‘Raising of the bar’ for the Arizona real estate industry
By Phil Riske, Managing Editor, Rose Law Group Reporter
The Arizona Department of Real Estate regulates real estate, cemetery and membership camping brokers and salespersons. It approves and monitors pre-licensing instruction and testing and continuing education courses. It maintains oversight of approved schools to ensure the quality content of their courses, the competence of their instructors, and the quality and timeliness of the materials being taught.
The department oversees the activities of licensees, investigates complaints against licensees and land developers, and participates in administrative hearings pertaining to their conduct.
The department also regulates the sale of subdivisions, unsubdivided lands, timeshares, condominiums, membership campgrounds and cemeteries.
Department Commissioner Judy Lowe came to the capitol from the real estate industry. Click here for her resume:
Lowe recently answered some questions from Rose Law Group Reporter
Why is the Department of Real Estate a Cabinet-level agency?
The Governor of the State of Arizona has the authority to appoint members to the Governor’s cabinet. Some agency heads appointed by the Governor are members of the Governor’s cabinet, including the Commissioner of the ADRE. ARS 32-2106 (A) provides that the Commissioner of the Arizona Department of Real Estate (ADRE) is appointed by the Governor, pursuant to ARS 38-211.
What role has or can the agency play in housing market recovery?
The agency’s mission is to “protect the public interest through Licensure and Regulation”. Through partnering with the industry, as well as consumer groups, the agency can aid in the real estate market recovery through ensuring that all licensees are receiving up to date and quality education regarding current issues surrounding the housing market recovery. This education should increase the protection of the public through the enhanced knowledge of the licensee, as well as the public, and facilitate the “raising of the bar” for the Arizona real estate industry.
What kind of volume change did you see from the peak of the market to the recession?
Regarding the change in the volume of service requests/ workload at ADRE, there have been few changes in volume. Currently, as compared to the peak of the market; in licensing, the total number of Arizona Real Estate licensees actually increased during much of the recession years, however, the “active” license count declined. Also, ADRE received a much larger number of complaints in the years of the peak market. The ADRE staffing has decreased dramatically in the past few years, from 72 positions to a current 32 positions, while the excellent service to the industry and protection of the public continues.
As the housing market seems to be upturning, what do you foresee as the major issues for the department?
The Department currently is addressing the following as major issues:
· Real estate activity by unlicensed individuals (unlicensed activity), especially in the area of Property Management, short sale negotiators, unlicensed entities/individuals representing buyers, sellers, renters and investor/owners, as well as bidders representing buyers at foreclosure auctions, including the steps of the court house.
· Oversight of broker trust accounts, primarily in Property Management
· Short sale and foreclosure transactions involving fraudulent activity.
It seems there are conflicting stories daily about the status of the housing market in Arizona/Phoenix. Where can the most reliable information be found?
The Cromford Report; the real estate licensee using the MLS data.
What kind of activity are you seeing in your subdivision permitting department?
*The Department has seen a slight increase in the total of Public Report applications, as well as Public Reports issued, from fiscal years 2011 through 2012.
– for Fiscal Year 2012, 408 public reports issued
– to date for Fiscal Year 2013, which began on July 1, 2012, ADRE issued 71 public reports
What was it like in that area of the department over the past 5 years or so?
In FY2007, there were 1,812 Public Reports issued by the Department. From that point there was a steady decline in the number of Public Reports issued, with a low point in FY2010 of 372 Public Reports issued, and as mentioned the Public Report applications are dramatically increasing.
We have a lot of real estate business readers, so what can the industry do to help your agency with processing times and getting permits out to builders?
ADRE has a very short turn around processing time. The most important issue here is ensuring that all information required for the Public Report is provided to the Development Services Division at the time of application. Incomplete applications can significantly increase the processing time for the Public Report.
Has real estate/mortgage fraud or scams increased or decreased over the past 5 years, and what regulatory authority does the agency have?
There has been a substantial increase in the number of mortgage fraud cases being brought to the Department’s attention. The Department’s regulatory authority extends only to real estate licensees and their involvement in these types of cases. The Department is actively involved with various governmental agencies in investigating and sharing data/information on suspected violators.
Does the agency have a legislative wish list for the upcoming session?
The Department is looking at various issues for the upcoming legislative session, with emphasis on unlicensed real estate activity, property management activities and licensing issues.
How did you fare in the past session?
Legislation passed during the last legislative session that impacted the Department includes:
· The Legislature continued the ADRE for the next 10 years.
· Increased continuing education (CE) requirements for Designated, self-employed Brokers and Brokers delegated authority by a Designated Broker (DB), including increasing the number of hours for the Broker Management Clinic from 3 hours to 9 hours, making a total of 30 CE hours required of these licensees every 2 years for license renewal.
· Repeal of the Condominium Recovery Fund.
· Modification of public report requirements with regards to disclosure of items in a public report, from a 5 mile radius to a 1 mile radius
· Ability of developers to outsource and pay for physical inspections of developments, with approval of the Department.
ASU real estate program offers degree to help agents grow despite industry shifts/East Valley Tribune