2010 Arizona Revised Statutes
Title 32 - Professions and Occupations
32-2193.32 Condominium recovery fund; award limits

32-2193.32. Condominium recovery fund; award limits

A. The commissioner shall establish and maintain the condominium recovery fund for the benefit of any buyer aggrieved by the failure of a subdivider of a condominium to complete the condominium project. The fund shall pay only for losses to the aggrieved person directly arising out of the real estate transaction, including reasonable attorney fees and court costs, in which both of the following apply:

1. The contract between the buyer and the subdivider in connection with the sale of a condominium is terminated without default by the buyer and the subdivider fails to refund the buyer's deposit in accordance with the terms of the contract.

2. In accordance with the terms of the contract between the subdivider and the buyer, the subdivider is not required to and has not placed the deposits in a neutral escrow account at a company licensed to perform escrow business in this state pursuant to title 6, chapter 7 or in the trust account of a real estate broker licensed pursuant to this chapter for the benefit of the purchaser.

B. An award from the fund shall not exceed:

1. Twenty per cent of the base price for each unit, according to the contract between the subdivider and the aggrieved buyer in the transaction.

2. One million dollars for each project, regardless of the number of buyers aggrieved or the number of units involved.

C. When awards from the fund are made and have reached the limits prescribed by subsection B, further awards shall not be made from the fund to compensate a buyer for the acts of a subdivider.

D. The fund may pay only for losses arising out of a transaction in which the defendant subdivider failed to complete the condominium project. The fund shall not pay for losses in a subdivision of detached, single-family homes.

E. The fund is not liable for damages or losses resulting from or caused by any of the following:

1. Speculation, including lost profits and other unrealized losses.

2. Transactions for condominiums in which the deposits were held by a neutral escrow company licensed to perform escrow business in this state pursuant to title 6, chapter 7 or in the trust account of a real estate broker licensed pursuant to this chapter.

3. Loans, notes, limited partnerships or other securities, regardless of whether the loss was caused by an investment in or was secured by real property.

4. A judgment entered against a bonding company if the bonding company is not a principal in the underlying real estate transaction.

5. A tenant's conduct or neglect.

6. Vandalism.

7. Natural causes.

8. Punitive damages.

9. Postjudgment interest.

10. Undocumented transactions or losses.