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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
homeowners' association liens; homestead exemptions
Purpose
Includes planned community association (HOA) and condominium unit owner's association (COA) liens for assessment against a home or condominium unit in the order of priority for liens after the protection of the homestead exemption.
Background
Arizona’s homestead exemption protects up to $250,000 of a person’s
equity in their dwelling from attachment, execution or forced sale. The
exemption applies to a person’s house and land, condominium or cooperative, mobile
home or mobile home and land. Property that is subject to the homestead
exemption is exempt from involuntary sale under a judgment lien, except in
connection with: 1) a consensual lien or contract of conveyance; 2) a
materialmen's lien; 3) a child support lien; and 4) a recorded civil judgment
or other nonconsensual lien that is not otherwise prescribed, if the debtor's
equity in the real property exceeds $250,000 (A.R.S.
§§ 33-1101
and 33-1103).
A COA and an HOA have a lien on a home or condominium unit for any assessment levied against the home or condominium unit from the time the assessment becomes due. The lien includes assessments, late charges, collection fees, attorney fees and other costs incurred with respect to the assessments. The lien may be foreclosed in the same manner as a real estate mortgage if the owner has been delinquent on assessments for a period of one year or in an amount of $1,200 or more, whichever occurs first, as determined on the date the action is filed. The COA or HOA has a lien for fees, charges, late charges, monetary penalties or interest after the entry of a judgment in a civil suit from a court of competent jurisdiction and the recording of the judgment.
A lien for assessments, charges for late payment of the assessments, reasonable collection fees and reasonable attorney fees and costs has priority over all other liens, interests and encumbrances on a home or condominium unit, except: 1) liens and encumbrances recorded before the recordation of the declaration; 2) a recorded first mortgage, a seller's interest in a first contract for sale on the unit recorded before the lien arising for any assessment or a recorded first deed of trust; or 3) liens for real estate taxes and other governmental assessments or charges against the home or unit. A COA or an HOA assessment lien is not subject to the protection of the homestead exemption (A.R.S. §§ 33-1256 and 33-1807).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Includes HOA and COA assessment liens in the order of priority for liens after the protection of the homestead exemption.
2. Makes technical changes.
3. Becomes effective on the general effective date.
Prepared by Senate Research
February 9, 2023
MG/sr