Arizona Laws 32-2186. Real estate recovery fund; liability limits; definitions
A. The commissioner shall establish and maintain a real estate recovery fund for the benefit of any person aggrieved by any act, representation, transaction or conduct of a licensed real estate or cemetery broker or real estate or cemetery salesperson that violates this chapter or the rules adopted pursuant to this chapter. The fund shall only pay for a loss that is an actual and direct out-of-pocket loss to the aggrieved person directly arising out of the real estate or cemetery transaction, including reasonable attorney fees and court costs, in which the licensee either:
Terms Used In Arizona Laws 32-2186
- 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. See Arizona Laws 32-2101
- 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. See Arizona Laws 32-2101
- 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. See Arizona Laws 32-2101
- Commissioner: means the state real estate commissioner. See Arizona Laws 32-2101
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Fraud: Intentional deception resulting in injury to another.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Judgment: means either:
(a) A final judgment in a court of competent jurisdiction. See Arizona Laws 32-2186
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- 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. See Arizona Laws 32-2101
- 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. See Arizona Laws 32-2101
- Member: means a member of the real estate advisory board. See Arizona Laws 32-2101
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: means any individual, corporation, partnership or company and any other form of multiple organization for carrying on business, foreign or domestic. See Arizona Laws 32-2101
- Property: includes both real and personal property. See Arizona Laws 1-215
- 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. See Arizona Laws 32-2101
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- 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. See Arizona Laws 32-2101
- United States: includes the District of Columbia and the territories. See Arizona Laws 1-215
1. Performed acts that required a real estate or cemetery license pursuant to this chapter.
2. Engaged in fraud or misrepresentation while acting as a principal in the purchase or sale of real property and the aggrieved person relied on the broker‘s or salesperson‘s licensed status.
B. The fund’s liability shall not exceed:
1. Thirty thousand dollars for each transaction, regardless of the number of persons aggrieved or the number of licensees or parcels of real estate involved.
2. Ninety thousand dollars for each licensee.
C. The liability of the fund for the acts of a licensed real estate or cemetery broker or real estate or cemetery salesperson is terminated upon the issuance of orders authorizing payments from the fund in an aggregate amount as prescribed by subsection B of this section.
D. A licensee acting as a principal or agent in a real estate transaction has no claim against the fund, including marital communities, corporations, limited liability companies and partnerships in which the licensee is a principal, member, general partner, officer or director, or those entities in which the licensee holds a direct or indirect interest of at least ten per cent.
E. The fund is liable to pay only against the license of a natural person, not on that of a corporation, a partnership or any other fictitious entity.
F. The fund is liable to pay only for damages arising out of a transaction in which the defendant licensee performed acts for which a real estate or cemetery license was required or when the defendant licensee, while acting as principal in the purchase or sale of real property, engaged in fraud or misrepresentation and the aggrieved person was harmed due to reliance on the defendant’s licensed status.
G. The fund is not liable for damages or losses resulting from or caused by:
1. Speculation, including lost profits and other unrealized losses.
2. Transactions for property that is located outside of this state.
3. Loans, notes, limited partnerships or other securities, regardless of whether the loss was caused by an investment in or was secured by real property.
4. A judgment entered against a bonding company if the bonding company is not a principal in the underlying real estate transaction.
5. A tenant’s conduct or neglect.
6. Vandalism.
7. Natural causes.
8. Punitive damages.
9. Postjudgment interest.
10. Undocumented transactions or losses.
H. In this article, unless the context otherwise requires:
1. "Judgment" means either:
(a) A final judgment in a court of competent jurisdiction.
(b) A criminal restitution order issued pursuant to section 13-603 or 18 United States Code § 3663.
(c) An arbitration award that includes findings of fact and conclusions of law, that has been confirmed and reduced to judgment pursuant to section 12-133 and that was rendered according to title 12 and the rules of the American arbitration association or another recognized arbitration body.
2. "Judgment debtor" means any defendant under this article who is the subject of a judgment.