Automatic Lien in AZ

Started by CherieH • 4 replies • 2371 views

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CherieH (Arizona)
Posts: 19

Posted:

I'm told there is an automatic lien on unpaid assessments in Az. Do these need to be recorded or filed? If so, do they need to be updated each year? I read quite an argument as to whether a lawyer was needed but I never saw the resolution to that argument. So is one needed? And if so, is it to do the recording? Our PM says since it's automatic we don't need to do anything.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

They are NOT automatic. How could they be? You don't always need a lawyer to file a lien. Some states allow the HOA/individual to file it themselves. There are also states/counties that allow them to be filed at no cost. However, I would suspect most do charge a fee to file from a few dollars to a few hundred. Your best to call up your local county courthouse and ask them the proper procedure. There are two types of liens. One is a regular mechanics type lien and the other a "Super lien". Not all states have a "Super Lien". A super lien just means the lien that lien stands an equal footing with the bank. Which the bank ALWAYS gets paid first no matter what.

I would ask the PM what their process is for placing a lien on a deliquent property. They say they are automatic then explain that process. We had a policy of when an account was considered deliquent or not. At 6 months behind we placed a lien. It's good to have a policy in place and every owner knows that policy. That way when the time limit comes they can make arrangements to pay up.

A lien typically doesn't have to be renewed. However, like filing one, it's good to check on if it does expire or not. Each state is different in that too. The amount usually accumulates with legal fees added into the amount owed. So if someone doesn't pay for a year and decides to pay the lien off. They will be charged that years owed dues plus the legal fees involved in filing the lien.

I would consult an attorney for further information. You may use them once just to get familiar with the process and be able to handle it amongst yourselves later.

Former HOA President

CherieH (Arizona)
Posts: 19

Posted:

Melissa, that is why I am confused. This is what I read:

HaroldS
(Arizona)

Posts:904

04/20/2008 11:21 PM Quote Reply
Anita - read our state statutes. There is an automatic lien on unpaid assessments in Arizona. However, you can only foreclose when the unpaid amount goes over $1,200 or on any amount delinquent over one year. Why get an attorney involved before you have to? Why hasn't your management company told you this?

What the heck is an 'automatic lien'. I even called the county court house for info. and was told to contact a lawyer.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sounds like you need to talk to a lawyer. Your state may be one that requires that. Never heard of an automatic lien...Think someone else is confused...

Former HOA President

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By CherieH on 02/10/2012 10:11 AM
I'm told there is an automatic lien on unpaid assessments in Az. Do these need to be recorded or filed? If so, do they need to be updated each year? I read quite an argument as to whether a lawyer was needed but I never saw the resolution to that argument. So is one needed? And if so, is it to do the recording? Our PM says since it's automatic we don't need to do anything.

Liens in Arizona are automatic up to a point. The HOA has an unrecorded lien on all delinquent assessments. The lien is not recorded. If the owner sells, the lien must be paid before the property may be transferred. So how does the buyer know about the lien? Your HOA is required by law to record the contact information for either the HOA itself or its management company. The real estate agent and title company have the duty to contact the HOA or management company and see if there is a lien and pay it off.

Now the bad news: the lien is only good for the last three years. If your HOA wants to collect more than that they have to file a civil lawsuit and obtain a judgment. This is also true if your HOA wants to foreclose. Since first mortgages have precedence over HOA liens, foreclosure is usually a futile gesture.

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