July 2025

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

Whether you’re dealing with a traditional home sale, vacant land, or a wholesale flip, real estate deals in Arizona can unravel fast if the right disclosures aren’t made up front.  What seems like a straightforward sale can quickly turn into a legal mess without the right protections in place. One overlooked disclosure or a missing form can derail a deal or trigger legal headaches long after closing. In 2025, it’s more important than ever to understand both the disclosure rules that govern real estate transactions and the duties placed on agents. Whether you’re selling your first home, managing multiple investment properties, or guiding clients through a deal, Arizona’s changing disclosure laws affect every step. Staying informed is the best way to avoid delays, disputes, and legal risks.

This updated guide breaks down exactly what Arizona law requires in plain, practical terms. You’ll learn what the Affidavit of Disclosure under A.R.S. § 33-422 still demands in certain unincorporated or vacant land transactions and how HB 2747 reshaped wholesaling practices. It also covers the duty placed on real estate licensees under ADRE Rule R4-28-1101, with real-world examples, practical tips to avoid common missteps, and insight into how courts are applying these rules today.

If you read our original article Understanding Real Estate Disclosure Laws in Arizona When Selling a Home (from December 2022), you’ll recognize the key concepts. This is an up-to-date guide that provides a refresher on long-standing disclosure rules, introduces newer laws, and highlights the most common pitfalls catching Arizona property sellers and buyers off guard in 2025.

Understanding A.R.S. § 33-422: Key Disclosures for Rural Land Sales

While most traditional home sales in Arizona rely on the SPDS (Seller’s Property Disclosure Statement), a different set of disclosure obligations applies when selling land in unincorporated county areas outside of subdivisions. A.R.S. § 33-422 governs these types of transactions—typically raw or lightly improved land—and requires sellers to furnish an Affidavit of Disclosure when offering five or fewer parcels that are not part of a recorded subdivision plat.

Even though this statute doesn’t apply to most urban or suburban residential sales, it’s a critical compliance step in rural land deals—and one that’s often overlooked.

The Affidavit of Disclosure carries real weight in applicable real estate transactions. It forces the seller to address a detailed list of property-specific conditions that could materially affect the buyer’s decision. These include whether the property has legal and physical access via public or private roads, whether it lies within a designated floodplain or flood hazard zone, and what systems are in place for sewage disposal and water access. Sellers must also disclose if there are any current violations of county or municipal zoning codes, unresolved code enforcement actions, or safety issues tied to the parcel. This ensures that buyers are not left guessing about land usability, environmental risks, or regulatory entanglements that could delay development or financing.

Just as important as what’s disclosed is what cannot be avoided. Arizona law makes clear that any effort to waive or contract around the disclosure requirement is void and unenforceable. Even if the buyer signs a contract with “as-is” language or broad indemnity clauses, the seller is still liable if they knowingly omit material facts or include misleading information. Under subsection D, buyers may sue for actual damages, rescind the transaction, and potentially recover attorney fees and court costs if a dispute arises. In short, failing to provide an accurate and timely affidavit doesn’t just risk losing the sale — it can open the door to serious financial consequences and court-ordered remedies.

What to Know in 2025

Wholesale Buyer and Seller Disclosures (A.R.S. § 44-5101)

In 2022, Arizona adopted A.R.S. § 44-5101 (originally introduced as House Bill 2747) to regulate wholesale real estate transactions. These involve buyers contracting to purchase residential property and then assigning the contract to a third party—usually for profit—without closing on the deal themselves.

Under the statute:

• A wholesale buyer must disclose in writing to the seller that they are a wholesale buyer before entering into any binding agreement.

• A wholesale seller (i.e., someone assigning a contract without holding legal title) must disclose in writing to the buyer that:
  • They are acting as a wholesale seller,

  • They hold only an equitable interest in the property, and

  • They may not be able to convey title.

Failure to comply gives the other party a powerful remedy:

• A seller may cancel the contract and keep earnest money if the wholesale buyer fails to disclose.

• A buyer may cancel and recover their earnest money if the wholesale seller fails to disclose.

These disclosures are now a regular part of compliance reviews and transaction audits. In 2024, courts upheld rescission rights in multiple cases involving wholesale deals that lacked proper notice—even when the end buyer was satisfied with the property.

