In a simple answer, MAYBE…

First, let’s look at how and why AAR generates a new form, or revises a current form. In many cases, a new or revised form is proposed by a Realtor member somewhere in the state. That request/proposal goes to the AAR Risk Management Committee (RMC), that reviews the request based on need, applicability, and function.

Meaning, will the new form fix a problem or address a new issue? If the form request will deal with a very small segment of the Realtor membership, then the odds are it will not be created. The goal of the Risk Management Committee is to reduce the risk for the bulk of the industry in Arizona.

If the RMC agrees that the proposal is valid and would benefit the membership as a whole, RMC will typically create a task force to consider the request and create the language for such a form. Once that task force has completed the work, it is sent back to RMC for approval. If RMC approves the new form or the changes to an existing form, the process begins for final approval and distribution through Transaction Desk.

During the process of approval, AAR sends most new or revised forms out the “Review Loop”. This is a group of Realtor members that have volunteered to review new and revised forms and provide input back to AAR. Currently AAR has about 4000 members in the loop, and typically AAR receives good input from the loop members. Every comment in the loop will be reviewed by RMC to propose changes to what appears in a draft. This allows the Realtor community state-wide to have input on state-wide forms.

The author of this blog has served on Risk Management for almost 3, 4-year terms. And the author has chaired or participated in form request or review task forces, including The HOA Addendum, Wire Fraud Advisory, Residential Purchase Contract, Fair Housing Advisory and Solar Addendum (Chair).

Sometimes, AAR reaches out to the membership asking if a brokerage or a region has already created a form, that while being local and not state-wide, can be a good guidance for a task force to create a new form. In other words, why re-invent the wheel?

To the question of this blog... NO, in most cases you are not required to use AAR forms. AAR provides them to the membership and the brokers so that the members  do not need to re-invent the wheel.

Yet, consider this, your broker has every right to obligate you to use most or all the AAR forms. Why? First, while the broker knows and understands the language of the AAR forms, they might not be familiar with language on a replacement form, or language drafted by one of the agents.

And your broker probably has E&O Insurance (Errors & Omissions) and most companies that offer that coverage REQUIRE for a transaction to be insured, that the transaction must include any industry-wide forms, and not forms provided by another broker, or language inserted that would have been covered on an AAR form.

Bottom line: your broker dictates what forms to use, what language to include and what you should be doing when you are working a deal. So, if not sure, check your brokerage Policy & Procedure manual

Lastly, AAR releases new forms on a set schedule, unless the new or changed form is extremely timely dealing with a rule or statute change, or a change that has significant impact. AAR releases new forms on or about February 1, July 1, and November 1 every year.