Lot Splitting and Subdividing
Municipality vs. County
The first issue that needs to be determined regarding lot splits and subdividing is the location of property. If the property is in a municipality, A.R.S. § 9-463.01, et seq. is applicable and the municipality regulates. See A.R.S. § 9-463.01(A) (“Pursuant to this article, the legislative body of every municipality shall regulate the subdivision of all lands within its corporate limits.”). On the other hand, if the property is located within an unincorporated portion of a county, the county board regulates. See
A.R.S. § 11-806.01(A) (“The county board of supervisors shall regulate the subdivision of all lands within its corporate limits, except subdivisions which are regulated by municipalities.”)
Both sets of statutes contain similar processes for approval with regard to the platting of a subdivision. With respect to land lying outside of a municipality, a subdivider is required to obtain approval of the plat (both preliminary and final, although preliminary may be waived in specific circumstances (see A.R.S. § 11-806.01(N)) through a process that includes a number of hearings and meetings, including formal hearings with the county planning and zoning commission and the county board of supervisors. See A.R.S. § 11-806.01. Similarly, a subdivider must obtain plat approval (preliminary and final) in a municipality. See A.R.S. § 9-463.01(C) (preliminary plat); § 9-463.01(G) (final plat).
The biggest difference is in the definition of a subdivision. With respect to a municipality, a subdivision is land divided into four or more lots. See A.R.S. § 9-463.02. With respect to land outside of a municipality or unincorporated county land, a subdivision is when land is divided into six or more lots that are each less than thirty-six (36) acres. See A.R.S. §§ 11-806.01, 32-2101(55). Note that unincorporated county land that is divided into lots that are more than thirty-six (36) acres but less than one hundred sixty (160) acres are generally referred to as unsubdivided lands. See A.R.S. § 32-2101(59). These “unsubdivisions” will be addressed later.
Subdivision Public Reports
Unlike the platting requirements, there is no difference between county and municipality for purposes of the subdivision requirements under A.R.S. § 32-2181 et seq. and especially the public report requirements thereunder. This does mean that you could have a situation where you have a division of land into 4 or 5 lots within a municipality that the municipality considers a subdivision (implicating the platting requirements), but the Arizona Department of Real Estate does not (no public report necessary).
The public report content requirements are set out in A.R.S. § 32-2181. This is further discussed in A.R.S. § 32-2183 regarding the sale of subdivided property. Of note, generally, a subdivider must state that adequate water supply is available. See A.R.S. § 32-2181(F).
Unsubdivisions also have to have reports, but these do not appear to be as involved as a subdivision report. See A.R.S. § 32-2195. Water studies have to be disclosed, but certification of assured water supply is not required. See A.R.S. § 32-2195(H).
Municipal “Land Splits”
Even if a division of land is not a “subdivision”, it may be subject to municipality review as a land split. A land split is the division of land that is two and a half (2 ½) acres or less into 2 or 3 lots. See A.R.S. § 9-463(3). Pursuant to A.R.S. § 9-463.01(T), the legislative body of a city or town may regulate these lot splits, but only the dividing lines, area and shape of the parcels. The legislative body cannot regulate the terms and conditions of sale, etc.
County “Land Splits”
Similar to the municipal land split, a county can adopt restrictions and regulations requiring land split approval for splits of five or fewer lots. See A.R.S. § 11-809. These are also limited, but appear to be a little more involved than the municipal land split. The county can examine compliance with zoning requirements, legal access, and physical access via a two-wheel drive vehicle. See A.R.S. § 11-809(B).
It is unlawful to subdivide land either directly or in concert in violation of the subdivision laws. See A.R.S. § 32-2195(D). “‘Acting in concert’ means evidence of collaborating to pursue a concerted plan.” See A.R.S. § 32-2101(1).
A.R.S. § 9-463.03 also states that it is unlawful to offer to sell or lease, contract to sell or lease or to sell or lease any subdivision of lot without a final, recorded plat. A.R.S. § 11-806.01(c) also indicates that recording a plat without approval of the board is a class 2 misdemeanor.
Statutory Civil Remedies
The sale of land prior to a public report required by A.R.S. § 32-2181 or the failure to deliver a public report renders a sale rescindable. There is a three year statute of limitations that runs from the date of execution of the purchase or lease agreement. See A.R.S. § 32-2183(I). Again, this does not run from the date of actual knowledge.