The Role of Agents and Brokers: AAC Rule R4-28-1101

While sellers have a clear legal duty to disclose known material facts about a property, Arizona real estate licensees—including agents and brokers—are held to an independent and enforceable standard of conduct under Arizona Administrative Code Rule R4-28-1101. This rule outlines the professional disclosure duties that apply to licensees in all transactions, regardless of what the seller discloses or what’s stated in the SPDS.

Material Fact Disclosure – Rule R4-28-1101(B)

Under Subsection B, a licensee must disclose in writing any information they possess that materially or adversely affects the consideration to be paid by any party to the transaction. This includes:

• Information that the seller or lessor is or may be unable to perform;

• Information that the buyer or lessee is or may be unable to perform;

• Any material defect existing in the property being transferred;

• The existence of any lien or encumbrance on the property.

This duty is triggered by the licensee’s own knowledge, whether obtained through observation, past experience, conversations with clients or third parties, or any other means. The disclosure must be made in writing, even if the seller fails to include the issue in the SPDS or if the sale is labeled “as-is.”

Conflict of Interest Disclosure – Rule R4-28-1101(E)

Under Subsection E, a licensee must also disclose in writing and before any binding agreement is signed if:

• They are a licensed agent acting as a principal in the transaction;

• A party to the transaction is a family member;

• The licensee or their family member has a financial interest in the transaction other than the agent’s compensation;

• The buyer or seller is the licensee’s employing broker or works for them.

These disclosures ensure transparency and help prevent future legal disputes over hidden relationships or dual roles.

Dual Representation – Rule R4-28-1101(F)

Under Subsection F, a licensee may not accept compensation from, or represent, more than one party in a transaction without prior written consent from all parties. This provision directly impacts dual agency situations and must be carefully documented.

ADRE Enforcement Trends

In recent years, ADRE has taken a more proactive approach in enforcing these rules. Complaints for nondisclosure, conflict of interest, and dual agency violations are among the most common reasons agents face investigations. Sanctions have included fines, license suspensions, public discipline, and—in serious cases—revocation.

Agents and brokers must understand that these duties exist independently of the seller’s obligations. An agent can face disciplinary action even if the client was the one who withheld the information.

Practical Takeaway

Given the stakes, licensees are strongly encouraged to:

• Make all material disclosures in writing;

• Document communications and potential red flags during the transaction;

• Avoid assuming that the SPDS or “as-is” language protects them; and

• Consult a qualified real estate attorney to clarify gray areas or update internal disclosure procedures.

Because every transaction is fact-specific, any questions about disclosure duties should be addressed with experienced legal counsel familiar with Arizona real estate law and ADRE rules.

Common Disclosure Missteps and Legal Outcomes

As Arizona’s disclosure laws have expanded, so has the volume of litigation tied to real estate transactions. Buyers, sellers, agents, and wholesalers are increasingly at the center of lawsuits where a missing or poorly handled disclosure becomes the central issue in litigation. Simply completing standard forms or relying on boilerplate contract language is not enough to avoid liability. Below are some of the most common disclosure mistakes—and what recent outcomes reveal about how the law is being enforced.

Misunderstanding the Meaning of “As-Is”

Many sellers believe that selling a property “as-is” eliminates the need to disclose known defects. That assumption is incorrect. An “as-is” clause may limit a buyer’s post-inspection remedies, but it does not excuse the seller from disclosing known material facts. This is especially critical when the seller is aware of major issues such as foundation cracks, prior water damage, or unpermitted additions. Sellers who treat an “as-is” label as a shield from their disclosure obligations often find themselves defending lawsuits for fraud, negligent misrepresentation, or breach of statutory disclosure duties.

Overlooking Procedural Requirements in Wholesale Deals

The wholesale disclosure rule under A.R.S. § 44-5101 (formerly HB 2747) is not flexible. The required notice must be provided in writing and before any binding contract is signed. Investors who assume they can disclose later—or skip the step entirely if the transaction closes smoothly—are missing the point of the law. Arizona treats this requirement as a mandatory procedural safeguard, not a mere formality. Failing to comply can result in rescission rights, loss of earnest money, or administrative discipline, even if no property defects arise.

Consult a Real Estate Attorney Early

These examples highlight emerging patterns in Arizona real estate litigation—but every case turns on its specific facts. Even a small oversight can evolve into a major liability depending on how disclosures were handled and what the parties knew—or should have known—at the time. When there’s any uncertainty about what must be disclosed, or how and when to disclose it, the safest approach is to consult an experienced real estate attorney before the problem arises. Agents and brokerages should also conduct periodic compliance reviews with counsel to stay current with disclosure rules and prevent costly missteps.

