 |
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
wholesale real estate buyers; disclosure
Purpose
Establishes disclosure requirements for wholesale buyers and sellers of residential real property.
Background
Statute outlines trade and commerce practices in general and for particular industries and transactions, including practices that are deemed unlawful (A.R.S. Title 44).
Real estate wholesaling is a process through which an individual, the wholesaler, enters into a purchase contract with the seller of real property and assigns, for profit, that same contract to an end buyer (ADRE Bulletin 2021).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a wholesale buyer of residential real property to disclose in writing to the seller that the buyer is a wholesale buyer before the parties enter into a binding contract.
2. Allows a seller to cancel the contract for sale at any time prior to the close of escrow without penalty and retain any earnest money paid by the wholesale buyer if the wholesale buyer violates the disclosure requirement.
3. Requires a wholesale seller of residential property to disclose in writing to the buyer that the seller is a wholesale seller that:
a) holds equitable interest in the real property; and
b) may not be able to convey title to the property.
4. Allows the buyer to cancel the contract for sale at any time prior to the close of escrow without penalty if the wholesale seller violates the disclosure requirement.
5. Requires the buyer to be refunded all earnest money paid, if the buyer cancels the contract for the wholesale seller violating the disclosure requirement.
6. Defines residential real property, wholesale buyer and wholesale seller.
7. Becomes effective on the general effective date.
House Action
COM 2/15/22 DPA 10-0-0-0
3rd Read 2/24/22 59-0-1
Prepared by Senate Research
March 21, 2022
JT/sr