Arizona Affidavit Of Disclosure
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Arizona Affidavit Of Disclosure

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Using the Arizona Affidavit of Disclosure

Using the Arizona Affidavit of Disclosure

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  • Requirements for use of Affidavit Use of the Affidavit of Disclosure is required under Arizona Revised Statute 33-422, enacted on May 18, 2000. It’s intent is the help better manage growth in “unincorporated areas, something that was taking place at a rapid pace in the boom prior to 2006.
  • Purchase Contract Clauses It’s use is included as a clause in the standard AAR Residential Purchase Contract and in the AAR Vacant Land Purchase Contract . Included as section 4d of AAR Residential Contract Included as section 4h of AAR Vacant Land Contract Both contracts require it to be delivered to Buyer (or Buyers representative) within 5 days of contract acceptance. These clauses contain the following wording: Affidavit of Disclosure : “If the Premises is located in an unincorporated area of the county, and five or fewer parcels of property other than subdivided property are being transferred, the Seller shall deliver a completed Affidavit of Disclosure in the form required by law to the Buyer within five (5) days after Contract acceptance. Buyer shall provide notice of any Affidavit of Disclosure items disapproved within the Inspection Period or five (5) days after receipt of the Affidavit of Disclosure, whichever is later.
  • What is an unincorporated area? Any area not within the boundaries of an incorporated City, Town or Village. Unincorporated areas typically fall within the jurisdiction of the county which they exist, with regard to zoning laws, flood control, roads and utility services. In this slide, the white area is a true unincorporated AND unsubdivided area. The areas around it in cyan and gray are unsubdivided and have similar zoning rules but are under the jurisdiction of Cave Creek and Phoenix respectively (not unincorporated. The beige area is a subdivided area in Scottsdale. The blue area to the north is zoned commercial and the green area is a school. Be careful, some unincorporated areas may fall under the jurisdiction of a neighboring town makes it likely that the area will be developed under the guidance of that town in the future.
  • Subdivided vs. Unsubdivided Land that is being divided into 6 or more parcels that are smaller than 36 acres (see below) will be considered as “subdivided” land and will require a public report. Property being divided into 5 or fewer parcels can be “split” and will not require a public report. If this property is in an unincorporated area of the county it will require an Affidavit of Disclosure. Arizona State Law defines “subdivided land” as land divided or proposed to be divided for sale or lease into six or more lots or parcels smaller than thirty-six acres. (A.R.S. §32-2181 et seq.)
  • Splitting Unsubdivided Parcels A parcel of land that is less than 36 acres can be split by it’s owner into separate parcels. The owner must comply with existing zoning requirements and any split cannot result in an “upzoning” situation (example: if property is zoned Residential 1 home per 5 acres it cannot be changed to 1 home per acre or commercial, etc.). Typically the owner has the property re-surveyed by a licensed surveyor. The new surveys showing the new parcels are recorded with the county. Owner applies for new parcel numbers from the county. If owner wishes to improve parcel they may apply for “accelerated” parcel number. County may assign a new parcel number or add a suffix to the existing parcel number to identify new parcel. Exp: Parcel 211-61-011 - a 5 acre parcel may become, 211-61-011A - a 1.1 acre parcel 211-61-011B - a 1.1 acre parcel 211-61-011C - a 1.1 acre parcel 211-61-011D - a 1.7 acre parcel
  • Information included in Affidavit The Affidavit of Disclosure contains information describing the following: Legal and Physical access to the property. Keep in mind that the legal access may not be the most direct, best or even most commonly used means of accessing the property. Floodplains, washes etc. should be identified and flood maps investigated. Access to public utilities such as electricity, gas, telephone and internet services. Police, Fire, Ambulance, etc. If property is not readily accessible by emergency vehicles the emergency services providers may not be held liable for delays. Availability of water services or wells. Functionality of septic systems or results of or status of any soil/percolation tests that have been performed. Any zoning deficiencies or non compliances to existing zoning laws. (requiring a variance) Proximity to military installations (noise, presence of dangerous weapons, etc.)
  • Buyers Responsibilities The Buyer upon receipt of the Affidavit should investigate any items that are material to the purchase and use of the property. In addition to the items we discussed previously concerning emergency services, utilities, legal access, usability of purpose. Some other items that may be investigated include: Any questionable statements. Validate property is appropriate for plan usage. Verify the legality and compliance of any improvements. Investigate future plans for this parcel and adjacent and nearby parcels.
  • Buyers Receipt of Affidavit and Effects on the Sale By statute, the Seller has until 7 days prior to transfer of property to provide (the AAR contract states 5 days after contract acceptance). The Buyer should acknowledge the receipt of Affidavit and has 5 days after receipt to rescind transaction. Buyer should cancel in writing. If transaction completes, seller must record Affidavit at the same time as the new Deed is recorded with the county. This is usually done by the Title Company as part of the transaction. Note: Since Seller is required to record, make sure the recording fee is listed on the Seller’s side of HUD-1.
  • How is the Statute Enforced? The statute requiring the use of the Affidavit is enforced as a civil requirement. There is no criminal penalties or mechanism for criminal enforcement for failure to complete or file the Affidavit. Failure to provide the Affidavit or knowingly filing inaccurate information may result in Civil liabilities including damages or rescission of the sale. In addition an agents failure to inform the Seller of their responsibilities could constitute a Breach of Duty. This could result in either the Listing Broker, Buyer Broker or both being held liable for damages that result from failure to disclose.
  • The author of this course and instructor would like to thank you for your participation . If you enjoyed the course and found it useful, please refer us to you friends and colleagues.

