Arizona Legislative Bill Summaries
Impacting Real Estate and Title
David J. Itzkowitz, Attorney at Law
Assistant Vice President – National Commercial Services
Security Title Agency
2398 E. Camelback Road, Suite 130~Phoenix, AZ 85016
Office - (602) 381-0100~Fax - (602) 381-1145
Cell – (602) 625-5250
HB2555: Judgment liens; recorded information statement
HB 2555 prescribes the requirements to perfect a lien against real property. Signed by the Governor on 5/11/16.
1. Stipulates that a certified copy of a judgment requiring the payment of money and a separate information statement must be recorded with the county recorder in order for the judgment to become a lien on the real property of the judgment debtor.
2. Clarifies that a judgment requiring the payment of money does not become a lien on real property until the separate information statement is attached to the judgment being recorded.
a. States the current required items in the information statement are the minimum requirements.
3. Clarifies that a judgment that does not have the information statement attached does not become a lien on real property until the judgment creditor records an amendment to the recorded judgment containing the information statement.
4. Removes the provision relating to the priority of the judgment.
A judgment creditor may file and record a certified copy of a court judgment in the office of the county recorder in each county where the judgment creditor desires the judgment to become a lien on the real property of the judgment debtor. On recording, the judgment becomes a lien for a period of five years from the date it is given (A.R.S. § 33-961).
Additionally, a judgment or any renewal that requires the payment of money and that is recorded must be attached to a separate information statement that contains:
1) The correct name and last known address of each judgment debtor;
2) The name and address of the judgment creditor;
3) The amount of the judgment or decree as entered or as most recently renewed;
4) If the judgment debtor is a natural person, the judgment debtor’s social security number, date of birth and driver license number; and
5) Whether a stay of enforcement has been ordered by the court and the date the stay expires.
Amendment 4315: A civil judgment in favor of this state is exempt from this section. This subsection applies retroactively to all judgments in favor of this state without regard to when the judgment was recorded.
Amendment 4991: Provides that failure to substantially comply with the statutory filing requirements for a money judgment results in that judgment not becoming a lien on the real property of the judgment debtor.
HB2076: Annexation; single property owner; Exception
HB 2076 modifies the requirements for which a territory is considered contiguous. Signed by the Governor on 04/05/16.
1. Provides that a territory is considered contiguous if all of the following apply:
a. All of the real property within the territory is owned by one person.
b. The city or town and the owner of the property agree to the annexation.
c. The territory adjoins the exterior boundary of the annexing city or town for at least 300 feet.
A.R.S. § 9-471 outlines the requirements to extend and increase the corporate limits of a city or town by annexation. Specifically, subsection H states that a territory is not considered contiguous unless the territory adjoins to the exterior boundary of the annexing city or town for at least 300 feet; the territory is at least 200 feet in width at all points, excluding right-of-ways and roadways; and the parcel is measured from where the territory adjoins the annexing city or town to the furthest point of the parcel and cannot be more than twice the maximum width of the annexed territory.
HB2172: Planned communities; architectural designs; approval
HB 2172 prohibits the unreasonable withholding of a construction project’s architectural designs, plans and amendments. Signed by the Governor 03/30/16.
1. Stipulates that the approval of a construction project’s architectural designs, plans and amendments may not be unreasonably withheld by the planned communities’ design review committee, architectural committee or a committee that performs a similar function (review committee).
A planned communities’ review committee must include at least one member of the board of directors who serves as chairman of the committee. A planned community that has enacted design or architectural guidelines and also requires a security deposit for new construction or rebuilds of the main residential structure on a lot in a planned community must: 1) place the deposit in a trust account; 2) hold a final design approval meeting and provide written acknowledgement that the approved plans are in compliance with all rules and guidelines at the time of approval; 3) provide two on-site formal reviews; 4) provide written reports and follow the outlined procedures for the release of the security deposit; and 5) declare that neither the approval of the plans or approval of the actual construction constitutes a representation or warranty of compliance with applicable government requirements or engineering, design or safety standards (A.R.S. § 33-1817).
HB2106: Homeowners' associations; enforcement grace period
HB 2106 modifies the response period for a notice of violation from a homeowners’ association (HOA). Signed by the Governor 05/12/16.
1. Stipulates that a condominium unit owner or planned community member (member) has 21 calendar days to provide the HOA with a written response to a notice of violation, rather than 10 business days.
2. Makes technical changes.
A member who receives written notice that the property condition is in violation of a condominium or community document requirement without regard to whether a monetary penalty is imposed by the notice may provide the HOA with a written response by certified mail within 10 business days. After receipt of the member’s response, the HOA has 10 business days to provide a written response containing the following information, unless previously provided in the notice: 1) the provision of the document that has allegedly been violated; 2) the date of the violation or date the violation was observed; 3) the first and last name of the person or persons who observed the violation; and 4) the process to contest the notice. Unless the process to contest the notice is provided in the violation, an HOA is prohibited from proceeding with any action to enforce the documents, including the collection of attorney fees, before or during the exchange of information between the member and the HOA (A.R.S. §§ 33-1242 and 33-1803).
HB2125: District boundary modifications; parcel lines
HB 2125 allows special taxing district (district) boundary lines to be adjusted if the current lines split a parcel. Signed by the Governor 5/11/16.
1. Allows a property owner whose parcel is split by a district boundary line to request the county assessor, in writing, to modify the district boundary so that the entire parcel is contained within the district that governs the majority of the area of the parcel.
a. Specifies that if the parcel is split evenly between two or more districts of the same type, the property owner may choose which district to join.
2. Authorizes a county assessor to initiate the consolidation of a parcel found to be split into two districts.
a. Requires the county assessor to provide a property owner of a split parcel with at least 30 days’ notice of the consolidation.
b. Allows the property owner to accept or reject the consolidation.
