This bill is a result of an agreement between the Arizona Department of Real Estate and the Home Builders Association of Central Arizona.  The effective date of the bill is July 29, 2010.

Some of the minimum requirements to obtain a Public Report in this case are as follows:

• A map or survey of the entire “subdivision” with boundaries and identifying parcel numbers of the individual parcels.
• Disclosure of utilities location (distance from the furthest lot in the subdivision) and an estimate of how much it would cost a buyer to bring the utilities to the foundation of a residence to be constructed on a parcel.
• A letter from a civil engineer stating the flood potential of the parcels and the designation given the area or subdivision by FEMA on the Flood Insurance Rate Maps.
• A statement by the Subdivider (within the Public Report itself, but based on expert knowledge… a soils engineer’s report) whether the soils of the parcels are subject to subsidence or expansion, and if there are any ground fissures in or near the subdivision.
• Health Certificate, or “Approval of Sanitary Facilities for Subdivision” from Maricopa County Environmental Services Department (only if in Maricopa County), otherwise from the Arizona Dept of Environmental Quality.
• A letter from a title company or engineer identifying the means of legal access to the individual parcels from a known public right of way by conventional motor vehicle.
• Certificate of Assured Water Supply (“CAWS”) for the subdivision from Arizona Dept of Water Resources, unless the property is in the service area of a water company or municipality determined to have an adequate water supply. Further, if that company or municipality, or this “subdivision”, is a member of the Central Arizona Groundwater Replenishment District, a Notice of Payment of any fees associated with the membership.

There will be more requirements. But, this gives an idea of the curves you’ll need to negotiate on your path to selling unsubdivided land while complying with the laws and rules of the State of Arizona and the Commissioner of Real Estate.

In addition to the requirement of providing a valid Subdivision Disclosure Report (Public Report) to a purchaser when selling 6 or more lots to individual purchasers, and in all cases where selling vacant real estate, purchasers enjoy certain rights of rescission. From the body of the Public Report:

ARIZONA LAW STATES:

1. THE SALE OR LEASE OF SUBDIVIDED LANDS PRIOR TO ISSUANCE OF THIS REPORT OR FAILURE TO DELIVER THIS REPORT TO YOU SHALL RENDER THE SALE OR LEASE RESCINDABLE BY YOU. ACTION TO RESCIND MUST BE BROUGHT WITHIN 3 YEARS FROM DATE OF EXECUTION OF PURCHASE AGREEMENT.

2. CONTRACTS OR AGREEMENTS FOR THE PURCHASE OF AN UNIMPROVED LOT (WITHOUT A BUILDING)* MAY BE RESCINDED BY YOU WITHOUT CAUSE BY SENDING OR DELIVERING WRITTEN NOTICE OF RESCISSION BY MIDNIGHT OF THE SEVENTH CALENDAR DAY FOLLOWING THE SIGNING.

3. IF YOU HAVE SIGNED A PURCHASE AGREEMENT FOR THE PURCHASE OF AN UNIMPROVED LOT (WITHOUT A BUILDING)* PRIOR TO INSPECTING THE LOT, YOU HAVE SIX MONTHS TO INSPECT AND UPON INSPECTION MAY RESCIND THE PURCHASE AGREEMENT.

* A contract or agreement for purchase of a lot which includes a building or obligates the seller to complete construction of a building within two years from the contract date does not constitute the purchase of an unimproved lot. Therefore, if your purchase includes a lot and a building or a building to be built, you are not entitled to the rescission rights described in paragraphs 2 and 3.

I’ve just added another link:  a checklist of all steps and documents required for the Arizona Dept of Real Estate “Subdivision Disclosure Report (Public Report)” or the initial Exemption allowing “conditional” or non-binding and fully-terminable purchase contracts for lot sales conditioned upon the eventual issuance and approval of the DRE Public Report. Please click this link to download the PDF file.

I hope you might find this useful. Write back in the comment section or give me a call if you have any questions about the process.

Rather than the outdated MS Word-formatted questionnaire of some 30 pages or more seeking answers for individual data-points required in the statutes, the new questionnaire is limited to just the signed affidavit portion where the Subdivider provides answers to questions such as “Have you ever been convicted of a felony?”, and other details regarding the subdividing entity. This results in an application form of just about 5 pages, in addition to the Subdividers draft form of Public Report.

The DRE began requiring, some time ago, that Subdividers prepare a draft form of the Public Report to be approved by the Department, saving DRE personnel the typing of the report itself. All required data-points are provided in that proposed document, making the full questionnaire superfluous.

The required form of draft report has also been revised to include an index or table of contents, among other cosmetic changes.

These are welcome changes and fit Commissioner Sam Wercinski’s philosophy of simplifying the approval process for good practitioners while more actively enforcing the requirements of the Arizona statutes by pursuing and correcting the practices of “wildcat” subdividers and other bad practitioners.

Application Form

Subdivision Disclosure Report (Public Report) Template

1. “Permanent access from the above referenced subdivision to (Name of Federal , State, County or City maintained street or highway) is provided by the following recorded documents:…”

2. “Permanent access within the subdivision to all lots, units or parcels is provided by the following documents:…”

3. “Permanent access to and within the development is via …………………………………………..”

Permanent Access constitutes both legal and physical access.

Note that, generally, the DRE is interested in the access physically existing to and within the property, as well as citing specifically what documents of record establish legal access from the property to an open and established public roadway, regardless of how distant that public roadway may be.

When seeking a final Subdivision Public Report, if the land is located within an Active Management Area (AMA), a copy of the Certificate of Assured Water Supply from the Arizona Department of Water Resources (ADWR) must be furnished, or written commitment of water service from the city, town or private water company which has been designated by ADWR as having an assured water supply. The ADWR maintains a public list of those municipalities and water companies, also available by contacting DISC.

If the land is located outside an AMA, a Water Report from ADWR will be required.

Assisting in the attempts to meet these assurances is the Central Arizona Groundwater Replenishment District (”CAGRD”, known as “kay-gard“), which is part of the Central Arizona Project. CAGRD works to re-charge Arizona groundwaters, and helps to finance those efforts with non-mandatory, paid memberships of landowners, municipalities and water companies providing service to lands in their service areas. In addition to initial membership fees, the annual property taxes may include fees assessed for enrollment in CAGRD.

If the land has enrolled as Member Land of CAGRD pursuant to A.R.S. §48-3774, or if the land will be served by a municipal water provider whose service area is currently enrolled as a Member Service Area of CAGRD pursuant to A.R.S. §48-3780, DRE requires a copy of the notice executed on behalf of CAGRD confirming that all necessary fees relating to that enrollment have been paid. CAGRD has a notice form that will be used to satisfy this requirement upon application and supporting documentation.

DISC can assist you with regard to all these matters.