Assigned to GOV                                                                                                AS PASSED BY COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1494

common expense liens; foreclosure; amount

Purpose

Increases the amount over which an owner in a planned community association (HOA) must be delinquent to $10,000 and the period of delinquency to two years for an HOA to foreclose a common expense lien.

Background

An HOA applies a common expense lien to a property for any assessment levied against that property from the time the assessment becomes due. The HOA board of directors must exercise reasonable efforts to communicate with the member, provide outlined written notice to the member at least 30 days before authorizing collection and offer a reasonable payment plan before filing a foreclosure action. A common expense lien is extinguished six years after the full amount of the assessment becomes due unless proceedings to enforce the common expense lien are instituted. The HOA's common expense lien may be foreclosed in the same manner as a mortgage on real estate if the owner has been and remains delinquent in the payment of assessments for a period of one year or in the amount of $1,200, whichever occurs first, as determined on the date the action is filed (A.R.S. § 33-1807).

Common expense lien means the lien for assessments, authorized charges for late payment of assessments, reasonable collection fees and costs incurred or applied by an HOA and reasonable attorney fees and costs that are incurred with respect to the HOA, if the attorney fees and costs are awarded by a court. Member expenses are not enforceable as common expense liens (A.R.S.
§§ 33-1802 and 33-1807).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Increases, from one year to two years, the period of delinquency a person must be delinquent for an HOA to foreclose a common expense lien.

2. Increases, from $1,200 or more to $10,000 or more, the delinquent assessment amount that allows an HOA to foreclose a common expense lien.

3. Makes technical changes.

4. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Increases, from $2,000 or more to $10,000 or more, the increase to the delinquent assessment amount that allows an HOA to foreclose a common expense lien.

2. Increases, from one year to two years, the period of delinquency that allows an HOA to foreclose.

Senate Action

GOV         2/19/25         DPA        5-2-0

Prepared by Senate Research

February 20, 2025

AN/SDR/slp