or its equivalent may not be more than ten years before the date of application unless, at the time of application, the commissioner determines in the commissioner's discretion that the applicant has work experience in a real estate-related field and education that together are equivalent to the prelicensure education requirement. Except as provided in section 32-4302, the commissioner may waive all or a portion of the prelicensure course requirement, other than the twenty-seven-hour Arizona-specific course, for an applicant who holds a current real estate license in another state. C. All applicants other than renewal applicants under section 32-2130 for a real estate broker's license shall show evidence satisfactory to the commissioner that they have completed a real estate broker's course that is prescribed and approved by the commissioner and that is at least ninety classroom hours, or the equivalent, of instruction in a real estate school certified by the commissioner and have satisfactorily passed an examination on the course. An applicant may complete the real estate broker's course prescribed by this subsection through a live classroom course or a distance learning course if the live classroom course or distance learning course is offered by a real estate school that is certified by the commissioner. The applicant must complete a proctored examination on the live classroom course or distance learning course in person. An applicant may complete the required course or instructional segments in any combination of in-person or synchronous remote delivery methods. The real estate broker's course completion or its equivalent may not be more than ten years before the date of application unless, at the time of application, the commissioner determines in the commissioner's discretion that the applicant has work experience in a real estate-related field and education that together are equivalent to the prelicensure education requirement. Except as provided in section 32-4302, the commissioner may waive all or a portion of the prelicensure course requirement, other than the twenty-seven-hour Arizona-specific course, for an applicant who holds a current real estate license in another state. D. Before receiving any license provided for by this chapter, an applicant must be at least eighteen years of age. E. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a real estate license has: 1. An appropriate knowledge of the English language, including reading, writing and spelling, and of arithmetical computations common to real estate practices. 2. At a minimum, an understanding of the general purpose and legal effect of any real estate practices, principles and related forms, including agency contracts, real estate contracts, deposit receipts, deeds, mortgages, deeds of trust, security agreements, bills of sale, land contracts of sale and property management, and of any other areas that the commissioner deems necessary and proper. 3. A thorough understanding of the obligations between principal and agent, the principles of real estate and business opportunity practice, the applicable canons of business ethics, this chapter and rules adopted pursuant to this chapter. 4. An appropriate knowledge of other real estate practices and principles as determined by the commissioner. F. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a license as a cemetery broker or a cemetery salesperson has: 1. Appropriate knowledge of the English language, including reading, writing and spelling, and of elementary arithmetic. 2. A general understanding of: (a) Cemetery associations, cemetery corporations and duties of cemetery directors and officers. (b) Plot ownership, deeds, certificates of ownership, contracts of sale, liens and leases. (c) Establishing, dedicating, maintaining, managing, operating, improving, preserving and conducting a cemetery. (d) The provisions of this chapter and rules adopted pursuant to this chapter relating to the organization and regulation of cemeteries and the licensing and regulation of cemetery brokers and cemetery salespersons. 3. A general understanding of the obligations between principal and agent, the principles of cemetery practice and the canons of business ethics pertaining to the operation of cemeteries and the sale of cemetery property. G. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a license as a membership camping broker or a membership camping salesperson has: 1. An appropriate knowledge of the English language, including reading, writing and spelling, and of elementary arithmetic. 2. A general understanding of: (a) The general purposes and legal effect of contracts and agency contracts. (b) Establishing, maintaining, managing and operating a membership campground. (c) The provisions of this chapter and rules adopted pursuant to this chapter relating to the organization and regulation of membership campgrounds and the licensing and regulation of membership camping brokers and membership camping salespersons. 3. A general understanding of the obligations between principal and agent and the canons of business ethics pertaining to the operation and promotion of membership campgrounds. H. The commissioner may adopt rules that specify the requirements of examination preparation courses for applicants for timeshare salesperson licenses. The examination preparation course and the timeshare examination shall be limited to those specific real estate laws, regulations, business practices and canons of business ethics that are directly related to the sale of timeshare interests in this state. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a license as a timeshare salesperson meets both of the following: 1. Has an appropriate knowledge of elementary arithmetic and of the English language, including reading, writing and spelling. 2. Has a general understanding of all of the following: (a) The provisions of this chapter and the rules adopted pursuant to this chapter that relate to the development of timeshare properties, the organization and regulation of timeshare properties, the sale or exchange of timeshare properties, the licensing and regulation of timeshare salespersons and the role of licensed real estate brokers in reviewing and approving timeshare sales or exchanges. (b) Timeshare ownership methods, including deeds, certificates of ownership and contracts of sale, leases of timeshare properties and liens and foreclosure of timeshare interests. (c) The canons of business ethics pertaining to the OPERATION of timeshare PROPERTIES and the sale and exchange of TIMESHARE properties. H. I. A renewal applicant for a real estate broker's, cemetery broker's or membership camping broker's or real estate salesperson's, cemetery salesperson's, or membership camping salesperson's or timeshare salesperson's license is not required to submit to an examination if the application is made within twelve months after the license expires and the license is not canceled, terminated or suspended at the time of application. I. j. The examination for a broker's license shall be more exacting and stringent and of a broader scope than the examination for a salesperson's license. J. k. An applicant for a real estate salesperson's or real estate broker's license who currently holds at least an equivalent license in another state is exempt from taking the national portion of the real estate examination pursuant to section 32-4302. K. l. Identification of each applicant whose licensing requirement was allowed to be met by an equivalent alternative pursuant to this section shall be included in the annual performance evaluation presented by the board to the governor pursuant to section 32-2104. L. M. An applicant for an original real estate salesperson's license, after completing the requirements of subsection B of this section, shall provide certification to the department at the time of application evidencing completion of six hours of instruction in real estate contract law and contract writing. This instruction shall include participation by the applicant in drafting contracts to purchase real property, listing agreements and lease agreements. M. n. The commissioner shall not issue a license to a person who has been convicted of a felony offense and who is currently incarcerated for the conviction, paroled or under community supervision and under the supervision of a parole or community supervision officer or who is on probation as a result of the conviction. N. o. The commissioner shall require an out-of-state applicant for a license that is issued pursuant to section 32-4302 to pass an examination specific to the laws of this state relating to this chapter before the commissioner issues the license to the applicant. END_STATUTE Sec. 4. Section 32-2125.01, Arizona Revised Statutes, is amended to read: START_STATUTE32-2125.01. Issuance of license; multiple licenses; use A. When the requirements for application, examination and payment of fees are completed to the satisfaction of the commissioner, the commissioner shall issue the license applied for to the applicant. Any person who has passed the state examination for broker or salesperson must become licensed within one year from after the date of the examination. Failure to comply with this section will necessitate the submission to and passing of another examination. B. Not more than one license shall be issued and outstanding to or in favor of a licensee at any one time, except that a person who is licensed as a real estate broker or real estate salesperson may engage in cemetery, or membership camping or timeshare sales activities without being separately licensed to engage in these activities. A real estate licensee may have only one employing broker in each of the following licensing categories: 1. Cemetery sales. 2. Membership camping sales. 3. Real estate sales. 