Enforcement & Compliance

Each case is unique. The outcome depends on the findings in the investigation. If the Department finds that you have violated the Arizona Real Estate laws: Arizona Revised Statutes (A.R.S.) Title 32, Chapter 20 or Arizona Administrative Code (A.A.C.) Title 4, Chapter 28, you may be issued one of the following:

1. Advisory Letter of Concern (ALOC): A non-disciplinary action for violation of law that does not warrant disciplinary action. A warning.
2. Accelerated Settlement Agreement (ASA): Disciplinary actions for minor violations. A licensee must complete the specific terms of the ASA in order to restore their license to good standing.
3. Consent Order (CO): Disciplinary actions for serious violations of law. The licensee must complete the specific terms of the Order in order to restore their license to good standing.
4. License Denial: Disciplinary action for violations of law that have harmed the public.
5. Summary Suspension of your license
6. A Cease and Desist Order
7. Referral of the matter to the Arizona Attorney General for hearing

The Department cannot provide legal advice or recommend attorneys. You may choose to obtain legal counsel for any disciplinary proceedings with the Department. Two legal resources you may find helpful are State Bar of Arizona and AZ Law Help.

The Department will send you an online payment request link to the email that you have on file. The payment must be paid in full through the payment request link. Please refer to the cover letter for your proposed Order for more information. The Department accepts payments from all major credit card/debit card servicers.

No. The Department does not offer payment plans.

Yes. Once a disciplinary action (ASA, Consent Order, etc.) is issued by the Department, it becomes public record and becomes part of the Licensee's file. It will remain publicly accessible while the case is open. Once you have completed the terms of the Order, you may request the Order be removed from the public database. Removal of the Order is at the Department’s discretion upon your request.

An ISC is a meeting between yourself, the Department's representative and the Attorney General's representative. It is designed to settle the matter prior to going to a hearing. There will not be an Administrative Law Judge in attendance nor will witnesses be allowed to attend. The ISC is a closed meeting designed to find common understanding of the subject issue/s. If you have an attorney, your attorney may attend the ISC.

The Notice of Hearing will provide you the date, time and location of the scheduled hearing. If you have a conflict with the scheduled hearing date and time contact the attorney assigned to your case, the Department (through the Message Center), or the Office of Administrative Hearings.

When a licensee's license is revoked, that licensee may not conduct any real estate activity for which a real estate license is required. The licensee will be severed from the employing broker. The action will stand unless the licensee chooses to appeal the decision or reapplies for a license. If a licensee chooses to reapply, the licensee must wait 2 years before re-applying for a license.

Any appeal must be in writing and delivered to the Department. You may send communication through the ADRE Message Center, mail the response, or schedule an appointment to drop off the written request. Once received, the Department will send you an Appeal Acknowledgement.

The Consent Order you signed may have required you to submit monthly or quarterly reports. Please refer to your Compliance Introduction letter to determine the document submission requirements.

Your compliance requirements are listed in the Order itself and are described in the Compliance Introduction letter. The letter and the Order were sent to you throught the Department Message Center and by USPS mail to the address on file.

Submit your late submission as soon as possible. If you know you will not be able to submit by the due date, request an extension through the Department Message Center.

The Department has an internal process to conduct a final review of your case and your compliance during the time of the Order. If you have been compliant, the Department will contact you when your Order is closed. If you have not been consistently compliant or have been inactive, your Order may have been extended. Please contact your Compliance Specialist (through the Message Center) for more information.

Go to the ADRE Public Database and search the education courses by using the filters that fit your needs. Review your Order and your Compliance Introduction letter to ensure the classes you attend fit the Order requirements. Classes used to meet compliance requirements must be "Live Classroom" and cannot be used to meet license renewal CE hour requirements.

Licensees are limited in the ability to hold a game of chance, raffle, lottery, contest or games of risk. See A.R.S. section 32-2153(A)(13). Additionally, there are other state statutes regarding the registration and regulation of games of chance, games of risk, lotteries, raffles and contests. The Department recommends licensees seek legal advice and the advice of their broker prior to engaging in these activities.

“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. A.R.S. section 32-2101(17)

An Arizona licensed broker may pay compensation to and receive compensation from a broker lawfully operating in another state. See A.R.S. section 32-2163 (A).

An Arizona broker may enter into a written cooperation agreement with an out-of-state broker. See A.R.S. section 32-2163.

