Occupational Licensing; Reciprocity

Arizona is now the first state to allow for broad recognition of out-of-state licenses with Governor Doug Ducey signing HB 2569: “Occupational Licensing; Reciprocity” into law on April 10, 2019. The legislation, which impacts many professions including barbers, nurses, bus drivers, respiratory therapists, security guards, teacher assistants and, yes, real estate licensees, was sponsored by Representative Warren Petersen.

As your representative at the state capitol, the Arizona REALTORS® were the only industry group to oppose HB 2569, which we opposed because of concerns for public safety. In Arizona, to be a licensed real estate agent an individual must take 90 classroom hours of real estate instruction and satisfactorily pass the state’s licensure exam and, most importantly, complete 6 additional hours in contract writing prior to license activation.

Further, it was the Association’s position that HB 2569 was unnecessary for the real estate industry because current law, A.R.S. § 32-2124 B and C, already allows the Arizona Department of Real Estate to “waive all or a portion of the prelicensure course requirement, other than the twenty-seven-hour Arizona-specific course, for an applicant who holds a current real estate license in another state.”

Despite our Association’s best efforts to convince the bill sponsor and the Governor’s office of the importance of real estate licensees understanding Arizona’s unique real estate laws and ability to write contracts, we were unsuccessful in our attempts to amend the bill to provide the protections to the public we believed are necessary.

Since the signing of the legislation, there have been several questions raised by our membership. Below is a quick reference guide to those questions and what this bill may mean for you.

What does this bill mean?

Through the passage of this legislation, an individual must establish residency in Arizona, apply through the Arizona Department of Real Estate, take the state specific portion of the examination at the Commissioner’s discretion, pass a background check (verifying that their license is in good standing in their previous state), obtain a fingerprint clearance card, and pay licensing fees.

Keep in mind, this isn’t reciprocity in the sense that if an individual is licensed in another state, that individual is automatically permitted to practice here or is given an Arizona real estate salesperson license.

When does the law go into effect?

There is no specific effective date, which means it becomes effective 90 days after the legislative session adjourns. There is no set date for adjournment, but session can’t continue beyond June 30, so the latest the bill will become effective is September 28, 2019.

What does this bill mean for brokers?

Brokers still have discretion regarding who they allow to hang their license under them, and they can consider the process by which an individual obtained their license. This is normal practice now and a practice that can continue moving forward.

Why didn’t Arizona REALTORS® oppose the bill?

We were the only industry to come out in opposition to the legislation. We lobbied the sponsor, the Governor and staff in the House/Senate/Governor’s office to amend the bill to mirror what is current law and the current waiver statutes. Unfortunately, the bill had strong support from other special interests and our elected officials moved ahead and the bill was passed into law without the additional education requirements we requested.