4. Timeshare sales. C. A designated or employing real estate broker may engage in cemetery or membership camping sales activities and may employ cemetery and membership camping salespersons and associate brokers without being separately licensed as a cemetery or membership camping broker or salesperson.END_STATUTE Sec. 5. Section 32-2130, Arizona Revised Statutes, is amended to read: START_STATUTE32-2130. Renewal of licenses; education requirements; broker licensee renewal as salesperson licensee A. Except as provided in subsection K of this section, a license may be renewed in a timely manner by filing an application for renewal in the manner prescribed by the commissioner, by paying the renewal fee specified in this chapter and by presenting evidence of attendance at a school certified by the commissioner during the preceding license period of twenty-four credit hours for salespersons and associate brokers and thirty credit hours for designated brokers or for associate brokers employed by a designated broker pursuant to section 32-2151.01, subsection G, or a lesser number of credit hours prescribed by the commissioner, of real estate oriented continuing education courses prescribed and approved by the commissioner. The total number of credit hours shall be accrued at a rate of twenty-four credit hours for salespersons and associate brokers and thirty credit hours for designated brokers or for associate brokers employed by a designated broker pursuant to section 32-2151.01, subsection G during each twenty-four-month period of licensure. The department shall maintain a current list of approved courses. The commissioner may waive all or a portion of the continuing education requirement for good cause shown. The commissioner shall determine by rule the content of the renewal credit hours. The renewal credit hours may include the commissioner's current topics, including short sales. For the purposes of this subsection, "short sales" means real estate transactions in which the sales price is insufficient to pay the loan encumbering the property in addition to the costs of sale and the seller is unable to pay the difference. B. If an applicant is renewing a license within one year after it expired, the applicant may apply continuing education hours completed after the expiration toward the continuing education required for renewal. C. Each renewal application shall contain, as applicable, the same information required in an original application pursuant to section 32-2123. D. Cemetery brokers and salespersons and membership camping brokers and salespersons are exempt from the educational requirements of this section. E. This section does not require a licensee to attend department produced or sponsored courses if approved courses are otherwise available. F. Between the expiration date of the license and the date of renewal of the license, the rights of the licensee under the license expire. While the license is expired it is unlawful for a person to act or attempt or offer to act in a manner included in the definition of a real estate broker or real estate salesperson, timeshare salesperson, cemetery broker or CEMETERY salesperson or membership camping broker or MEMBERSHIP camping salesperson. If the license of an employing broker expires under this subsection, the licenses of persons who are employed by the employing broker shall be severed from the employing broker on the license expiration date of the employing broker. These persons may be rehired on renewal of the employing broker's license. The department shall terminate a license that has been expired for more than one year. G. Except as provided in section 32-4301, not more than one year after the license expiration date, the department shall renew a license without requiring the applicant to submit to an examination if the applicant held a license that was not canceled or suspended at the time of expiration. Except as provided in section 32-4301, the license period for a license renewed pursuant to this subsection commences the day after the expiration date of the expired license. Except as provided in section 32-2131, subsection A, paragraph 4 or 6, an applicant whose license has been terminated or revoked does not qualify for license renewal. H. Any employee or immediate family member of any employee of this state who, pursuant to section 32-2110 or any other law, rule or requirement, is prohibited from using a license issued under this chapter shall have, on the request of the employee or family member, the license placed on inactive status, shall have the right to renew the license and shall not be required to pay further fees until the employee or family member is again eligible to use the license. Renewal fees for the license shall not be required for only as long as the employee or family member is prohibited from using the license. I. The department shall not renew the license of a person who has been convicted of a felony offense and who is currently incarcerated for the conviction, paroled or under community supervision and under the supervision of a parole or community supervision officer or who is on probation as a result of the conviction. This subsection does not limit the commissioner's authority and discretion to deny the renewal for any other reason pursuant to this chapter. J. A real estate broker licensee may renew as a real estate salesperson licensee without having to meet the requirements prescribed by section 32-2124, subsection B. If a person renews as a real estate salesperson pursuant to this subsection, the person shall pay the salesperson's renewal fee as prescribed in section 32-2132. If the person subsequently wants to obtain a real estate broker license, the person must meet the requirements of this chapter, including the requirements prescribed by section 32-2124, subsection C. K. A licensee with an inactive license does not need to complete continuing education credit hours during the period that the license is inactive. If the licensee applies with the department to change the license status to active: 1. The commissioner may require the licensee to complete continuing education credit hours before activating the license. 2. In addition to the continuing education requirement described in paragraph 1 of this subsection, if the license has been inactive for more than fifteen years, the commissioner shall require that the applicant successfully pass an examination specific to the laws of this state relating to this chapter before activating the license. L. One year before the fifteen-year period described in subsection K, paragraph 2 of this section expires, the department shall send a notice to a licensee with an inactive license. The notice shall be sent to the licensee's last known address of record maintained by the department and shall disclose the requirements of subsection K of this section. END_STATUTE Sec. 6. Title 32, chapter 20, article 2, Arizona Revised Statutes, is amended by adding section 32-2134.02, to read: START_STATUTE32-2134.02. Timeshare salesperson certificate of convenience Notwithstanding any other licensing requirement pursuant to this chapter, the commissioner may issue a onetime thirty-day certificate of convenience without examination to any person who has applied and otherwise qualifies for a timeshare salesperson's license. An employing timeshare plan developer's designated broker shall certify by affidavit to the commissioner that the timeshare salesperson applicant will be trained in applicable timeshare and contract laws before participating in any offer or sale.END_STATUTE Sec. 7. Section 32-2153, Arizona Revised Statutes, is amended to read: START_STATUTE32-2153. Grounds for denial, suspension or revocation of licenses; letters of concern; provisional license; retention of jurisdiction by commissioner; definitions A. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter if it appears that the holder or applicant, within five years immediately preceding, in performing or attempting to perform any acts authorized by the license or by this chapter, has: 1. Pursued a course of misrepresentation or made false promises, either directly or through others, whether acting in the role of a licensee or a principal in a transaction. 2. Acted for more than one party in a transaction without the knowledge or written consent of all parties to the transaction. 3. Disregarded or violated any of the provisions of this chapter or any rules adopted by the commissioner. 4. Knowingly authorized, directed, connived at or aided in the publication, advertisement, distribution or circulation of any material false or misleading statement or representation concerning the licensee's business or any land, cemetery property, subdivision or membership campground or camping contract offered for sale in this or any other state. 5. Knowingly used the term "real estate broker", "cemetery broker" or "membership camping broker" without the legal right to do so. 6. Employed any unlicensed salesperson or unlicensed associate broker. 7. Accepted compensation as a licensee for performing any of the acts specified in this chapter from any person who is not authorized to provide compensation pursuant to section 32-2155. 8. Represented or attempted to represent a broker other than the broker to whom the salesperson or associate broker is licensed. 9. Failed, within a reasonable time, to account for or to remit any monies, to surrender to the rightful owner any documents or other valuable property that comes into the licensee's possession and that belongs to others, or to issue an appraisal report on real property or cemetery property in which the licensee has an interest, unless the nature and extent of the interest are fully disclosed in the report. 10. Paid or received any rebate, profit, compensation or commission in violation of this chapter. 11. Induced any party to a contract to break the contract for the purpose of substituting a new contract with the same or a different principal, if the substitution is motivated by the personal gain of the licensee. 12. Placed a sign on any property offering it for sale or for rent without the written authority of the owner or the owner's authorized agent. 13. Solicited, either directly or indirectly, prospects for the sale, lease or use of real property, cemetery property or membership camping contracts through a promotion of a speculative nature involving a game of chance or risk or through conducting lotteries or contests that are not specifically authorized under this chapter. 14. Failed to pay to the commissioner the renewal fee as specified in this chapter promptly and before the time specified. 15. Failed to keep an escrow or trust account or other record of monies deposited with the licensee relating to a real estate transaction. 16. Commingled the monies or other property of the licensee's principal or client with the licensee's own or converted these monies or property to the licensee or another. 17. Failed or refused on demand to produce any document, contract, book, record, information, compilation or report that is in the licensee's possession or that the licensee is required by law to maintain concerning any real estate, cemetery or membership camping business, services, activities or transactions involving or conducted by the licensee for inspection by the commissioner or the commissioner's representative. 18. Failed to maintain a complete record of each transaction that comes within this chapter. 19. Violated the federal fair housing law, the Arizona civil rights law or any local ordinance of a similar nature. 20. Tendered to a buyer a wood infestation report in connection with the transfer of residential real property or an interest in residential real property knowing that wood infestation exists or that the wood infestation report was inaccurate or false as of the date of the tender or that an inspection was not done in conjunction with the preparation of the wood infestation report. 