When do I need a Public Report to sell lots or condominium units?

By law, A.R.S. 32-2101 (55), you are a “Subdivider” if you own or have owned 6 or more lots in a single platted subdivision and offer any number of them for sale, regardless if you are an individual or a “builder” entity. All Subdividers are required to obtain a Public Report(s) prior to offering lots for sale in accordance with A.R.S 32-2181 et seq. and Commissioner’s Rule R4-28-B1207 (This link opens the full document of the Arizona Administrative Code. Scroll to the reference). If you hold fee title or an equitable interest (e.g., “Option to Purchase”) in 6 or more lots at one time, or subdivide an unsubdivided parcel or lots within an existing subdivision into 6 or more new parcels, lots or condominium units, a Public Report is required prior to offering any of those new parcels, lots or units for sale. Regardless of the State requirements, you may still be required to follow the requirements for “minor land division” or lot-split ordinances of the city or county in which the property is located, even if splitting into 5 or fewer parcels or lots. It is the act of selling that requires a Public Report, not ownership. There is no time limit connected with this. It makes no difference when you acquired or sold a lot. Upon acquiring fee title or an equitable interest in the 6th lot within a single platted subdivision, a Public Report is required prior to its sale. You could purchase and sell 2 lots every five years and as soon as you acquire an interest in the 6th lot and offer the lot/lots for sale, you would be in violation if you did not obtain a Public Report. Exempt sales and leases A.R.S. 32-2181.02 provides that the sale or lease in bulk of six or more lots, parcels or fractional interests to one buyer in one transaction is exempt from the requirement to obtain a Public Report.

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