HB 2141 requires real estate brokers or sales persons to provide a notice of the water supply status when advertising, promoting or selling a residential real property.

Currently, according to the Water Adequacy Program as established in A.R.S. §45-108, subdivision developers are required to obtain a determination from the state regarding the availability and quality of water supplies before marketing lots.  This law applies to new subdivisions located outside of Active Management Areas (AMAs).

Subdivision developers may obtain a determination by applying to the Arizona Department of Water Resources (ADWR) for a water adequacy report.  If the water supply is of adequate quality and satisfies the proposed demands for at least 100 years, the water supply is deemed “adequate.”  Groundwater must meet depth limitations currently set at 1,200 feet after 100 years in communities serviced by a water company and 400 feet in dry lot subdivisions.  If the water supply fails to meet these standards, it is deemed “inadequate” and must be noted on all promotional material.     

Properties that are located within an AMA must adhere to a stricter Assured Water Supply Program.  As contained in §45-576, assured water supply entails a sufficient water supply of adequate quality that will be continuously available to satisfy the demands of the proposed use for a minimum of 100 years.  Groundwater use must be consistent with the management plan of the AMA to be considered “assured.”  Furthermore, assured water means that there is a demonstrated financial capability to construct the necessary infrastructure to supply water for the proposed uses including a delivery system and any storage facilities or treatment works.

Currently, real estate brokers are not required to disclose the water supply status for residential properties, a requirement established by HB 2141.

·          Requires a real estate broker or sales person, when advertising, promoting or selling a property, to provide notice of the water supply status of a property consisting of one of the following designations:

·          “Assured water supply,”

·          “Adequate water supply,”

·          “Inadequate water supply,” or

·          “Unknown water supply.”

·          Requires that the text of this disclosure be printed in a uniform font size.

·          Requires that the disclosure be located on the first page of a multiple page document.

·          Requires that the Arizona Department of Real Estate adopt substantially similar disclosure requirements for electronic, telecommunications, and other media used to advertise, promote or sell residential real estate property. 

To read this bill in its entirety, click here.