21. As a licensed broker, failed to exercise reasonable supervision over the activities of salespersons, associate brokers or others under the broker's employ or failed to exercise reasonable supervision and control over the activities for which a license is required of a corporation, limited liability company or partnership on behalf of which the broker acts as designated broker under section 32-2125. 22. Demonstrated negligence in performing any act for which a license is required. 23. Sold or leased a property to a buyer or lessee that was not the property represented to the buyer or lessee. 24. Violated any condition or term of a commissioner's order. 25. Signed the name of another person on any document or form without the express written consent of the person. 26. As a licensed school, failed to exercise reasonable supervision over the activities for which a license is required for an owner, director, administrator or instructor in the school's employ. B. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter if it appears that the holder or applicant has: 1. Procured or attempted to procure a license under this chapter for the holder or applicant or another by fraud, misrepresentation or deceit or by filing an original or renewal application that is false or misleading. 2. Been convicted in a court of competent jurisdiction in this or any other state of a felony or of any crime of forgery, theft, extortion, conspiracy to defraud, a crime of moral turpitude or any other like offense. 3. Made any substantial misrepresentation. 4. Made any false promises of a character likely to influence, persuade or induce. 5. Been guilty of any conduct, whether of the same or a different character than specified in this section, that constitutes fraud or dishonest dealings. 6. Engaged in the business of a real estate broker, cemetery broker or membership camping broker or real estate salesperson, timeshare salesperson, cemetery salesperson or membership camping salesperson without holding a license as prescribed in this chapter. 7. Demonstrated incompetence to perform any duty or requirement of a licensee under or arising from this chapter. For the purposes of this paragraph, "incompetence" means a lack of basic knowledge or skill appropriate to the type of license the person holds or a failure to appreciate the probable consequences of the licensee's action or inaction. 8. Violated the terms of any criminal or administrative order, decree or sentence. 9. Violated any federal or state law, regulation or rule that relates to real estate or securities or that involves forgery, theft, extortion, fraud, substantial misrepresentation, dishonest dealings or violence against another person or failure to deal fairly with any party to a transaction that materially and adversely affected the transaction. This paragraph applies equally to violations of which the licensee was convicted in any lawful federal or state tribunal and to any admissions made in any settlement agreement by the licensee to violations. 10. Failed to respond in the course of an investigation or audit by providing documents or written statements. C. A judgment based on a court's finding or stipulation of fraud by a licensee following a trial on the merits or a criminal conviction of a licensee that results in a payment from the real estate recovery fund is prima facie evidence of a violation and grounds for discipline under this section. D. The commissioner may deny, suspend or revoke the issuance of a license on application by a corporation, a limited liability company or a partnership if it appears that an owner, officer, director, member, manager, partner, stockholder owning ten percent or more of the stock in the corporation or limited liability company or person exercising control of the entity is a current or former licensee whose license as a broker or a salesperson has been denied, suspended or revoked. E. The lapsing or suspension of a license by operation of law or by order or decision of the commissioner or a court of law or the voluntary surrender of a license by a licensee does not deprive the commissioner of jurisdiction to do any of the following: 1. Proceed with any investigation of or action or disciplinary proceeding against the licensee. 2. Render a decision suspending or revoking the license or denying the renewal or right of renewal of the license. 3. Assess a civil penalty pursuant to section 32-2160.01. F. For the purposes of this section: 1. "Letter of concern" means an advisory letter to notify a licensee that, while the conduct or evidence does not warrant disciplinary action, the commissioner believes that the licensee should modify or eliminate certain practices and that continuation of the activities may result in disciplinary action against the licensee. 2. "Provisional license" means a license that the department issues and that allows a licensee to practice subject to either a consent order as prescribed in section 32-2153.01 or the commissioner's terms, conditions and restrictions. END_STATUTE Sec. 8. Legislative intent The legislature intends to: 1. Establish a separate type of real estate license under the State real estate department for individuals who are retained exclusively to assist others in the purchase, sale and exchange of timeshare interests. 2. Narrow the scope of the training and the examination requirements for applicants for timeshare salesperson licenses and thereby reduce the barriers for employment while protecting the public by requiring that all purchases, sales and exchanges be performed under the purview of a licensed real estate broker and in full compliance with the specified statutory and regulatory requirements appliable to timeshare sales. Sec. 9. Effective date This act is effective from and after June 30, 2026.
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 32-2101, Arizona Revised Statutes, is amended to read:
START_STATUTE32-2101. Definitions
In this chapter, unless the context otherwise requires:
1. "Acting in concert" means evidence of collaborating to pursue a concerted plan.
2. "Address of record" means any of the following:
(a) The address where a licensee practices or is otherwise employed.
(b) A licensee's residential address.
(c) The address of a licensee's statutory agency who is registered as the licensee's statutory agent with the corporation commission. This subdivision applies only if notice of the statutory agent is given to the department pursuant to section 32-2126.
3. "Advertising" means attempting by publication, dissemination, exhibition, solicitation or circulation, oral or written, or for broadcast on radio or television to induce directly or indirectly any person to enter into any obligation or acquire any title or interest in lands subject to this chapter, including the land sales contract to be used and any photographs, drawings or artist's presentations of physical conditions or facilities existing or to exist on the property. Advertising does not include:
(a) Press releases or other communications delivered to newspapers, periodicals or other news media for general information or public relations purposes if no charge is made by the newspapers, periodicals or other news media to publish or use any part of these communications.
(b) Communications to stockholders as follows:
(i) Annual reports and interim financial reports.
(ii) Proxy materials.
(iii) Registration statements.
(iv) Securities prospectuses.
(v) Applications for listing of securities on stock exchanges.
(vi) Prospectuses.
(vii) Property reports.
(viii) Offering statements.
4. "Affiliate" means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person specified.
5. "Associate broker" means a licensed broker who is employed by another broker. Unless otherwise specifically provided, an associate broker has the same license privileges as a salesperson.
6. "Barrier" means a natural or man-made geographic feature that prevents parcels of land from being practicably, reasonably and economically united or reunited and that was not caused or created by the owner of the parcels.
7. "Blanket encumbrance":
(a) Means either:
(i) Any mortgage, any deed of trust or any other encumbrance or lien that secures or evidences the payment of monies and that affects more than one lot or parcel of subdivided land.
(ii) An agreement that affects more than one lot or parcel by which the subdivider holds the subdivision under an option, contract to sell or trust agreement.
(b) Does not include taxes and assessments that are levied by public authority.
8. "Board" means the real estate advisory board.
9. "Broker", when used without modification, means a person who is licensed as a broker under this chapter or who is required to be licensed as a broker under this chapter.
10. "Business broker" means a real estate broker who acts as an intermediary or agent between sellers or buyers, or both, in the sale or purchase, or both, of businesses or business opportunities where a lease or sale of real property is either a direct or incidental part of the transaction.
11. "Camping site" means a space that is designed and promoted for the purpose of locating any trailer, tent, tent trailer, pickup camper or other similar device used for camping.
12. "Cemetery" or "cemetery property" means any one, or a combination of more than one, of the following in a place that is used, or intended to be used, and dedicated for cemetery purposes:
(a) A burial park, for earth interments.
(b) A mausoleum, for crypt or vault entombments.
(c) A crematory, or a crematory and columbarium, for cinerary interments.
(d) A cemetery plot, including interment rights, mausoleum crypts, niches and burial spaces.
13. "Cemetery broker" means a person other than a real estate broker or real estate salesperson who, for another, for compensation:
(a) Sells, leases or exchanges cemetery property or interment services of or for another, or on the person's own account.
(b) Offers for another or for the person's own account to buy, sell, lease or exchange cemetery property or interment services.
(c) Negotiates the purchase and sale, lease or exchange of cemetery property or interment services.
(d) Negotiates the purchase or sale, lease or exchange, or lists or solicits, or negotiates a loan on or leasing of cemetery property or interment services.
14. "Cemetery salesperson" means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation engaged by or on behalf of a licensed cemetery or real estate broker, or through and on behalf of a corporation, partnership or limited liability company that is licensed as a cemetery or real estate broker, to perform any act or transaction included in the definition of cemetery broker.
15. "Commissioner" means the state real estate commissioner.
