HB2486 - Distressed residential property

REFERENCE TITLE: distressed residential property State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HB 2486 Introduced by Representative De Los Santos AN ACT Amending sections 32-2101, 32-2121, 32-2122 and 32-2160.01, arizona revised statutes; Repealing title 44, chapter 15.1, article 1, Arizona Revised Statutes; amending title 44, chapter 15.1, Arizona Revised Statutes, by adding a new article 1; relating to RESIDENTIAL property. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Section 32-2101, Arizona Revised Statutes, is amended to read: START_STATUTE 32-2101. Definitions In this chapter, unless the context otherwise requires: 1. "Acting in concert" means evidence of collaborating to pursue a concerted plan. 2. "Address of record" means any of the following: (a) The address where a licensee practices or is otherwise employed. (b) A licensee's residential address. (c) The address of a licensee's statutory agency who is registered as the licensee's statutory agent with the corporation commission. This subdivision applies only if notice of the statutory agent is given to the department pursuant to section 32-2126. 3. "Advertising" means attempting by publication, dissemination, exhibition, solicitation or circulation, oral or written, or for broadcast on radio or television to induce directly or indirectly any person to enter into any obligation or acquire any title or interest in lands subject to this chapter, including the land sales contract to be used and any photographs, drawings or artist's presentations of physical conditions or facilities existing or to exist on the property. Advertising does not include: (a) Press releases or other communications delivered to newspapers, periodicals or other news media for general information or public relations purposes if no charge is made by the newspapers, periodicals or other news media to publish or use any part of these communications. (b) Communications to stockholders as follows: (i) Annual reports and interim financial reports. (ii) Proxy materials. (iii) Registration statements. (iv) Securities prospectuses. (v) Applications for listing of securities on stock exchanges. (vi) Prospectuses. (vii) Property reports. (viii) Offering statements. 4. "Affiliate" means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person specified. 5. "Associate broker" means a licensed broker who is employed by another broker. Unless otherwise specifically provided, an associate broker has the same license privileges as a salesperson. 6. "Barrier" means a natural or man-made geographic feature that prevents parcels of land from being practicably, reasonably and economically united or reunited and that was not caused or created by the owner of the parcels. 7. "Blanket encumbrance": (a) Means either: (i) Any mortgage, any deed of trust or any other encumbrance or lien that secures or evidences the payment of monies and that affects more than one lot or parcel of subdivided land. (ii) An agreement that affects more than one lot or parcel by which the subdivider holds the subdivision under an option, contract to sell or trust agreement. (b) Does not include taxes and assessments that are levied by public authority. 8. "Board" means the real estate advisory board. 9. "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. 10. "Business broker" means a real estate broker who acts as an intermediary or agent between sellers or buyers, or both, in the sale or purchase, or both, of businesses or business opportunities where a lease or sale of real property is either a direct or incidental part of the transaction. 11. "Camping site" means a space that is designed and promoted for the purpose of locating any trailer, tent, tent trailer, pickup camper or other similar device used for camping. 12. "Cemetery" or "cemetery property" means any one, or a combination of more than one, of the following in a place that is used, or intended to be used, and dedicated for cemetery purposes: (a) A burial park, for earth interments. (b) A mausoleum, for crypt or vault entombments. (c) A crematory, or a crematory and columbarium, for cinerary interments. (d) A cemetery plot, including interment rights, mausoleum crypts, niches and burial spaces. 13. "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. (b) Offers for another or for the person's own account to buy, sell, lease or exchange cemetery property or interment services. (c) Negotiates the purchase and sale, lease or exchange of cemetery property or interment services. (d) Negotiates the purchase or sale, lease or exchange, or lists or solicits, or negotiates a loan on or leasing of cemetery property or interment services. 14. "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. 15. "Commissioner" means the state real estate commissioner. 16. "Common promotional plan" means a plan, undertaken by a person or a group of persons acting in concert, to offer lots for sale or lease. If the land is offered for sale by a person or group of persons acting in concert, and the land is contiguous or is known, designated or advertised as a common unit or by a common name, the land is presumed, without regard to the number of lots covered by each individual offering, as being offered for sale or lease as part of a common promotional plan. Separate subdividers selling lots or parcels in separately platted subdivisions within a master planned community shall not be deemed to be offering their combined lots for sale or lease as part of a common promotional plan. 17. "Compensation" means any fee, commission, salary, monies or other valuable consideration for services rendered or to be rendered as well as the promise of consideration whether contingent or not. 18. "Contiguous": (a) Means lots, parcels or fractional interests that share a common boundary or point. (b) Does not include lots, parcels or fractional interests that are separated by either of the following: (i) A barrier. (ii) A road, street or highway that has been established by this state or by any agency or political subdivision of this state, that has been designated by the federal government as an interstate highway or that has been regularly maintained by this state or by any agency or political subdivision of this state and has been used continuously by the public for at least the last five years. 19. "Control" or "controlled" means a person who, through ownership, voting rights, power of attorney, proxy, management rights, operational rights or other rights, has the right to make decisions binding on an entity, whether a corporation, a partnership or any other entity. 