Arizona Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Good Funds Requirements
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.
Arizona state law does not require attorney or abstractor involvement; however policies must be issued by a licensed issuing agent with Dept. of Insurance with an Arizona licensed title insurer. Arizona Revised Statutes requires, among other things, that you must maintain a title insurance plant for any county (that you issue a title insurance policy) that has over 100,000 people based upon that last decennial census. The link for Arizona Department of insurance is: http://www.id.state.az.us/index.html. Title plant maintenance includes being a lessee or joint owner of a title plant. Alternatively, you may base your title policy on a title policy issued to you from a title insurer who does maintain such a title plant in the respective county or counties.
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
Arizona permits, but does not require, a cancellation/commitment fee.
Certificate of Release (of Mortgage)
If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.
Title insurer has statutory authority to release subject to the requirements in A.R.S. 33-707.
Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.
Warranty Deeds and Special Warranty Deeds are generally used. Quit Claims are generally not used in sale transactions and are generally not insurable, but would be reviewed on a case-by-case basis.
Good Funds Requirements
Joinder of Spouses
If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.
A non-title holding spouse is required to join in the execution of a deed or deed of trust unless the property is held by the vested spouse as his or her sole and separate property and a properly executed disclaimer deed from the non-title holding spouse has been recorded, and there have been no intervening transactions. A.R.S. 25-211 (Community Property) and A.R.S. 25-214 (Management and Control of Community Property)
Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?
(a) Owner’s policy: typically, seller
(b) Transfer tax and recording fee: usually split depending on agreement
(c) Survey charges: usually split depending on agreement
(d) Closing/settlement charges: usually split depending on agreement
Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).
Countersigned by the issuing agent.
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
Real estate taxes are paid in two installments. The first installment of one-half taxes is due Oct. 1 (delinquent after Nov. 1) and the second installment of the remaining one-half is due the following March 1 (delinquent after May 1). Thereafter, subject to sale the following year. By state law interest is assessed at 16% per annum prorated monthly. If the taxes, penalties and interest are not paid in full within 13 months, an advertising fee of 5% or $5.00, whichever is greater, is assessed and during the sixteenth month the Treasurer's Office offers a tax lien on the property for sale. If the tax lien is not redeemed within three years from the date of sale, the purchaser may initiate foreclosure proceedings. See: http://treasurer.maricopa.gov/
Please consult with a local underwriter for additional information relating to real estate taxes on the subject property.
Search and Examination Fees
Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.
While not typically charged, they are charged on occasion if special searches are done.
Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.
(A) There is no state law requiring a minimum period of time for a title search but a title plant must typically have a minimum 40 year chain;
(B) There is not a marketable record title act;
(C) No other applicable state requirements.
Security Instruments (Deed of Trust vs. Mortgage)
Please describe the customary and permissible form(s) of security instruments used in your state.
Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?
Deeds of trusts are used typically. Mortgages are rarely used, but can be used.
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
AZ utilizes the Stewart standard exceptions:
Rights or claims of parties in possession not recorded in the Public Records.
Easements or claims of easements not recorded in the Public Records.
Any discrepancies, conflicts or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of the improvements.
Any lien, or right to a lien, for services, labor, material or equipment, heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.
Taxes or assessments which are not recorded as existing liens in the Public Records.
State-specific Policy Variations
If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.
The policies are the same. Please consult a local underwriter for information relating to any special endorsements that may be offered in the state.
Title Insurance Form and Filing Regulations
Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau.
Arizona Department of insurance is the governing body where both rates and forms are filed. See their website for requirements http://www.id.state.az.us/index.html.title.
Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Is usury coverage available?
Yes, a usury endorsement is available. The statutory maximum rate of interest is 10% per annum, unless a different rate is contracted for in writing, in which case any rate of interest may be agreed upon. ARS 44-1201.
Usury also constitutes a misdemeanor crime. ARS 13-2208.
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
Arizona has no state withholding requirements in addition to FIRPTA.
Are witnesses required on a deed or security instrument? If so, please describe.
Notarized only; no witnesses are typically required unless the notarization requires it, such as person executing is blind, marks with an X.