Generally as a part of a real estate purchase, the buyer and the seller must disclose the purchase price by filing an Affidavit of Value with the County Recorder where the property is located. This recorded document is a part of the public data base used by the County Assessor, real estate agents, brokers, potential investors and others to get a sense of value in the area.

There are good reasons where valuation statements are unnecessary and unimportant. In the past, property owners were often reluctant to publicly disclose the purchase price arguing that the valuation is confidential, uncertain or unknown.

In 2012, Arizona added additional circumstances relating to intra-family and related business transfers where Affidavits of Value are not required.

It is now clear that an Affidavit of Value is not required for intra-family transfers when there is only nominal consideration between: (i) husband and wife or ancestor of the husband and wife; (ii) parent and child, including natural or adopted children and their descendants; (iii) grandparents and grandchildren; (iv) natural or adopted siblings.

Another major category where Affidavits of Value are not required relate to transfers within a common business structure and trusts. The specific exemptions are: (i) By a subsidiary to its parent or from a parent to a subsidiary; (ii) among commonly controlled entities; (iii) from a member to its limited liability company or from a limited liability company to a member; (iv) from a partner to its partnership; (v) from a partnership to a partner; (vi) from a joint venturer to its joint venture; (vii) from a joint venture to a joint venturer; (viii) from a trust beneficiary to its trustee; (ix) from a trustee to its trust beneficiary; and (x) from any of the preceding entities to a single purpose entity in order to obtain financing.

The elimination of filing an Affidavit of Value now reflects practical considerations in intra-family and related business transactions.

Lat J. Celmins