Best Practices for Buyers, Sellers, and Real Estate Professionals

Navigating Arizona’s real estate disclosure laws in 2025 requires more than filling out a few standard forms. With increasing scrutiny from regulators and growing legal risks tied to incomplete or unclear disclosures, buyers, sellers, and real estate professionals benefit from adopting best practices that prioritize transparency and legal compliance. The following steps can help reduce confusion, prevent disputes, and keep transactions on track.

1. Understand and Use the SPDS Form—If Applicable

The Seller’s Property Disclosure Statement (SPDS) is a widely used form developed by Arizona REALTORS® to help sellers disclose known material facts about a property. It is the default disclosure tool in most residential transactions involving REALTOR® members. The updated version includes updated questions addressing topics such as investor involvement, zoning, and environmental history that were not as clearly addressed in prior versions.

Sellers working with REALTOR® professionals should ensure they are using the most current SPDS version and review it line by line for accuracy. While the SPDS form itself is not required by law and may not be appropriate for transactions involving non-REALTOR® parties, the core obligation to disclose known material facts applies regardless of the form used.  Thus, even if a seller does not use the SPDS form–or uses a different format entirely–the legal duty to disclose known material facts still applies.  Arizona law requires transparency, no matter what paperwork is used.  Note: Some categories of information are not legally required to be disclosed under Arizona law.  When in doubt, consult legal counsel.  Non-members should consult a qualified real estate attorney or licensed professional to determine the appropriate format for meeting their disclosure obligations.

2. Disclose Wholesale Involvement Early and Clearly

If a buyer or seller is participating in a wholesale transaction—where the buyer intends to assign the contract to another party—state law requires that status to be disclosed in writing before any binding agreement is signed. Under A.R.S. § 44-5101, failure to provide timely wholesale disclosure can result in the right to cancel the contract and other legal consequences.

Sellers should confirm whether the buyer intends to complete the transaction or assign it. Wholesalers should proactively provide the required disclosures upfront—even if they believe the other party is already aware of their role. Addressing wholesale involvement clearly helps avoid disputes and ensures that all parties are operating with informed consent.

3. Provide Regular Training and Legal Review for Real Estate Professionals

Brokerages and team leaders should provide ongoing training to ensure agents understand the full scope of their disclosure obligations—especially those set out in A.A.C. R4-28-1101. This Arizona Administrative Code rule requires agents to disclose in writing any information they possess that may materially or adversely affect a party’s decision in a transaction, regardless of whether the seller chooses to disclose it.

Because this duty depends on the agent’s actual knowledge and professional judgment, compliance requires more than just initial licensing education. Brokerages should hold periodic legal checkups with real estate attorneys to review practices, update risk management protocols, and clarify grey areas. Proactive training and review can significantly reduce the risk of consumer complaints, regulatory actions, or lawsuits.

How Gottlieb Law Helps You Stay Protected

At Gottlieb Law, we represent both buyers and sellers in a wide range of Arizona real estate transactions. Our experienced team offers strategic guidance and risk prevention tools at every stage of the transaction.

Here’s how we help:

• Document and Disclosure Review
  We review real estate transaction documents to ensure compliance and accuracy.

• Rescission and Litigation Support
  We represent parties in disputes involving nondisclosure, fraud, or contract rescission—whether pre-litigation or in court.

• Regulatory Guidance for Licensees
  We advise brokers and agents on ADRE Rule R4-28-1101 compliance and help resolve disciplinary or complaint matters.

• Custom Contracts and Clauses
  We draft and revise custom contract language to mitigate disclosure risks in unique or high-stakes situations.

Whether you’re preparing to list a property, purchasing your next home, or dealing with a disclosure-related dispute, Gottlieb Law brings clarity, protection, and strategic foresight to every step of the process.

Final Takeaway on Arizona Real Estate Disclosure Laws

Arizona real estate transactions aren’t casual handshake deals.  If you’re unsure whether your current disclosures meet Arizona’s legal standards, don’t wait for a lawsuit to find out. Let Gottlieb Law review your paperwork, identify risks, and provide the confidence you need to move forward securely.

Call Gottlieb Law today at 602-899-8188 or use our Contact Us page here to schedule your initial consultation.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.