16. "Common promotional plan" means a plan, undertaken by a person or a group of persons acting in concert, to offer lots for sale or lease. If the land is offered for sale by a person or group of persons acting in concert, and the land is contiguous or is known, designated or advertised as a common unit or by a common name, the land is presumed, without regard to the number of lots covered by each individual offering, as being offered for sale or lease as part of a common promotional plan. Separate subdividers selling lots or parcels in separately platted subdivisions within a master planned community shall not be deemed to be offering their combined lots for sale or lease as part of a common promotional plan.
17. "Compensation" means any fee, commission, salary, monies or other valuable consideration for services rendered or to be rendered as well as the promise of consideration whether contingent or not.
18. "Contiguous":
(a) Means lots, parcels or fractional interests that share a common boundary or point.
(b) Does not include lots, parcels or fractional interests that are separated by either of the following:
(i) A barrier.
(ii) A road, street or highway that has been established by this state or by any agency or political subdivision of this state, that has been designated by the federal government as an interstate highway or that has been regularly maintained by this state or by any agency or political subdivision of this state and has been used continuously by the public for at least the last five years.
19. "Control" or "controlled" means a person who, through ownership, voting rights, power of attorney, proxy, management rights, operational rights or other rights, has the right to make decisions binding on an entity, whether a corporation, a partnership or any other entity.
20. "Corporation licensee" means a lawfully organized corporation that is registered with the corporation commission and that has an officer licensed as the designated broker pursuant to section 32-2125.
21. "Department" means the state real estate department.
22. "Designated broker" means a natural person who is licensed as a broker under this chapter and who is either:
(a) Designated to act on behalf of an employing real estate, cemetery or membership camping entity.
(b) Doing business as a sole proprietor.
23. "Developer":
(a) Means a person who offers real property in a development for sale, lease or use, either immediately or in the future, on the person's own behalf or on behalf of another person, under this chapter.
(b) Does not include a person whose involvement with a development is limited to listing property within the development for sale, lease or use.
24. "Development" means any division, proposed division or use of real property that the department has authority to regulate, including subdivided and unsubdivided lands, cemeteries, condominiums, timeshares, membership campgrounds and stock cooperatives.
25. "Distance learning" means continuing education or prelicensure education that is an online, planned learning experience with a geographic separation that may be synchronous or asynchronous, that does not require real-time interaction between a student and an instructor and that uses a platform with self-paced or prerecorded lessons and materials that a student can access via the internet to proceed at the student's own pace.
26. "Employing broker" means a person who is licensed or is required to be licensed as a:
(a) Broker entity pursuant to section 32-2125, subsection A.
(b) Sole proprietorship if the sole proprietor is a broker licensed pursuant to this chapter.
27. "Fractional interest" means an undivided interest in improved or unimproved land, lots or parcels of any size created for the purpose of sale or lease and evidenced by any receipt, certificate, deed or other document conveying the interest. Undivided interests in land, lots or parcels created in the names of a husband and wife as community property, joint tenants or tenants in common, or in the names of other persons who, acting together as part of a single transaction, acquire the interests without a purpose to divide the interests for present or future sale or lease shall be deemed to constitute only one fractional interest.
28. "Improved lot or parcel" means a lot or parcel of a subdivision on which there is a residential, commercial or industrial building or concerning which a contract has been entered into between a subdivider and a purchaser that obligates the subdivider directly, or indirectly through a building contractor, to completely construct a residential, commercial or industrial building on the lot or parcel within two years after the date on which the contract of sale for the lot is entered into, or for a condominium as defined in section 33-1202, within four years after the date on which the contract for sale is entered into.
29. "Inactive license" means a license that is issued pursuant to article 2 of this chapter to a licensee who is on inactive status during the current license period and who is not engaged by or on behalf of a broker.
30. "Lease" or "leasing" includes any lease, whether it is the sole, the principal or any incidental part of a transaction.
31. "License" means the whole or part of any agency permit, certificate, approval, registration, public report, charter or similar form of permission required by this chapter.
32. "Licensee" means a person to whom a license for the current license period has been granted under any provision of this chapter, and, for the purposes of section 32-2153, subsection A, includes original license applicants.
33. "License period" means the two-year period beginning with the date of original issue or renewal of a particular license and ending on the expiration date, if any.
34. "Limited liability company licensee" means a lawfully organized limited liability company that has a member or manager who is a natural person and who is licensed as the designated broker pursuant to section 32-2125.
35. "Live classroom course" means a course or instructional segment delivered in either an in-person classroom instructional format or a synchronous remote instructional format that allows students to observe and participate remotely in an instructional segment via livestreaming.
36. "Lot reservation" means an expression of interest by a prospective purchaser in buying at some time in the future a subdivided or unsubdivided lot, unit or parcel in this state. In all cases, a subsequent affirmative action by the prospective purchaser must be taken to create a contractual obligation to purchase.
37. "Master planned community" means a development that consists of two or more separately platted subdivisions and that is either subject to a master declaration of covenants, conditions or restrictions, is subject to restrictive covenants sufficiently uniform in character to clearly indicate a general scheme for improving or developing real property or is governed or administered by a master owner's association.
38. "Member" means a member of the real estate advisory board.
39. "Membership camping broker" means a person, other than a salesperson, who, for compensation:
(a) Sells, purchases, lists, exchanges or leases membership camping contracts.
(b) Offers to sell, purchase, exchange or lease membership camping contracts.
(c) Negotiates or offers, attempts or agrees to negotiate the sale, purchase, exchange or lease of membership camping contracts.
(d) Advertises or holds himself out as being engaged in the business of selling, buying, exchanging or leasing membership camping contracts or counseling or advising regarding membership camping contracts.
(e) Assists or directs in procuring prospects calculated or intended to result in the sale, purchase, listing, exchange or lease of membership camping contracts.
(f) Performs any of the foregoing acts as an employee or on behalf of a membership camping operator or membership contract owner.
40. "Membership camping contract" means an agreement that is offered or sold in this state evidencing a purchaser's right or license to use the camping or outdoor recreation facilities of a membership camping operator and includes a membership that provides for this use.
41. "Membership camping operator":
(a) Means an enterprise, other than one that is tax exempt under section 501(c)(3) of the internal revenue code of 1986, as amended, that solicits membership paid for by a fee or periodic payments and has as one of its purposes camping or outdoor recreation, including the use of camping sites primarily by members.
(b) Does not include camping or recreational trailer parks that are open to the general public and that contain camping sites rented for a per use fee or a mobile home park.
42. "Membership camping salesperson" means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation engaged by or on behalf of a licensed membership camping or real estate broker, or by or on behalf of a corporation, partnership or limited liability company that is licensed as a membership camping or real estate broker, to perform any act or participate in any transaction in a manner included in the definition of membership camping broker.
43. "Partnership licensee" means a partnership with a managing general partner who is licensed as the designated broker pursuant to section 32-2125.
44. "Permanent access", as required under article 4 of this chapter, means permanent access from the subdivision to any federal, state or county highway.
45. "Perpetual care" or "endowed care":
(a) Means maintaining and caring, in all places where interments have been made, for the trees, shrubs, roads, streets and other improvements and embellishments contained within or forming a part of the cemetery.
(b) Does not include maintaining or repairing monuments, tombs, copings or other man-made ornaments as associated with individual burial spaces.
46. "Perpetual or endowed-care cemetery" means a cemetery in which lots or other burial spaces are sold or transferred under the representation that the cemetery will receive perpetual care or endowed care free of further cost to the purchaser after payment of the original purchase price for the lot, burial space or interment right.
47. "Person" means any individual, corporation, partnership or company and any other form of multiple organization for carrying on business, foreign or domestic.
48. "Private cemetery" means a cemetery or place that is not licensed under article 6 of this chapter, where burials or interments of human remains are made, in which sales or transfers of interment rights or burial plots are not made to the public and in which not more than ten interments or burials occur annually.
49. "Promotion" or "promotional practice" means advertising and any other act, practice, device or scheme to induce directly or indirectly any person to enter into any obligation or acquire any title or interest in or use of real property subject to this chapter, including meetings with prospective purchasers, arrangements for prospective purchasers to visit real property, travel allowances and discount, exchange, refund and cancellation privileges.