Arizona Affidavit Of Disclosure Arizona Affidavit Of Disclosure Presentation Transcript

  • Using the Affidavit of Disclosure
  • Lesson Objectives
    • Understand the requirements for use of the Affidavit
    • Explain “subdivided” and “unsubdivided” properties
    • Outline the Sellers responsibility with regard to the Affidavit
    • Identify the information disclosed by the Affidavit
    • Identify the Buyers options upon receipt of Affidavit
    • Recognize how the requirements are enforced
  • Requirements for use of the Affidavit A.R.S § 33-422
    • Enacted by the Arizona Legislature as part of the Growing Smarter Plus legislative package
    • Effective date – May 18, 2000
    • Required by ARS 33-422
    • Enacted to better manage growth in unincorporated areas
  • Purchase Contract Clauses
    • Included as section 4d of AAR Residential Contract
    • Included as section 4h of AAR Vacant Land Contract
    Affidavit of Disclosure: “If the Premises is located in an unincorporated area of the county, and five or fewer parcels of property other than subdivided property are being transferred, the Seller shall deliver a completed Affidavit of Disclosure in the form required by law to the Buyer within five (5) days after Contract acceptance. Buyer shall provide notice of any Affidavit of Disclosure items disapproved within the Inspection Period or five (5) days after receipt of the Affidavit of Disclosure, whichever is later.
  • What is an “Unincorporated” area? An unincorporated area is land located outside the corporate limits of a city or town. ( further defined in A.R.S § 9-101) Cave Creek Commercial (Scotts) Phoenix Scottsdale School
  • What is “subdivided” land?
    • Subdivided land requires an approved “Public Report”
    • Unsubdivided land can only be “split” into 5 parcels
    • Unsubdivided land requires an Affidavit of Disclosure
    “ Improved or unimproved land or lands divided or proposed to be divided for the purpose of sale or lease, whether immediate or future, into six or more lots , parcels or fractional interests”
  • How is “unsubdivided” land split?
    • Owner of a split able parcel must comply with existing zoning requirements (split cannot result in “upzoning” )
    • Parcel is surveyed by licensed surveyor
    • Owner records the survey with county
    • Owner applies for new Parcel numbers
    • Parcel may receive complete “new” parcel number, or parcel suffix to identify split
  • What information is included in the Affidavit of Disclosure?
    • Legal Access
    • Physical Access
    • Flood areas, floodplains, washes.
    • Public utility services (electricity, gas, phone/internet)
    • Police and Fire and emergency services
    • Wells or water availability
    • Septic systems, percolation tests
    • Zoning deficiencies
  • What should a Buyer do with in the Affidavit of Disclosure?
    • Read it!
    • Investigate any items material to buyer
    • Investigate any questionable statements
    • Verify the legality and compliance of any improvements
    • Investigate future plans for this parcel
    • Investigate future plans for adjacent and nearby parcels
  • How does receipt of Affidavit affect Sale?
    • Seller has until 7 days prior to COE to provide (Unless contract specifies other date)
    • Affidavit should be signed and notarized by Seller
    • Buyer has 5 days after receipt of Affidavit to rescind transaction
    • Buyer may cancel in writing
    • Seller must record executed Affidavit at same time as Deed is recorded
  • How is the Statute enforced?
    • No criminal mechanism or penalty assessed for failure to provide
    • Seller may have civil liability
    • Buyer’s remedies include damages or rescission of sale
    • Agents failure to inform Seller could constitute Breach of Duty
    • Listing Broker may be help liable for damages
    • Buyer Broker may be held liable for damages
  • Lesson Review
    • Now understand the requirements for use of the Affidavit
    • Explained “subdivided” and “unsubdivided” properties
    • Outlined the Sellers responsibility with regard to the Affidavit
    • Identified the information disclosed by the Affidavit
    • Identified the Buyers options upon receipt of Affidavit
    • Now recognize how the requirements are enforced