Each employing broker shall have and maintain a definite place of business or an active and valid statutory agent on file with the Corporation Commission. The employing broker must notify the department of the definite place of business or the valid statutory agent. A.R.S. section 32-2126.

Each designated broker and, if applicable, each employing broker shall cause a sign to be affixed at the entrance to the broker’s place of business, in a place and position clearly visible to all entering the place of business, with the name of the broker, the name under which the broker is doing business if other than the broker’s given name, and sufficient wording to establish that the person is a real estate broker, cemetery broker or membership camping broker. In addition to any other applicable law, the sign shall conform to rules adopted by the commissioner. A.R.S. section 32-2136.
 

Unless otherwise provided in writing by all parties to a transaction, any licensed real estate broker who does not immediately place all monies entrusted to the broker, in the broker’s capacity as a real estate broker, in a neutral escrow depository in this state shall on receipt place all such monies in a trust fund account in a federally insured or guaranteed account in a depository located in this state... See A.R.S. section 32-2151 for more information.

See A.R.S. section 32-2151.

See A.R.S. section 32-2151.

Broker's entrusted with client funds and property must recognize the funds are not the brokerage's funds, but the funds of others (client, tenant, property owner, etc.). GAAP principles are designed to insure monies belonging to another are correctly and accurately recorded, preserve trust, and provide transparency in financial reporting to the client or others. The Financial Accounting Standards Board (FASB) establishes finanancial accounting and reporting standards for public and private companies and not-for-profit organizations ( https://fasb.org). The FASB has established 10 principles by which to standardize, define and regulate the reporting of financial information. Refer to your accountant, broker, attorney, these or other resources if you are unfamiliar with GAAP: United State Department of Justice GAAP Guide, Thompson Reuters Tax & Accounting Understanding GAAP Rules (2024), Financial Accounting Foundation, or the Financial Accounting Standards Board.

Except as provided by section 32-2174, subsection C, a broker shall not grant any person authority to withdraw monies from the broker’s trust fund account unless that person is a licensee under that broker’s license. A.R.S. section 32-2151.01(B) and The designated broker for a property management firm may authorize either a licensee or an unlicensed natural person in the direct employ of the broker to transfer monies or to be a signatory on the property management firm’s trust accounts. If the person who is designated to sign on behalf of the designated property management broker is an unlicensed person, that person shall be a bona fide officer, member, principal or employee of the property management firm. The broker may require dual signatures on checks and may use a facsimile signature according to the broker’s business policies and procedures. The designation of a licensed or unlicensed person to transfer monies or to be a signatory on trust accounts does not lessen the broker’s responsibility or liability for any monies handled. A.R.S. section 32-2174(C).

An employing broker shall not assign a real estate employment agreement to another broker without the express written consent of all parties to the agreement at the time of the assignment. See A.R.S. section 32-2151.02 for more information.

Property Management agreements must be in clear, unambiguous language and shall: (a) State all material terms and conditions of the property management firm’s services, obligations, duties and responsibilities to the property owner.
(b) Be signed by the property owner or his agent and the property management
firm’s designated broker or the broker’s authorized real estate licensee.
(c) Specify a beginning and an ending date.
(d) Contain cancellation provisions that are agreeable to both parties.
(e) Provide for the manner of disposition of all monies collected by the property
management firm, including any tenant deposits.
(f) Specify the type and frequency of status reports to the owner.
(g) State the amount and purpose of monies the property management firm holds
as an operating reserve for emergency and other purposes.
(h) Provide for the disposition and allocation of interest earned on trust account
monies.
(i) State the terms and conditions of compensation the property owner pays for
services pursuant to the property management agreement.
(j) Not be assigned to another licensee or licensed entity without the express written
consent of the property owner.
The agreements may contain additional elements agreed to by both the broker and client. See A.R.S. 32-2173 for more information.

No. A.R.S. 32-2173(1)(b) requires the Designated Broker or the broker's authorized real estate licensee to sign all property management agreements so a seperate review is not necessary.

Yes. Property Management trust accounts must be designated as trust accounts by including words like "Trust Account", "Fiduciary Account", "In Trust for" (individual name or entity name),"Trustee for" (individual or entity name), "Fiduciary for" (individual or entity name) or other appropriate name indicating the funds are not owned by the broker but held in trust for another as part of the account title. See A.R.S. sections 32-2151 and 32-2174.