THE ARIZONA LEGISLATURE CONVENED -

The First Regular Session of the 48th Arizona Legislature 2nd session convened on Monday, January 14th, 2008, at Noon. In 2008 we will once again be facing some hard ongoing issues. These include HOA regulation of For Sale Signs, water adequacy disclosure by real estate licensees, transportation, property taxes and loan originator licensing among many others. AAR will persist following the issues that impact our members and will continue to work closely with the Governor and the legislature next session on these critical concerns. 

LEGISLATIVE UPDATE -

There are two bills making their way through the legislature that we’d like to bring to your attention. 

The first one, HB2141: home sales; water supply disclosure would require real estate brokers or sales persons to provide a notice of the government designated water supply status when advertising, promoting or selling a residential real property. This would mean that prior to advertising a residential property for sale, the REALTOR would be required to seek out that information and disclose it on all advertising, signs, websites, contracts, etc. 

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.  Water adequacy laws and assured water supply for new subdivisions did not come into existence until 1973 and 1980 respectively. For subdivisions developed prior to 1973, no water adequacy determination exists. Lot splits also have no water adequacy determination.

Provisions

• 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. 

REALTOR and Arizona House Representative Mark Anderson spoke in favor of the bill stating that he thought REALTORS should provide that information. Unfortunately, this legislation would put the onus on REALTORS and brokers to once again disclose information that may or may not be current and readily available from the state. AAR strongly opposes this bill. 

The second bill we’d like to bring to your attention is HB2611; HOAs; REAL ESTATE SIGNS. This bill, sponsored by Representative Lucy Mason, would effectively undo the gains made with last year’s HOA For Sale Sign law. If passed, it would allow every individual HOA to regulate content, size, color, height, etc. of for sale signs in their communities. This means every HOA would be able to dictate a specific sign for their community and force homeowners and REALTORS to buy them. 

Look for Calls to Action against these bills soon!!