Liens may be recorded against a property with or without consent of the owner, and homeowners are often left confused about the legalities of removing liens, especially wrongful liens. These are the most frequently asked questions about removing property liens in Arizona and their answers.
What is a Property Lien in Arizona?
A property lien in Arizona is a written notice that an alleged debt is owed and that the lien holder may have a claim to real estate. Mortgages and deeds of trust are liens and represent evidence that a debt may be owed. Once a lien is recorded, the property acts as collateral for the loan. Ultimately, the property can be foreclosed to pay off the debt if the borrower defaults.
What Kinds of Properties Can be Subject to Liens?
Personal dwellings like houses, condominiums and all structures affiliated with or affixed to the property in question are subject to liens. If it can be categorized as real estate, it can be subject to a property lien.
How is My Property Impacted by a Lien?
If you’re selling your home, you must have a clear title that is free of liens. Paying off the debt is the only way to clear up your title, which is why creditors place liens on properties in the first place. It is a guaranteed way for them to collect their money.
What are the Types of Property Liens?
Arizona law generally recognizes four types of property liens.
Consensual liens are just that: liens that you agreed to have placed on your home. Mortgages and deeds of trust fall into this category, so they must be addressed before selling your home. A consensual lien is typically released by a deed of release and reconveyance and is usually the responsibility of the title insurance company, so removing this type of lien is simpler than others.
When you purchase a property in an HOA, you consent to a lien for assessments against your property according to the CC&Rs of the HOA. This only becomes a problem for homeowners who fall behind on payment of fines, but even if that is the case, there may be grounds for invalidation of the lien.
Judgment liens are placed on properties belonging to those who have been pursued in civil court and must pay out an amount from the lawsuit
Mechanic’s liens are used by contractors as leverage when a homeowner has an unpaid invoice for labor and services. These are highly complicated with numerous intricate laws associated with them, so an experienced real estate attorney can usually find a defect in the procedure.
How Can I Remove a Property Lien?
There are multiple ways to remove improper liens under Arizona law. You do have a few options to clear your title when it cannot be settled directly with the other involved parties. Liens can be filed in error and it is common that liens were not promptly removed when the debt was paid. There are also many disputes over the validity of liens that can arise with property ownership. Quiet title action is the most common legal resolution in Arizona and special action under A.R.S §33-420.
Removing a Wrongful Lien from Your Property
A.R.S. § 33-420 provides that anyone who records a wrongful lien against your property is liable to pay you $5,000 or triple the actual damages, plus attorney’s fees, if successful. First, determine if the lien was wrongful, fraudulent or inaccurate. Then, consult an Arizona real estate attorney to help you seek removal.
Removing a Wrongful Lien by Quiet Title Action
If you have interest in a real property, you can take action against another party with adverse interest—in this case, the lienholder—to clear your title. A.R.S § 12-1101 authorizes a quiet title action, which, if successful, results in a judgment barring the named lienholder from ever again asserting the adverse interest.
Find an Experienced Phoenix Real Estate Attorney
If you are involved in a dispute about property liens, you want to make sure you have experienced legal representation. The most cost-effective approach for property owners in a potential dispute is working with a legal team that can evaluate your potential case and break down the best approach to the case. MacQueen & Gottlieb has significant experience with resolving legal disputes involving real estate and completing quiet title actions to make sure clear title is permanently established. Contact us today at 602-562-7218 to schedule an initial consultation or make an appointment online.