50. "Real estate" includes leasehold-interests and any estates in land as defined in title 33, chapter 2, articles 1 and 2, regardless of whether located in this state.
51. "Real estate broker" means a person, other than a salesperson, who, for another and for compensation:
(a) Sells, exchanges, purchases, rents or leases real estate, businesses and business opportunities or timeshare interests.
(b) Offers to sell, exchange, purchase, rent or lease real estate, businesses and business opportunities or timeshare interests.
(c) Negotiates or offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of real estate, businesses and business opportunities or timeshare interests.
(d) Lists or offers, attempts or agrees to list real estate, businesses and business opportunities or timeshare interests for sale, lease or exchange.
(e) Auctions or offers, attempts or agrees to auction real estate, businesses and business opportunities or timeshare interests.
(f) Buys, sells, offers to buy or sell or otherwise deals in options on real estate, businesses and business opportunities or timeshare interests or improvements to real estate, businesses and business opportunities or timeshare interests.
(g) Collects or offers, attempts or agrees to collect rent for the use of real estate, businesses and business opportunities or timeshare interests. This subdivision does not apply to a person who is not a licensee, who works for a real estate broker or a real estate salesperson, who collects in-person rent and related fees on behalf of the real estate broker or real estate salesperson for the use of real estate as part of the person's clerical duties and who provides a receipt when rent is paid.
(h) Advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting or leasing real estate, businesses and business opportunities or timeshare interests or counseling or advising regarding real estate, businesses and business opportunities or timeshare interests.
(i) Assists or directs in procuring prospects that are calculated to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests.
(j) Assists or directs in negotiating any transaction calculated or intended to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests.
(k) Incident to the sale of real estate, businesses and business opportunities negotiates or offers, attempts or agrees to negotiate a loan secured or to be secured by any mortgage or other encumbrance on or transfer of real estate, businesses and business opportunities or timeshare interests subject to section 32-2155, subsection D. This subdivision does not apply to mortgage brokers as defined in and subject to title 6, chapter 9, article 1.
(l) Engages in the business of assisting or offering to assist another in filing an application for the purchase or lease of, or in locating or entering on, lands owned by the state or federal government.
(m) Claims, demands, charges, receives, collects or contracts to collect an advance fee in connection with any employment enumerated in this section, including employment undertaken to promote the sale or lease of real property by advance fee listing, by furnishing rental information to a prospective tenant for a fee paid by the prospective tenant, by advertising or by any other offering to sell, lease, exchange or rent real property or selling kits connected therewith. This does not include the activities of any communications media of general circulation or coverage not primarily engaged in advertising real estate or any communications media activities that are specifically exempt from applicability of this article under section 32-2121.
(n) Engages in any of the acts listed in subdivisions (a) through (m) of this paragraph for the sale or lease of other than real property if a real property sale or lease is a part of, contingent on or ancillary to the transaction.
(o) Performs any of the acts listed in subdivisions (a) through (m) of this paragraph as an employee of, or in behalf of, the owner of real estate, or interest in the real estate, or improvements affixed on the real estate, for compensation.
(p) Acts as a business broker.
52. "Real estate sales contract" means an agreement in which one party agrees to convey title to real estate to another party on the satisfaction of specified conditions set forth in the contract.
53. "Real estate salesperson" means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation engaged by or on behalf of a licensed real estate broker, or by or on behalf of a limited liability company, partnership or corporation that is licensed as a real estate broker, to perform any act or participate in any transaction in a manner included in the definition of real estate broker subject to section 32-2155.
54. "Sale" or "lease" includes every disposition, transfer, option or offer or attempt to dispose of or transfer real property, or an interest, use or estate in the real property, including offering the property as a prize or gift if a monetary charge or consideration for whatever purpose is required.
55. "Salesperson", when used without modification, means a natural person who acts on the person's own behalf or through and on behalf of a professional limited liability company or a professional corporation licensed under this chapter or any person required to be licensed as a salesperson under this chapter.
56. "School" means a person or entity that offers a course of study toward completion of the education requirements leading to licensure or renewal of licensure under this chapter.
57. "Stock cooperative" means a corporation to which all of the following apply:
(a) The corporation is formed or used to hold title to improved real property in fee simple or for a term of years.
(b) All or substantially all of the shareholders of the corporation each receive a right of exclusive occupancy in a portion of the real property to which the corporation holds title.
(c) The right of occupancy may only be transferred with the concurrent transfer of the shares of stock in the corporation held by the person having the right of occupancy.
58. "Subdivider":
(a) Means any person who offers for sale or lease six or more lots, parcels or fractional interests in a subdivision or who causes land to be subdivided into a subdivision for the subdivider or for others, or who undertakes to develop a subdivision.
(b) Does not include a public agency or officer authorized by law to create subdivisions.
59. "Subdivision" or "subdivided lands":
(a) Means improved or unimproved land or lands divided or proposed to be divided for the purpose of sale or lease, whether immediate or future, into six or more lots, parcels or fractional interests.
(b) Includes a stock cooperative, lands divided or proposed to be divided as part of a common promotional plan and residential condominiums as defined in title 33, chapter 9.
(c) Does not include:
(i) Leasehold offerings of one year or less.
(ii) The division or proposed division of land located in this state into lots or parcels each of which is or will be thirty-six acres or more in area including to the centerline of dedicated roads or easements, if any, contiguous to the lot or parcel.
(iii) The leasing of agricultural lands or apartments, offices, stores, hotels, motels, pads or similar space within an apartment building, industrial building, rental recreational vehicle community, rental manufactured home community, rental mobile home park or commercial building.
(iv) The subdivision into or development of parcels, plots or fractional portions within the boundaries of a cemetery that has been formed and approved pursuant to this chapter.
(v) A sale or lease of a lot, parcel or fractional interest that occurs ten or more years after the sale or lease of another lot, parcel or fractional interest if the other lot, parcel or fractional interest is not subject to this article and is treated as an independent parcel unless, on investigation by the commissioner, there is evidence of intent to subdivide.
60. "Timeshare" or "timeshare property" means real property ownership or right of occupancy in real property pursuant to article 9 of this chapter. For the purposes of this chapter, a timeshare is not a security unless it meets the definition of a security under section 44-1801.
61. "Timeshare salesperson" means a natural person who acts under the supervision of a licensed real estate broker to sell or exchange timeshare properties on behalf of a timeshare plan developer or other person.
61. 62. "Trustee":
(a) Means a person who either:
(i) Is designated under section 32-2194.27 to act as a trustee for an endowment-care cemetery fund.
(ii) Holds bare legal title to real property under a subdivision trust.
(b) Does not include a developer, subdivider, broker or salesperson within this chapter.
62. 63. "Unimproved lot or parcel" means a lot or parcel of a subdivision that is not an improved lot or parcel.
63. 64. "Unsubdivided lands":
(a) Means land or lands divided or proposed to be divided for the purpose of sale or lease, whether immediate or future, into six or more lots, parcels or fractional interests and the lots or parcels are thirty-six acres or more each but less than one hundred sixty acres each, or that are offered, known or advertised under a common promotional plan for sale or lease, except that agricultural leases shall not be included in this definition.
(b) Includes any land that is sold and that would otherwise constitute the sixth lot, parcel or fractional interest if the sale occurs ten or more years after the earliest of the previous five sales and if all of the sales consist of property that was originally contained within the same parcel that is thirty-six acres or more and less than one hundred sixty acres. END_STATUTE
Sec. 2. Section 32-2122, Arizona Revised Statutes, is amended to read:
START_STATUTE32-2122. License required of brokers and salespersons
A. This article applies to any person acting in the capacity of a:
1. Real estate broker.
2. Real estate salesperson.
3. Cemetery broker.
4. Cemetery salesperson.
5. Membership camping broker.
6. Membership camping salesperson.
7. timeshare salesperson.
