Monthly Archives: July 2016
20Jul
Mandatory Disclosures in Real Estate Transactions
Many are unaware, but individuals who are selling their real estate, sometimes even the seller’s real estate agent, have a duty to disclose certain information to the buyer, before completing the transaction. What exactly a seller must disclose is dependent on a number of factors. For instance, it depends on the location of the property, the statute that governs mandatory disclosures, and in some cases, who the buyer is.
In Arizona, every buyer is entitled to a document called the Seller Property Disclosure Property (“SPDS”) before purchasing real estate. The SPDS is a document that contains vital information provided about the property that the seller has knowledge about. In a series of sections, the SPDS asks the Seller to respond to questions relating to things from Electrical issues to termite infestation.
A big question regarding the SPDS is whether the buyer has to disclose something about the property that is not mentioned in the SPDS. The answer is, it depends. Although the buyer has a duty to inspect the property before closing, there are times when a seller must disclose something not mentioned in the SPDS. Where a seller of real property knows of facts materially affecting the value of the property not readily observable and not known to the buyer, the seller is under a duty to disclose those facts to the buyer. Hill v. Jones, 151 Ariz. 81, 725 P.2d 1115 (App. 1986). Another time a seller must disclose something not mentioned in the SPDS is when the buyer asks the seller about a particular non-SPDS issue, and the seller has knowledge about it. The Seller must refrain from providing misleading information the issue so the seller must disclose the information truthfully. Truthfully disclosing such information can prevent the seller from a future civil lawsuit.
The Seller Property Disclosure Statement is one of the most important documents transferred between the seller and the buyer during a real estate transaction. Not surprisingly, it is also a document that is at the center of lawsuits. If you considering it, or are in the process of a real estate transaction and need advice, do not hesitate to contact me at my office.
13Jul
Identity Theft Statutes in Arizona
During the late 1990’s and early 2000’s, Arizona experienced a high volume of identity theft reports. In response to the increase, Arizona legislatures passed two bills that prohibited identity theft. In 2007, the state legislatures passed the Legal Arizona Workers act and in 2008, enacted the Employment of Unauthorized Aliens Act. Shortly after the laws passed, law enforcement, including Sherrif Joe Arpaio and the Maricopa County Sherriff’s department stepped up enforcement when it came to identity theft crimes. This resulted in a large number of illegal immigrates being arrested. In 2014, an Arizona organization called Puente Arizona, brought suit against Sheriff Arpaio, alleging that both of the statutes are unconstitutional.
Puente brought suit in the Federal District Court of Arizona alleging that the two laws are unconstitutional on its face because they violate the Supremacy Clause of the United States Constitution. The Supremacy Clause gives priority to federal laws over state constitutions and laws. Puente argued that the two state laws are preempted on its face by the Immigration Reform and Control Act, a federal law (IRCA). IRCA is the federal statute that governs the enforcement of immigration. The district court found that Puente was likely to succeed on the merits of its claims and granted a preliminary injunction, preventing Arizona law enforcement from enforcing the two statutes. Arpaio appealed the decision to the 9th Circuit Court of Appeals.
A few months later, the 9th Circuit court reversed the district courts order, removing the injunction. The court disagreed with Puente in that the statutes were not enacted to give Arizona the ability to enforce immigration on Arizona’s terms, bypassing IRCA. The court held that despite the lawmaker’s intent, which is no secret when you consider the name of the latter act, “Employment of Unauthorized ALIENS Act”, the statutes do not violate the Supremacy Clause. The intent is clear but the language of the statute prohibits Identity theft for all people, not just illegal aliens. Susie, who is United States Citizen, can be prosecuted under the statute just like Mary, who happens to not be a citizen. The decision slammed the door on a facial constitutional challenge to the identity theft statutes but not so much for an “as-implied’ challenge. The 9th Circuit Court decided on the facial challenge and then remanded the case back down to the district court, where the district court will still decide on the as-implied challenge.
It will be interesting to see how the district court will rule on the “as-applied” challenge and if the non-prevailing party appeals to the 9th Circuit Court of Appeals Again. See case decision at: https://scholar.google.com/scholar_case?case=8369233543872561311&hl=en&as_sdt=6&as_vis=1&oi=scholarr