Development Services Investigations

Frequently Asked Questions

• What does the Department of Real Estate investigate?
• How do I file a complaint with the Department of Real Estate?
• After I file a complaint, what is the process?
• What are the possible disciplinary actions that may occur?

What does the Department of Real Estate investigate?
The Department investigates violation of the real estate law by developers of subdivisions, membership campgrounds, timeshares and private cemeteries.

How do I file a complaint with the Department of Real Estate?
To begin an investigation, the Department must determine two things:

1. That the complaint or information relates to possible violations of real estate statutes or rules.
2. That the people and/or entities involved are under the Department’s jurisdiction.

A.R.S. §32-2108 requires that complaints filed with the Department be in writing and signed by the complainant.  The complaint must allege conduct which violates Department laws or rules.

If you file a complaint, include:

• Your full name and address and that of each person/developer against whom the complaint is made (the “respondent”).
• A clear and concise statement, in detail, describing the facts surrounding the incident(s), including:
  • The time and place of occurrences;
  • Who was involved or present;
  • What activities occurred which you believe to be illegal;
  • The names, addresses and telephone numbers of any witnesses.
• Legible copies of all transaction documents and related correspondence (contracts, closing documents, letters, etc.).

After I file a complaint, what is the process?
The complaint is reviewed and the person filing the complaint is notified as to which Investigator is assigned to investigate the complaint.  The Investigator sends each developer involved a copy of the complaint and a request for a written response.  The Investigator contacts any other witnesses and may recontact the complaining person or the respondent for additional information.  After the assigned Investigator reviews the information gathered, the Department determines whether it believes it can prove that the respondent violated one or more real estate laws or Commissioner’s Rules.  Based upon that determination, one of the following decisions is made:

• Close the file without action.
• Refer the case to the Attorney General’s Office for prosecution.
• Negotiate settlement by means of a consent order.

Administrative sanctions are not pursued unless warranted by a preponderance of the evidence.

What are the possible disciplinary actions that may occur?
The Development Investigations Division forwards the case to the Enforcement and Compliance Division for review.  This Division reviews the case to determine if there is sufficient evidence to pursue disciplinary action.  If not, the case is closed.  If there is indication of a violation, but it is minor or technical in nature, the Department may issue a non-disciplinary Letter of Concern.  Although non-disciplinary, a Letter of Concern remains in the file and may be considered when determining the appropriate outcome in any future similar complaint.

When the Department believes the evidence to be sufficient to support discipline, it attempts to negotiate a settlement (Consent Order) with the respondent.  If an agreement is reached, the Department and the respondent sign the Consent Order and it becomes effective immediately.  There is no appeal of a Consent Order, since the respondent voluntarily agrees to it.

If a Consent Order cannot be negotiated, or the violation is so severe that the Department will only accept suspension or revocation of the respondent’s license, it refers the case to the Attorney General’s Office.  A Notice of Hearing and Complaint is prepared which the Department then sends to the respondent.  This notice identifies which statutes or rules the respondent has allegedly violated, and sets a date and time for hearing.  An administrative law judge hears the matter in accordance with the Administrative Procedures Act.  After the hearing, the administrative law judge prepares and sends to the Commissioner a recommended Order.  The Commissioner either adopts, modifies or rejects the order and issues a Commissioner’s Final Order.  That order may be appealed to the Superior Court.

rev. 10/09