Chapter 3
Other Home Builder Disclosures

Learning Objectives: What other disclosures are necessary?
What type of forms are used?


The Arizona Disclosure Report is the most important form of disclosure used in new home sales, but other forms may be necessary and are commonly used.  Home builders typically do not use a standard AAR contract as they do in resale, but rather develop their own contracts, forms, and addendums. They commonly add, change, or update their forms to keep current with industry changes. The wording may vary from builder to builder. Disclosures may be included as part of the purchase contract, may be spelled out on separate addendums to the contract, or the home builder may feel that the information is adequately covered in the Disclosure Report issued by the Arizona Department of Real Estate.  Home builders will use their in-house attorney or outside counsel to develop these disclosures to make sure that they comply with the ADRE Laws, especially where they relate to waiving or disclaiming liability for prior material representations concerning the lot or subdivision.  This type of provision may be void - see Statute 32-2185.06.

Below are examples of typical disclosures used in new home sales:


DECLARATION AND HOMEOWNERS’ ASSOCIATION. Purchaser understands that the Community and the Property are subject to one or more declarations of covenants, conditions, restrictions and easements and/or tract declarations or similar instruments (the “Declaration”) and that one or more owners’ associations (the “Association”) has been established for the purpose of governing the affairs of the Association and to own, operate and maintain any common areas within the Community designated on the plat (the “Common Areas”) and to maintain any areas of Association responsibility identified in the Declaration and for the additional purpose of enforcing the Declaration with the goal of enhancing and maintaining the desirability of the Community. At Closing, Purchaser shall become a member of the Association and thereafter must abide by the terms and conditions of the Declaration, the Association’s Articles of Incorporation and Bylaws, all community management agreements entered into by the Association, any rules and regulations and architectural and/or landscaping guidelines for the Association (if applicable) (collectively, the “Association Documents”) and any other recorded covenants, conditions and restrictions affecting the Residence. Purchaser hereby acknowledges receipt of a copy of the Declaration and the Articles of Incorporation and Bylaws for the Association. Purchaser acknowledges that Association dues, presently at $___________ per month, are to be paid in advance in accordance with the Declaration. At Closing, Purchaser shall pay to the Association any transfer fees and payments required under the Declaration or by the Association to establish operating and maintenance reserves for the Community.
Purchaser’s Initials:__________/__________Key Points:

• The purchaser is a member of the homeowner’s association 
  and must abide by the rules.

• Purchaser has received a copy of the CC&Rs, By-laws, and Articles
  of Incorporation.

• Purchaser acknowledges the dollar amount and due date for the
  association fee.