B. It is unlawful for any person, corporation, partnership or limited liability company to engage in any business, occupation or activity listed in subsection A of this section without first obtaining a license as prescribed in this chapter and otherwise complying with this chapter.
C. A person, corporation, partnership or limited liability company that is licensed as a salesperson or broker pursuant to this article or that is engaging in any work for which a license is required under this article is subject to the requirements of this chapter in performing any acts included in the definition of a broker unless otherwise provided in this chapter.
D. Except as otherwise provided in this subsection, any act, in consideration or expectation of compensation, that is included in the definition of a real estate broker, cemetery broker or membership camping broker, whether the act is an incidental part of a transaction or the entire transaction, constitutes the person offering or attempting to perform the act of a real estate broker or real estate salesperson, a cemetery broker or cemetery salesperson, timeshare salesperson or a membership camping broker or a membership camping salesperson within the meaning of this chapter. A person who is not a licensee may collect in-person rent and related fees for the use of real estate as part of the person's clerical duties if the person works for a licensee, the rent collection is on behalf of the licensee and the person provides a receipt when rent is paid. END_STATUTE
Sec. 3. Section 32-2124, Arizona Revised Statutes, is amended to read:
START_STATUTE32-2124. Qualifications of licensees
A. Except as otherwise provided in this chapter, the commissioner shall require proof, through the application or otherwise, as the commissioner deems advisable with due regard to the interests of the public, as to the competency of the applicant and shall require that the applicant has:
1. If for an original real estate broker's license, been an active licensed real estate salesperson or real estate broker for at least three years during the five years immediately preceding the time of application.
2. If for an original cemetery broker's license, either a current real estate broker's license, or if the applicant does not have a current real estate broker's license, at least three years' actual experience as a cemetery salesperson or cemetery broker or as a licensed real estate salesperson or licensed real estate broker during the five years immediately preceding the time of application.
3. If for an original membership camping broker's license, either a current real estate broker's license, or if the applicant does not have a current real estate broker's license, at least three years' actual experience as a licensed membership camping salesperson or licensed membership camping broker or as a licensed real estate salesperson or licensed real estate broker during the five years immediately preceding the time of application.
4. If for any type of broker's or salesperson's license, not had a license denied within one year immediately preceding application in this state pursuant to section 32-2153 or a similar statute in any other state.
5. If for any type of broker's or salesperson's license, not had a license revoked within the two years immediately preceding application in this state pursuant to section 32-2153 or a similar statute in any other state.
6. If reapplying for a license that expired more than one year before the date of application, met all current education and experience requirements and retakes the examination the same as if the applicant were applying for the license for the first time.
7. If for a real estate broker's, cemetery broker's or membership camping broker's license, other than a renewal application, an equivalent amount of active experience within the immediately preceding five years in the field in which the applicant is applying for the broker's license, as a substitute for the licensed active experience otherwise required in paragraphs 1, 2 and 3 of this subsection. The licensed active experience required may be met if the applicant can demonstrate to the commissioner's satisfaction that the applicant has an equivalent amount of experience in the past five years that, if the applicant had held a license, would have been sufficient to fulfill the licensed experience requirement.
B. All applicants other than renewal applicants under section 32-2130 for a real estate salesperson's license shall show evidence satisfactory to the commissioner that they have completed a real estate salesperson's course that is prescribed and approved by the commissioner and that is at least ninety classroom hours, or the equivalent, of instruction in a real estate school certified by the commissioner and have satisfactorily passed an examination on the course. An applicant may complete the real estate salesperson's course prescribed by this subsection through a live classroom course or a distance learning course if the live classroom course or distance learning course is offered by a real estate school that is certified by the commissioner. The applicant must complete a proctored examination on the live classroom course or the distance learning course in person. An applicant may complete the required course or instructional segments in any combination of in-person or synchronous remote delivery methods. The real estate salesperson's course completion or its equivalent may not be more than ten years before the date of application unless, at the time of application, the commissioner determines in the commissioner's discretion that the applicant has work experience in a real estate-related field and education that together are equivalent to the prelicensure education requirement. Except as provided in section 32-4302, the commissioner may waive all or a portion of the prelicensure course requirement, other than the twenty-seven-hour Arizona-specific course, for an applicant who holds a current real estate license in another state.
C. All applicants other than renewal applicants under section 32-2130 for a real estate broker's license shall show evidence satisfactory to the commissioner that they have completed a real estate broker's course that is prescribed and approved by the commissioner and that is at least ninety classroom hours, or the equivalent, of instruction in a real estate school certified by the commissioner and have satisfactorily passed an examination on the course. An applicant may complete the real estate broker's course prescribed by this subsection through a live classroom course or a distance learning course if the live classroom course or distance learning course is offered by a real estate school that is certified by the commissioner. The applicant must complete a proctored examination on the live classroom course or distance learning course in person. An applicant may complete the required course or instructional segments in any combination of in-person or synchronous remote delivery methods. The real estate broker's course completion or its equivalent may not be more than ten years before the date of application unless, at the time of application, the commissioner determines in the commissioner's discretion that the applicant has work experience in a real estate-related field and education that together are equivalent to the prelicensure education requirement. Except as provided in section 32-4302, the commissioner may waive all or a portion of the prelicensure course requirement, other than the twenty-seven-hour Arizona-specific course, for an applicant who holds a current real estate license in another state.
D. Before receiving any license provided for by this chapter, an applicant must be at least eighteen years of age.
E. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a real estate license has:
1. An appropriate knowledge of the English language, including reading, writing and spelling, and of arithmetical computations common to real estate practices.
2. At a minimum, an understanding of the general purpose and legal effect of any real estate practices, principles and related forms, including agency contracts, real estate contracts, deposit receipts, deeds, mortgages, deeds of trust, security agreements, bills of sale, land contracts of sale and property management, and of any other areas that the commissioner deems necessary and proper.
3. A thorough understanding of the obligations between principal and agent, the principles of real estate and business opportunity practice, the applicable canons of business ethics, this chapter and rules adopted pursuant to this chapter.
4. An appropriate knowledge of other real estate practices and principles as determined by the commissioner.
F. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a license as a cemetery broker or a cemetery salesperson has:
1. Appropriate knowledge of the English language, including reading, writing and spelling, and of elementary arithmetic.
2. A general understanding of:
(a) Cemetery associations, cemetery corporations and duties of cemetery directors and officers.
(b) Plot ownership, deeds, certificates of ownership, contracts of sale, liens and leases.
(c) Establishing, dedicating, maintaining, managing, operating, improving, preserving and conducting a cemetery.
(d) The provisions of this chapter and rules adopted pursuant to this chapter relating to the organization and regulation of cemeteries and the licensing and regulation of cemetery brokers and cemetery salespersons.
3. A general understanding of the obligations between principal and agent, the principles of cemetery practice and the canons of business ethics pertaining to the operation of cemeteries and the sale of cemetery property.
G. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a license as a membership camping broker or a membership camping salesperson has:
1. An appropriate knowledge of the English language, including reading, writing and spelling, and of elementary arithmetic.
2. A general understanding of:
(a) The general purposes and legal effect of contracts and agency contracts.
(b) Establishing, maintaining, managing and operating a membership campground.
(c) The provisions of this chapter and rules adopted pursuant to this chapter relating to the organization and regulation of membership campgrounds and the licensing and regulation of membership camping brokers and membership camping salespersons.
3. A general understanding of the obligations between principal and agent and the canons of business ethics pertaining to the operation and promotion of membership campgrounds.
H. The commissioner may adopt rules that specify the requirements of examination preparation courses for applicants for timeshare salesperson licenses. The examination preparation course and the timeshare examination shall be limited to those specific real estate laws, regulations, business practices and canons of business ethics that are directly related to the sale of timeshare interests in this state. The commissioner shall ascertain by a written, electronic or other examination method that an applicant for a license as a timeshare salesperson meets both of the following:
1. Has an appropriate knowledge of elementary arithmetic and of the English language, including reading, writing and spelling.