3. Exempts various specified districts from the provisions of this Act.
4. Makes technical and conforming changes.
A.R.S. § 48-272 specifies that any proposed district formed after November 1, 2007 may only include entire parcels of real property within its boundary lines as determined by the county assessor and is prohibited from splitting any parcels.
HB2382: Property; declaration amendment; procedure
HB 2382 creates a process for amending a community declaration. Signed by the Governor 5/17/16.
1. Allows a community declaration to be amended by the association, or if there is no association or board, the property owners, by an affirmative vote or written consent of the number of eligible voters or owners required under the declaration.
a. An amendment may occur during the period of declarant control if written consent of the declarant is provided.
b. Requires the assent of any individuals or entities that are specified in the declaration.
2. Allows an amendment to apply to fewer than all of the lots or less than all of the property, if:
a. The amendment receives the affirmative vote or written consent of the number of voters required by the declaration, including individuals or entities specified in the declaration, and
b. The amendment receives the affirmative vote or written consent of all of the owners that the amendment applies to.
3. Requires the association or, if there is no board, an owner, to prepare, execute and record a written instrument outlining the amendment within 30 days of adoption.
4. Makes an amendment to the declaration effective immediately when the instrument is recorded in the county where the property is located, regardless of any other provision in the declaration requiring periodic renewal.
5. Applies this process to planned communities and private covenants.
6. Exempts condominiums and timeshares from the section relating to private covenants.
7. Makes technical and clarifying changes.
A.R.S. Title 33, Chapter 4 outlines requirements for conveyances and deeds. Under A.R.S. § 33-440, a property owner may enter into a private covenant that is valid and enforceable as long as specific conditions are met. The statute defines a private covenant as any uniform or non-uniform covenant, restriction or condition regarding real property that is contained in any deed, contract, agreement or other recorded instrument affecting real property.
A.R.S. Title 33, Chapter 16 governs planned communities. A.R.S. § 33-1802 defines relevant terms, including an association, planned community and a declaration. Declaration is defined as any instruments, however denominated, that establish a planned community and any amendment to those instruments. A.R.S. 33-440 uses the same definition of a declaration as is provided in A.R.S. § 33-1802.
HB2403: Tax lien deeds; aggregate fees
HB 2403 caps the amount a county treasurer may charge on a foreclosure right to redeem property deeds.
1. Stipulates the aggregate fee cannot exceed $500 for any judgment foreclosing the right to redeem 10 or more individual parcels.
2. Applies retroactively to any judgement that is entered before the effective date and for any deed that has not been applied or issued.
If a lien is not redeemed, the purchaser may bring an action to foreclose the right to redeem at any time between 3 years after the tax lien sale and 10 years after the last day of the month in which the lien was acquired. The action to foreclose the right to redeem must be filed in the county superior court in which the real property is located and must name the county treasurer as a party of the action (A.R.S. § 42-18201). Upon receiving a certified copy of a judgement foreclosing the right to redeem; and a fee of $50 dollars per parcel, the county treasurer must execute and deliver to the party a deed conveying the property (A.R.S. § 42-18205).
SB1432: Private property; acquisition; United States (NOW: conservation easements; tax classification; registry)
SB 1432, effective on January 1, 2017, establishes a separate classification for and requires county assessors to establish a digital registry of properties burdened by a conservation easement. Signed by the Governor 5/11/16.
1. Establishes a separate tax classification for properties burdened by conservation easements and establishes an assessment ratio of 15%.
2. Requires all county assessors to establish and maintain a digital registry of properties burdened by a conservation easement and classified as class two C property after January 1, 2017. The registry must include the following:
a. Property owner’s name;
b. Date the easement was created or recorded;
c. Duration of the easement; and
d. Date or conditions for the easement to terminate, if established as a limited easement.
3. Requires all county assessors to review and revise the information in the registry to verify that the properties should remain as class two C.
4. Contains an effective date of January 1, 2017.
5. Makes technical and conforming changes.
A.R.S. § 42-12002 and § 42-15002 establishes classifications of and the assessment ratio for class 2 property, which includes agricultural property, properties of non-profit organizations and vacant land. Class two contains two subclassifications established as class two P (personal property) and class two R (real property). SB 1432 will establish a third subclassification specifically for property burdened by a conservation easement with an assessment ratio of 15%. The assessment ratio for Class 2 P and R is 15%, which was effective on January 1, 2016.
A conservation easement is a voluntary agreement between a landowner and an organization or government that limits the use of the land that is burdened by the easement. Conservation easements may be permanent or temporary; the ownership of the land is maintained by the landowner but the development rights belong to the easement holder and vary depending on the terms of the easement.
HB 2597: Delinquent property taxes; interest; reduction
HB 2597 reduces the annual interest rate on delinquent property taxes from 16% to 10%.
1. Decreases the delinquent property tax interest rate from 16% to 10%.
A.R.S. Title 42, Chapter 18 regulates the collection and enforcement of property taxes. If a property tax is not paid by its delinquency date, the tax becomes delinquent. All taxes have an interest rate from the time of delinquency at a rate of 16% per year until paid. However, interest will not be collected if the delinquency is the result of an error by the county assessor or county treasurer or if the full year tax for the year is paid on or before December 31 of that tax year. The date in which a tax becomes delinquent depends on whether the taxpayer is paying his/her liability in one payment or splitting it between two.
For all properties delinquent after December 31 of each year, the county treasurer is required to hold a tax lien sale. The lien is sold at a public auction, in which prospective investors bid on the lowest interest rate the investor may receive. The maximum allowable interest rate on a tax lien is the delinquency interest rate of 16%. If there are no bids for a tax lien, the lien is assigned to the state at the delinquency interest rate.