ISSUE:

The bank recently foreclosed on eight contiguous five-acre lots in a small subdivision. The bank is combining four of the five-acre lots into one twenty-acre lot. The bank will then offer for sale the one twenty-acre lot, and the four smaller five-acre lots. Is the bank as an REO seller required to procure a public report for the sale of the one twenty-acre lot and the four five-acre lots?

ANSWER:

Probably not. A public report from the ADRE is required before a subdivider may sell or offer for sale any “subdivided land.” A.R.S. § 32-2181. Land that is divided or proposed to be divided for sale into six or more lots or parcels is considered “subdivided land.” Anyone who offers for sale six or more lots in a subdivision is a “subdivider.” A.R.S. § 32-2101 (55). Therefore, a public report is probably not required for the sale of the five lots, namely, the one twenty-acre lot and the four five-acre lots.

Note: A person or group of persons may not circumvent the subdivision statutes by acting “in concert” to divide a parcel of land or to sell subdivision lots. See A.R.S § 32-2181 (D).