Many issues which affect licensees and the transfer of real estate in Arizona are governed by the statutes contained in ARS (Arizona Revised Statutes). The Affidavit of Land Disclosure was created by an act of the Arizona Legislature and passed into law in 2002 as a result of several highly publicized cases of buyers who were surprised about the property they bought, long after close of escrow. While there are laws regarding subdivisions and the disclosures required (covered later in this course), unsubdivided properties did not have any disclosures required by statute. If the seller failed to provide a property Disclosure, which is not mandated by statute, the buyer in many cases received no formal disclosure from the seller in critical areas of information.
Under the statute, ARS 33-422, in certain circumstances the seller is required to provide a specific, mandated disclosure “…at least 7 days before the transfer of the property…” The specific form has questions covering some of the following areas;
- Legal and physical access
- Roads
- FEMA designations and floodplains
- Fissures and expansive soils
- Utilities on or near the property
- Wastewater treatment or proximity to a sewer line
- Percolation
- Zoning
- Proximity of military airports or high noise areas
The requirement for completion of the form is for properties that are not subdivided and that sit within an unincorporated area of the county. Thus, no specific disclosure is being done or has been done under the subdivision laws, and in most cases, services are not provided by an incorporated city. These properties fall within that limbo area and that is why the Affidavit of Disclosure is required.
The document must be in its proper form, in accordance with ARS 11-480, must be signed and notarized by the seller, provided to the buyer by statute 7 days before closing (a purchase contract might call for it sooner during the escrow process), and recorded at close of escrow.
There are some myths and realities about the Affidavit of Disclosure.
Myth: The Disclosure is only required on vacant land transactions.
Reality: False. Any property which meets the criteria of not subdivided and not within an incorporated city would require the Disclosure. There can be a house, barn, garage or anything built on the property.
Myth: The title company will inform us that it is required before closing.
Reality: False. It is up to the listing and/or seller agent to recognize the need, inform the clients and assure the completion.
Myth: The buyer and seller can waive the Disclosure.
Reality: False. Since it is a statute, the parties are obligated to the terms of a statute even if waived. So, if you propose or allow the clients to waive the Disclosure, that waiver is unenforceable, and it could fall back on you. | 