2. Has a general understanding of all of the following:
(a) The provisions of this chapter and the rules adopted pursuant to this chapter that relate to the development of timeshare properties, the organization and regulation of timeshare properties, the sale or exchange of timeshare properties, the licensing and regulation of timeshare salespersons and the role of licensed real estate brokers in reviewing and approving timeshare sales or exchanges.
(b) Timeshare ownership methods, including deeds, certificates of ownership and contracts of sale, leases of timeshare properties and liens and foreclosure of timeshare interests.
(c) The canons of business ethics pertaining to the OPERATION of timeshare PROPERTIES and the sale and exchange of TIMESHARE properties.
H. I. A renewal applicant for a real estate broker's, cemetery broker's or membership camping broker's or real estate salesperson's, cemetery salesperson's, or membership camping salesperson's or timeshare salesperson's license is not required to submit to an examination if the application is made within twelve months after the license expires and the license is not canceled, terminated or suspended at the time of application.
I. j. The examination for a broker's license shall be more exacting and stringent and of a broader scope than the examination for a salesperson's license.
J. k. An applicant for a real estate salesperson's or real estate broker's license who currently holds at least an equivalent license in another state is exempt from taking the national portion of the real estate examination pursuant to section 32-4302.
K. l. Identification of each applicant whose licensing requirement was allowed to be met by an equivalent alternative pursuant to this section shall be included in the annual performance evaluation presented by the board to the governor pursuant to section 32-2104.
L. M. An applicant for an original real estate salesperson's license, after completing the requirements of subsection B of this section, shall provide certification to the department at the time of application evidencing completion of six hours of instruction in real estate contract law and contract writing. This instruction shall include participation by the applicant in drafting contracts to purchase real property, listing agreements and lease agreements.
M. n. The commissioner shall not issue a license to a person who has been convicted of a felony offense and who is currently incarcerated for the conviction, paroled or under community supervision and under the supervision of a parole or community supervision officer or who is on probation as a result of the conviction.
N. o. The commissioner shall require an out-of-state applicant for a license that is issued pursuant to section 32-4302 to pass an examination specific to the laws of this state relating to this chapter before the commissioner issues the license to the applicant. END_STATUTE
Sec. 4. Section 32-2125.01, Arizona Revised Statutes, is amended to read:
START_STATUTE32-2125.01. Issuance of license; multiple licenses; use
A. When the requirements for application, examination and payment of fees are completed to the satisfaction of the commissioner, the commissioner shall issue the license applied for to the applicant. Any person who has passed the state examination for broker or salesperson must become licensed within one year from after the date of the examination. Failure to comply with this section will necessitate the submission to and passing of another examination.
B. Not more than one license shall be issued and outstanding to or in favor of a licensee at any one time, except that a person who is licensed as a real estate broker or real estate salesperson may engage in cemetery, or membership camping or timeshare sales activities without being separately licensed to engage in these activities. A real estate licensee may have only one employing broker in each of the following licensing categories:
1. Cemetery sales.
2. Membership camping sales.
3. Real estate sales.
4. Timeshare sales.
C. A designated or employing real estate broker may engage in cemetery or membership camping sales activities and may employ cemetery and membership camping salespersons and associate brokers without being separately licensed as a cemetery or membership camping broker or salesperson.END_STATUTE
Sec. 5. Section 32-2130, Arizona Revised Statutes, is amended to read:
START_STATUTE32-2130. Renewal of licenses; education requirements; broker licensee renewal as salesperson licensee
A. Except as provided in subsection K of this section, a license may be renewed in a timely manner by filing an application for renewal in the manner prescribed by the commissioner, by paying the renewal fee specified in this chapter and by presenting evidence of attendance at a school certified by the commissioner during the preceding license period of twenty-four credit hours for salespersons and associate brokers and thirty credit hours for designated brokers or for associate brokers employed by a designated broker pursuant to section 32-2151.01, subsection G, or a lesser number of credit hours prescribed by the commissioner, of real estate oriented continuing education courses prescribed and approved by the commissioner. The total number of credit hours shall be accrued at a rate of twenty-four credit hours for salespersons and associate brokers and thirty credit hours for designated brokers or for associate brokers employed by a designated broker pursuant to section 32-2151.01, subsection G during each twenty-four-month period of licensure. The department shall maintain a current list of approved courses. The commissioner may waive all or a portion of the continuing education requirement for good cause shown. The commissioner shall determine by rule the content of the renewal credit hours. The renewal credit hours may include the commissioner's current topics, including short sales. For the purposes of this subsection, "short sales" means real estate transactions in which the sales price is insufficient to pay the loan encumbering the property in addition to the costs of sale and the seller is unable to pay the difference.
B. If an applicant is renewing a license within one year after it expired, the applicant may apply continuing education hours completed after the expiration toward the continuing education required for renewal.
C. Each renewal application shall contain, as applicable, the same information required in an original application pursuant to section 32-2123.
D. Cemetery brokers and salespersons and membership camping brokers and salespersons are exempt from the educational requirements of this section.
E. This section does not require a licensee to attend department produced or sponsored courses if approved courses are otherwise available.
F. Between the expiration date of the license and the date of renewal of the license, the rights of the licensee under the license expire. While the license is expired it is unlawful for a person to act or attempt or offer to act in a manner included in the definition of a real estate broker or real estate salesperson, timeshare salesperson, cemetery broker or CEMETERY salesperson or membership camping broker or MEMBERSHIP camping salesperson. If the license of an employing broker expires under this subsection, the licenses of persons who are employed by the employing broker shall be severed from the employing broker on the license expiration date of the employing broker. These persons may be rehired on renewal of the employing broker's license. The department shall terminate a license that has been expired for more than one year.
G. Except as provided in section 32-4301, not more than one year after the license expiration date, the department shall renew a license without requiring the applicant to submit to an examination if the applicant held a license that was not canceled or suspended at the time of expiration. Except as provided in section 32-4301, the license period for a license renewed pursuant to this subsection commences the day after the expiration date of the expired license. Except as provided in section 32-2131, subsection A, paragraph 4 or 6, an applicant whose license has been terminated or revoked does not qualify for license renewal.
H. Any employee or immediate family member of any employee of this state who, pursuant to section 32-2110 or any other law, rule or requirement, is prohibited from using a license issued under this chapter shall have, on the request of the employee or family member, the license placed on inactive status, shall have the right to renew the license and shall not be required to pay further fees until the employee or family member is again eligible to use the license. Renewal fees for the license shall not be required for only as long as the employee or family member is prohibited from using the license.
I. The department shall not renew the license of a person who has been convicted of a felony offense and who is currently incarcerated for the conviction, paroled or under community supervision and under the supervision of a parole or community supervision officer or who is on probation as a result of the conviction. This subsection does not limit the commissioner's authority and discretion to deny the renewal for any other reason pursuant to this chapter.
J. A real estate broker licensee may renew as a real estate salesperson licensee without having to meet the requirements prescribed by section 32-2124, subsection B. If a person renews as a real estate salesperson pursuant to this subsection, the person shall pay the salesperson's renewal fee as prescribed in section 32-2132. If the person subsequently wants to obtain a real estate broker license, the person must meet the requirements of this chapter, including the requirements prescribed by section 32-2124, subsection C.
K. A licensee with an inactive license does not need to complete continuing education credit hours during the period that the license is inactive. If the licensee applies with the department to change the license status to active:
1. The commissioner may require the licensee to complete continuing education credit hours before activating the license.
2. In addition to the continuing education requirement described in paragraph 1 of this subsection, if the license has been inactive for more than fifteen years, the commissioner shall require that the applicant successfully pass an examination specific to the laws of this state relating to this chapter before activating the license.