20. "Corporation licensee" means a lawfully organized corporation that is registered with the corporation commission and that has an officer licensed as the designated broker pursuant to section 32-2125. 21. "Department" means the state real estate department. 22. "Designated broker" means a natural person who is licensed as a broker under this chapter and who is either: (a) Designated to act on behalf of an employing real estate, cemetery or membership camping entity. (b) Doing business as a sole proprietor. 23. "Developer": (a) Means a person who offers real property in a development for sale, lease or use, either immediately or in the future, on the person's own behalf or on behalf of another person, under this chapter. (b) Does not include a person whose involvement with a development is limited to listing property within the development for sale, lease or use. 24. "Development" means any division, proposed division or use of real property that the department has authority to regulate, including subdivided and unsubdivided lands, cemeteries, condominiums, timeshares, membership campgrounds and stock cooperatives. 25. "Distance learning" means continuing education or prelicensure education that is an online, planned learning experience with a geographic separation that may be synchronous or asynchronous, that does not require real-time interaction between a student and an instructor and that uses a platform with self-paced or prerecorded lessons and materials that a student can access via the internet to proceed at the student's own pace. 26. "Employing broker" means a person who is licensed or is required to be licensed as a: (a) Broker entity pursuant to section 32-2125, subsection A. (b) Sole proprietorship if the sole proprietor is a broker licensed pursuant to this chapter. 27. "Fractional interest" means an undivided interest in improved or unimproved land, lots or parcels of any size created for the purpose of sale or lease and evidenced by any receipt, certificate, deed or other document conveying the interest. Undivided interests in land, lots or parcels created in the names of a husband and wife as community property, joint tenants or tenants in common, or in the names of other persons who, acting together as part of a single transaction, acquire the interests without a purpose to divide the interests for present or future sale or lease shall be deemed to constitute only one fractional interest. 28. "Improved lot or parcel" means a lot or parcel of a subdivision on which there is a residential, commercial or industrial building or concerning which a contract has been entered into between a subdivider and a purchaser that obligates the subdivider directly, or indirectly through a building contractor, to completely construct a residential, commercial or industrial building on the lot or parcel within two years after the date on which the contract of sale for the lot is entered into, or for a condominium as defined in section 33-1202, within four years after the date on which the contract for sale is entered into. 29. "Inactive license" means a license that is issued pursuant to article 2 of this chapter to a licensee who is on inactive status during the current license period and who is not engaged by or on behalf of a broker. 30. "Lease" or "leasing" includes any lease, whether it is the sole, the principal or any incidental part of a transaction. 31. "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. 32. "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. 33. "License period" means the two-year period beginning with the date of original issue or renewal of a particular license and ending on the expiration date, if any. 34. "Limited liability company licensee" means a lawfully organized limited liability company that has a member or manager who is a natural person and who is licensed as the designated broker pursuant to section 32-2125. 35. "Live classroom course" means a course or instructional segment delivered in either an in-person classroom instructional format or a synchronous remote instructional format that allows students to observe and participate remotely in an instructional segment via livestreaming. 36. "Lot reservation" means an expression of interest by a prospective purchaser in buying at some time in the future a subdivided or unsubdivided lot, unit or parcel in this state. In all cases, a subsequent affirmative action by the prospective purchaser must be taken to create a contractual obligation to purchase. 37. "Master planned community" means a development that consists of two or more separately platted subdivisions and that is either subject to a master declaration of covenants, conditions or restrictions, is subject to restrictive covenants sufficiently uniform in character to clearly indicate a general scheme for improving or developing real property or is governed or administered by a master owner's association. 38. "Member" means a member of the real estate advisory board. 39. "Membership camping broker" means a person, other than a salesperson, who, for compensation: (a) Sells, purchases, lists, exchanges or leases membership camping contracts. (b) Offers to sell, purchase, exchange or lease membership camping contracts. (c) Negotiates or offers, attempts or agrees to negotiate the sale, purchase, exchange or lease of membership camping contracts. (d) Advertises or holds himself out as being engaged in the business of selling, buying, exchanging or leasing membership camping contracts or counseling or advising regarding membership camping contracts. (e) Assists or directs in procuring prospects calculated or intended to result in the sale, purchase, listing, exchange or lease of membership camping contracts. (f) Performs any of the foregoing acts as an employee or on behalf of a membership camping operator or membership contract owner. 40. "Membership camping contract" means an agreement that is offered or sold in this state evidencing a purchaser's right or license to use the camping or outdoor recreation facilities of a membership camping operator and includes a membership that provides for this use. 41. "Membership camping operator": (a) Means an enterprise, other than one that is tax exempt under section 501(c)(3) of the internal revenue code of 1986, as amended, that solicits membership paid for by a fee or periodic payments and has as one of its purposes camping or outdoor recreation, including the use of camping sites primarily by members. (b) Does not include camping or recreational trailer parks that are open to the general public and that contain camping sites rented for a per use fee or a mobile home park. 42. "Membership camping salesperson" means a natural perso [Text truncated for display. Full text available on LegiScan.]