Non-Disclosed Home Defects

Arizona real estate agents are required to “disclose in writing to all other parties any information the licensee possesses that materially or adversely affects the consideration to be paid by any party to the transaction”. A real estate agents failure to disclose a known defect about the property could put their license in jeopardy and expose themselves to financial sanctions!

R4-28-1101 of the Arizona Administrative Code of Professional Conduct: states that real estate agents owe a fiduciary duty to the client and shall protect and promote the client’s interest. However, it also states that they are to deal fairly with all parties to the transaction–even the buyer.

Don’t hide your eyes from defects that should be disclosed to potential home buyers.

What if a Complaint is made to the AZDRE?

If a complaint is made by a party to a real estate purchase that an Arizona real estate agent hid material information from the buyer than a notice will be sent to that real estate agent. The Arizona Department of Real Estate (AZDRE) will begin a thorough review of the complaint to make a finding of their own. As part of this review process it is highly likely that the AZDRE will ask the real estate agent for all documents pertinent to this situation. For instance, they may ask for all emails, text messages, contracts, addenda to the contract, etc.  

Do Not Simply Ignore the Department’s Requests

If you are a real estate agent who has received a request from the AZDRE for documentation do not ignore it! Ignoring the problem will not make it go away. Don’t think that by sticking your head in the sand the AZDRE will forget about the alleged violation. In fact, simply ignoring the Department’s request for documents can cause you to lose your real estate license AND prevent your from renewing or reapplying for a license!

A.R.S. 32-2153(B)(11): States that “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 failure “to respond in the course of an investigation or audit by providing documents or written statements.”

Don’t be this type of Arizona real estate agent! If you are the victim of a dishonest real estate agent or if you are a real estate agent who needs to correct her wrongs then contact the Dunaway Law Group at 480-389-6529 or at HERE.

* The information provided is informational only, does not constitute legal advice, and does not create an attorney-client or attorney-prospective client relationship. Additionally, the Dunaway Law Group, PLC limits its practice to the State of Arizona.

Builders Risk Insurance

What is Builder’s Risk Insurance?

Builder’s risk insurance is a type of insurance policy which covers residential and commercial structures while they are under construction or being remodeled, or renovated. Builder’s risk insurance is “coverage that protects a person’s or organization’s insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from a covered cause.”

Builder’s risk policies are typically available for three types of construction; ground-up new construction, remodeling and renovation.

What is Covered?

Builder’s risk is intended to protect construction sites from loss due to certain types of damage. The exact coverage and limitations varies between providers and policies but generally builder’s insurance will cover against loss from:

  • theft, 
  • vandalism, 
  • fire,
  • damage to equipment,

Additional coverage can be purchased to include protection from loss due to:

  • flood, 
  • windstorm, 
  • earthquake,
  • mudslides,
  • construction materials,
  • temporary structures, 
  • fencing,
  • scaffolding and landscaping.  

What is NOT Covered by Builder’s Risk Coverage?

  • terrorism, 
  • acts of war,
  • government seizure, 
  • nuclear hazards,
  • injuries or accidents on the job site,
  • damage to materials while they are in transit to the property.

If you are thinking about building a custom home in Arizona and have questions about builder’s risk insurance then call the Dunaway Law Group at 480-389-6529 or send us a message HERE.

What is a Deed of Trust

Arizona Deeds of Trust

To fully understand the meaning of the deed of trust, you must first understand promissory notes. Arizona home buyers often think of the deed of trust is the contract they are signing with the lender to borrow money to purchase their home. However, that’s actually not the case. It’s the promissory note that contains the promise to repay the amount borrowed.

While he promissory note is basically an IOU that contains the promise to repay the loan, the deed of trust is the document that pledges the property as security for the loan. It is the deed of trust that permits a bank to foreclose if you fail to make the monthly payments or breach the loan agreement in some other way.

Deeds of Trust

A deed of trust, pledges real property to secure a loan. In Arizona deeds of trust are used instead of a mortgage. A deed of trust involves three parties:

  • the trustor, aka, the borrower;
  • the lender, often referred to as the beneficiary in legal documents;
  • and the trustee. The trustee is an independent third-party that holds their poor legal title to the property. The main function of the trustee is to sell the property at public auction if the trustor defaults on payments. Quite often, an Arizona, a real estate lawyer asked as trustee.

Deed of Trust Foreclosure

The judicial foreclosure is the process used with deeds of trust. In a nonjudicial foreclosure, the bank can’t foreclose without going to court so long as the deed of trust contains a power of sale clause.

If you need help from an Arizona real estate attorney then contact the Dunaway Law Group at [email protected] or 480-389-6529