Part Five of Five: Leasing and Miscellaneous Forms

The National Association of REALTORS® (NAR) settlement in the Sitzer-Burnett class action lawsuit includes significant practice changes that will be implemented in mid-August 2024.  To assist its members prepare for practice changes and be successful in the new environment, the Arizona REALTORS® has created and revised eighteen (18) forms.  Two (2) additional forms were also created and revised that are unrelated to the NAR settlement.  The new/revised forms, redlines, videos and articles on their use are available here.  This article is part five of a five part series that will introduce the forms prior to their publication on August 1, 2024.  Specifically, this article will discuss leasing forms (not subject to the practice changes), slightly revised forms to be compliant with the practice changes, and forms unrelated to the NAR settlement that will coincidentally be available for use on August 1^st.

The new Tenant-Broker Exclusive Employment Agreement can be found here.

The practice changes do not apply to commercial property, vacant land, or leasing.  However, the Buyer-Broker Exclusive Employment Agreement (BBEEA) that could previously be used by tenant brokers was heavily revised and the workgroup removed all references to leasing to make the BBEEA less complicated.  There was thus a need to create an employment agreement specific to tenant brokers.  For ease and familiarity, the workgroup chose to use the existing BBEEA as a base and made minor changes to make the form specific to tenant brokers.

The major differences between the current BBEEA and the new Tenant-Broker Exclusive Employment Agreement are as follows:

The Term paragraph replaced “Termination Date” with “Expiration Date” to be consistent with other forms and align with the Buyer/Tenant Employment Agreement Addendum.

The Retainer Fee paragraph includes a click box if a flat retainer amount is agreed upon OR a click box if a per showing retainer fee is agreed upon with the possibility of a maximum fee.  In either circumstance, an additional click box needs to be checked to clarify if the retainer fee will be credited against the broker compensation.

The Broker Compensation paragraph matches much of the revised BBEEA that includes an ascertainable amount or rate of compensation but specifies the broker receives that compensation OR the compensation received by the landlord or landlord’s broker, whichever is greater. As noted above, since the NAR settlement does not pertain to leases, this form is not required to specify a sum certain.

The redline of the revised Property Management Agreement (PMA) can be found here.

The PMA was slightly revised to be consistent with other Arizona REALTOR® forms and includes required language from the NAR settlement.

The Term paragraph replaced “Termination Date” with “Expiration Date” to be consistent with other forms and align with the revised Listing Contract Addendum.

The disclosure language on lines 130-131 was previously located at the bottom of the Compensation Section of the PMA.    It is now in bold and  relocated to directly above the compensation section to make it more prominent and now includes the Owner’s initials to confirm they have read the disclosure.

The redline of the revised Real Estate Agency and Disclosure Election (READE) can be found here.

The READE form was slightly revised to clarify that a seller may choose to offer compensation to a buyer’s broker and, if so, the fact that the amount offered is fully negotiable.

The new Notice to Tenant of New Management (Notice) can be found here.

The Notice will allow property managers to use an Arizona REALTORS® form to notify a tenant that a new property management company is representing the landlord.  It provides contact information for the new property management company to send notices, payments, and repair requests.  The Notice also specifies where future rent payments should be sent and who holds the tenant’s security deposit.

Aaron M. Green, Esq., a licensed Arizona attorney, is the General Counsel for the Arizona Association of REALTORS®.  This article is of a general nature and reflects only the opinion of the author at the time it was drafted.  It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.