32-2153

32-2153. Grounds for denial, suspension or
revocation of licenses; letters of concern; provisional license;
retention of jurisdiction by commissioner; definitions

A. The commissioner may suspend or revoke a license, deny the issuance of a
license, issue a letter of concern to a licensee, issue a provisional license or deny the
renewal or the right of renewal of a license issued under this chapter if it appears that
the holder or applicant, within five years immediately preceding, in the performance of
or attempt to perform any acts authorized by the license or by this chapter, has:

1. Pursued a course of misrepresentation or made false promises, either directly or
through others, whether acting in the role of a licensee or a principal in a transaction.

2. Acted for more than one party in a transaction without the knowledge or consent
of all parties to the transaction.

3. Disregarded or violated any of the provisions of this chapter or any rules
adopted by the commissioner.

4. Knowingly authorized, directed, connived at or aided in the publication,
advertisement, distribution or circulation of any material false or misleading statement
or representation concerning the licensee's business or any land, cemetery property,
subdivision or membership campground or camping contract offered for sale in this or any
other state.

5. Knowingly used the term "real estate broker", "cemetery broker" or "membership
camping broker" without legal right to do so.

6. Employed any unlicensed salesperson or unlicensed associate broker.

7. Accepted compensation as a licensee for the performance of any of the acts
specified in this chapter from any person other than the licensed broker to whom the
licensee is licensed, the licensed professional corporation of which the licensee is an
officer and shareholder or the licensed professional limited liability company of which
the licensee is a member or manager.

8. Represented or attempted to represent a broker other than the broker to whom the
salesperson or associate broker is licensed.

9. Failed, within a reasonable time, to account for or to remit any monies, to
surrender to the rightful owner any documents or other valuable property coming into the
licensee's possession and that belongs to others, or to issue an appraisal report on real
property or cemetery property in which the licensee has an interest, unless the nature
and extent of the interest are fully disclosed in the report.

10. Paid or received any rebate, profit, compensation or commission in violation of
this chapter.

11. Induced any party to a contract to break the contract for the purpose of
substituting a new contract with the same or a different principal, if the substitution
is motivated by the personal gain of the licensee.

12. Placed a sign on any property offering it for sale or for rent without the
written authority of the owner or the owner's authorized agent.

13. Solicited, either directly or indirectly, prospects for the sale, lease or use
of real property, cemetery property or membership camping contracts through a promotion
of a speculative nature involving a game of chance or risk or through conducting
lotteries or contests that are not specifically authorized under this chapter.

14. Failed to pay to the commissioner the renewal fee as specified in this chapter
promptly and before the time specified.

15. Failed to keep an escrow or trust account or other record of funds deposited
with the licensee relating to a real estate transaction.

16. Commingled the money or other property of the licensee's principal or client
with the licensee's own or converted that money or property to the licensee or another.

17. Failed or refused upon demand to produce any document, contract, book, record,
information, compilation or report that is in the licensee's possession or that the
licensee is required by law to maintain concerning any real estate, cemetery or
membership camping business, services, activities or transactions involving or conducted
by the licensee for inspection by the commissioner or the commissioner's representative.

18. Failed to maintain a complete record of each transaction which comes within this
chapter.

19. Violated the federal fair housing law, the Arizona civil rights law or any local
ordinance of a similar nature.

20. Tendered to a buyer a wood infestation report in connection with the transfer of
residential real property or an interest in residential real property knowing that wood
infestation exists or that the wood infestation report was inaccurate or false as of the
date of the tender or that an inspection was not done in conjunction with the preparation
of the wood infestation report.

21. As a licensed broker, failed to exercise reasonable supervision over the
activities of salespersons, associate brokers or others under the broker's employ or
failed to exercise reasonable supervision and control over the activities for which a
license is required of a corporation, limited liability company or partnership on behalf
of which the broker acts as designated broker under section 32-2125.

22. Demonstrated negligence in performing any act for which a license is required.

23. Sold or leased a property to a buyer or lessee that was not the property
represented to the buyer or lessee.

24. Violated any condition or term of a commissioner's order.

25. Signed the name of another person on any document or form without the express
written consent of the person.

26. As a licensed school, failed to exercise reasonable supervision over the
activities for which a license is required for an owner, director, administrator or
instructor in the school's employ.

B. The commissioner may suspend or revoke a license, deny the issuance of a
license, issue a letter of concern to a licensee, issue a provisional license or deny the
renewal or the right of renewal of a license issued under this chapter when it appears
that the holder or applicant has:

1. Procured or attempted to procure a license under this chapter for the holder or
applicant or another by fraud, misrepresentation or deceit, or by filing an original or
renewal application which is false or misleading.

2. Been convicted in a court of competent jurisdiction in this or any other state
of a felony or of any crime of forgery, theft, extortion, conspiracy to defraud, a crime
of moral turpitude or any other like offense.

3. Made any substantial misrepresentation.

4. Made any false promises of a character likely to influence, persuade or induce.

5. Been guilty of any conduct, whether of the same or a different character than
specified in this section, which constitutes fraud or dishonest dealings.

6. Engaged in the business of a real estate, cemetery or membership camping broker
or real estate, cemetery or membership camping salesperson without holding a license as
prescribed in this chapter.

7. Not shown that the holder or applicant is a person of honesty, truthfulness and
good character.

8. Demonstrated incompetence to perform any duty or requirement of a licensee under
or arising from this chapter. For the purposes of this paragraph, "incompetence" means a
lack of basic knowledge or skill appropriate to the type of license the person holds or a
failure to appreciate the probable consequences of the licensee's action or inaction.

9. Violated the terms of any criminal or administrative order, decree or sentence.

10. Violated any federal or state law, regulation or rule that relates to real
estate or securities or that involves forgery, theft, extortion, fraud, substantial
misrepresentation, dishonest dealings or violence against another person or failure to
deal fairly with any party to a transaction that materially and adversely affected the
transaction. This paragraph applies equally to violations of which the licensee was
convicted in any lawful federal or state tribunal and to any admissions made in any
settlement agreement by the licensee to violations.

11. Failed to respond in the course of an investigation or audit by providing
documents or written statements.

C. A judgment based on a court's finding or stipulation of fraud by a licensee
following a trial on the merits or a criminal conviction of a licensee that results in a
payment from the real estate recovery fund is prima facie evidence of a violation and
grounds for discipline under this section.

D. The commissioner may deny, suspend or revoke the issuance of a license upon
application by a corporation, a limited liability company or a partnership if it appears
that an owner, officer, director, member, manager, partner, stockholder owning ten per
cent or more of the stock in the corporation or limited liability company or person
exercising control of the entity is a current or former licensee whose license as a
broker or a salesperson has been denied, suspended or revoked.

E. The lapsing or suspension of a license by operation of law or by order or
decision of the commissioner or a court of law or the voluntary surrender of a license by
a licensee shall not deprive the commissioner of jurisdiction to do any of the following:

1. Proceed with any investigation of or action or disciplinary proceeding against
the licensee.

2. Render a decision suspending or revoking the license, or denying the renewal or
right of renewal of the license.

3. Assess a civil penalty pursuant to section 32-2160.01.

F. For the purposes of this section:

1. "Letter of concern" means an advisory letter to notify a licensee that, while
the conduct or evidence does not warrant other disciplinary action, the commissioner
believes that the licensee should modify or eliminate certain practices and that
continuation of the activities may result in further disciplinary action against the
licensee.

2. "Provisional license" means a license that the department issues and that allows
a licensee to practice subject to either a consent order as prescribed in section
32-2153.01 or the commissioner's terms, conditions and restrictions.