Final answer:
In Arizona, a subdivider may accept only a lot reservation prior to obtaining a Public Report. This reservation is a non-binding statement of interest by potential buyers, whereas other contracts like ground leases, building contracts, or purchase contracts are binding and require the Public Report to be issued first.
Step-by-step explanation:
In Arizona, prior to the issuance of a Public Report by the Arizona Department of Real Estate (ADRE), a subdivider may not enter into a binding purchase contract for the sale of subdivided lands. However, the subdivider is permitted to accept a lot reservation. A lot reservation is essentially a statement of interest by a potential buyer to purchase a lot, which may include a refundable deposit held in a trust account. It does not create a legal obligation to purchase and allows the interested party to reserve the right to purchase a lot upon issuance of the Public Report without being legally bound by a contract.
A ground lease, building contract, or purchase contract would create a binding legal obligation and thus cannot be entered into before the Public Report is obtained. The Public Report provides important disclosures to consumers about the property, ensuring they have necessary information before entering into a binding contract. It includes details about the subdivision, availability of utilities, water supply, access, and other important factors.