L. One year before the fifteen-year period described in subsection K, paragraph 2 of this section expires, the department shall send a notice to a licensee with an inactive license. The notice shall be sent to the licensee's last known address of record maintained by the department and shall disclose the requirements of subsection K of this section. END_STATUTE
Sec. 6. Title 32, chapter 20, article 2, Arizona Revised Statutes, is amended by adding section 32-2134.02, to read:
START_STATUTE32-2134.02. Timeshare salesperson certificate of convenience
Notwithstanding any other licensing requirement pursuant to this chapter, the commissioner may issue a onetime thirty-day certificate of convenience without examination to any person who has applied and otherwise qualifies for a timeshare salesperson's license. An employing timeshare plan developer's designated broker shall certify by affidavit to the commissioner that the timeshare salesperson applicant will be trained in applicable timeshare and contract laws before participating in any offer or sale.END_STATUTE
Sec. 7. Section 32-2153, Arizona Revised Statutes, is amended to read:
START_STATUTE32-2153. Grounds for denial, suspension or revocation of licenses; letters of concern; provisional license; retention of jurisdiction by commissioner; definitions
A. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter if it appears that the holder or applicant, within five years immediately preceding, in performing or attempting to perform any acts authorized by the license or by this chapter, has:
1. Pursued a course of misrepresentation or made false promises, either directly or through others, whether acting in the role of a licensee or a principal in a transaction.
2. Acted for more than one party in a transaction without the knowledge or written consent of all parties to the transaction.
3. Disregarded or violated any of the provisions of this chapter or any rules adopted by the commissioner.
4. Knowingly authorized, directed, connived at or aided in the publication, advertisement, distribution or circulation of any material false or misleading statement or representation concerning the licensee's business or any land, cemetery property, subdivision or membership campground or camping contract offered for sale in this or any other state.
5. Knowingly used the term "real estate broker", "cemetery broker" or "membership camping broker" without the legal right to do so.
6. Employed any unlicensed salesperson or unlicensed associate broker.
7. Accepted compensation as a licensee for performing any of the acts specified in this chapter from any person who is not authorized to provide compensation pursuant to section 32-2155.
8. Represented or attempted to represent a broker other than the broker to whom the salesperson or associate broker is licensed.
9. Failed, within a reasonable time, to account for or to remit any monies, to surrender to the rightful owner any documents or other valuable property that comes into the licensee's possession and that belongs to others, or to issue an appraisal report on real property or cemetery property in which the licensee has an interest, unless the nature and extent of the interest are fully disclosed in the report.
10. Paid or received any rebate, profit, compensation or commission in violation of this chapter.
11. Induced any party to a contract to break the contract for the purpose of substituting a new contract with the same or a different principal, if the substitution is motivated by the personal gain of the licensee.
12. Placed a sign on any property offering it for sale or for rent without the written authority of the owner or the owner's authorized agent.
13. Solicited, either directly or indirectly, prospects for the sale, lease or use of real property, cemetery property or membership camping contracts through a promotion of a speculative nature involving a game of chance or risk or through conducting lotteries or contests that are not specifically authorized under this chapter.
14. Failed to pay to the commissioner the renewal fee as specified in this chapter promptly and before the time specified.
15. Failed to keep an escrow or trust account or other record of monies deposited with the licensee relating to a real estate transaction.
16. Commingled the monies or other property of the licensee's principal or client with the licensee's own or converted these monies or property to the licensee or another.
17. Failed or refused on demand to produce any document, contract, book, record, information, compilation or report that is in the licensee's possession or that the licensee is required by law to maintain concerning any real estate, cemetery or membership camping business, services, activities or transactions involving or conducted by the licensee for inspection by the commissioner or the commissioner's representative.
18. Failed to maintain a complete record of each transaction that comes within this chapter.
19. Violated the federal fair housing law, the Arizona civil rights law or any local ordinance of a similar nature.
20. Tendered to a buyer a wood infestation report in connection with the transfer of residential real property or an interest in residential real property knowing that wood infestation exists or that the wood infestation report was inaccurate or false as of the date of the tender or that an inspection was not done in conjunction with the preparation of the wood infestation report.
21. As a licensed broker, failed to exercise reasonable supervision over the activities of salespersons, associate brokers or others under the broker's employ or failed to exercise reasonable supervision and control over the activities for which a license is required of a corporation, limited liability company or partnership on behalf of which the broker acts as designated broker under section 32-2125.
22. Demonstrated negligence in performing any act for which a license is required.
23. Sold or leased a property to a buyer or lessee that was not the property represented to the buyer or lessee.
24. Violated any condition or term of a commissioner's order.
25. Signed the name of another person on any document or form without the express written consent of the person.
26. As a licensed school, failed to exercise reasonable supervision over the activities for which a license is required for an owner, director, administrator or instructor in the school's employ.
B. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter if it appears that the holder or applicant has:
1. Procured or attempted to procure a license under this chapter for the holder or applicant or another by fraud, misrepresentation or deceit or by filing an original or renewal application that is false or misleading.
2. Been convicted in a court of competent jurisdiction in this or any other state of a felony or of any crime of forgery, theft, extortion, conspiracy to defraud, a crime of moral turpitude or any other like offense.
3. Made any substantial misrepresentation.
4. Made any false promises of a character likely to influence, persuade or induce.
5. Been guilty of any conduct, whether of the same or a different character than specified in this section, that constitutes fraud or dishonest dealings.
6. Engaged in the business of a real estate broker, cemetery broker or membership camping broker or real estate salesperson, timeshare salesperson, cemetery salesperson or membership camping salesperson without holding a license as prescribed in this chapter.
7. Demonstrated incompetence to perform any duty or requirement of a licensee under or arising from this chapter. For the purposes of this paragraph, "incompetence" means a lack of basic knowledge or skill appropriate to the type of license the person holds or a failure to appreciate the probable consequences of the licensee's action or inaction.
8. Violated the terms of any criminal or administrative order, decree or sentence.
9. Violated any federal or state law, regulation or rule that relates to real estate or securities or that involves forgery, theft, extortion, fraud, substantial misrepresentation, dishonest dealings or violence against another person or failure to deal fairly with any party to a transaction that materially and adversely affected the transaction. This paragraph applies equally to violations of which the licensee was convicted in any lawful federal or state tribunal and to any admissions made in any settlement agreement by the licensee to violations.
10. Failed to respond in the course of an investigation or audit by providing documents or written statements.
C. A judgment based on a court's finding or stipulation of fraud by a licensee following a trial on the merits or a criminal conviction of a licensee that results in a payment from the real estate recovery fund is prima facie evidence of a violation and grounds for discipline under this section.
D. The commissioner may deny, suspend or revoke the issuance of a license on application by a corporation, a limited liability company or a partnership if it appears that an owner, officer, director, member, manager, partner, stockholder owning ten percent or more of the stock in the corporation or limited liability company or person exercising control of the entity is a current or former licensee whose license as a broker or a salesperson has been denied, suspended or revoked.
E. The lapsing or suspension of a license by operation of law or by order or decision of the commissioner or a court of law or the voluntary surrender of a license by a licensee does not deprive the commissioner of jurisdiction to do any of the following:
1. Proceed with any investigation of or action or disciplinary proceeding against the licensee.
2. Render a decision suspending or revoking the license or denying the renewal or right of renewal of the license.
3. Assess a civil penalty pursuant to section 32-2160.01.
F. For the purposes of this section:
1. "Letter of concern" means an advisory letter to notify a licensee that, while the conduct or evidence does not warrant disciplinary action, the commissioner believes that the licensee should modify or eliminate certain practices and that continuation of the activities may result in disciplinary action against the licensee.
2. "Provisional license" means a license that the department issues and that allows a licensee to practice subject to either a consent order as prescribed in section 32-2153.01 or the commissioner's terms, conditions and restrictions. END_STATUTE
Sec. 8. Legislative intent
The legislature intends to:
1. Establish a separate type of real estate license under the State real estate department for individuals who are retained exclusively to assist others in the purchase, sale and exchange of timeshare interests.
2. Narrow the scope of the training and the examination requirements for applicants for timeshare salesperson licenses and thereby reduce the barriers for employment while protecting the public by requiring that all purchases, sales and exchanges be performed under the purview of a licensed real estate broker and in full compliance with the specified statutory and regulatory requirements appliable to timeshare sales.
Sec. 9. Effective date
This act is effective from and after June 30, 2026.