Arizona HOA Foreclosure

Section 1 — Overview: How HOA foreclosure works in Arizona

Arizona built two systems for this, and the first thing to know is which one you are standing in. The state governs association foreclosure through two parallel statutes — one for condominiums in Title 33, Chapter 9, and one for planned communities in Title 33, Chapter 16. The two track each other closely, but they are not interchangeable.^{1, 2}

Each statute creates a common expense lien. The condominium lien arises under Ariz. Rev. Stat. § 33-1256; the planned-community lien arises under § 33-1807.^{1, 2} Neither lien can go to foreclosure until the owner crosses a statutory minimum debt threshold — and here the two systems part ways. A condominium association may foreclose only when assessments run one year delinquent or reach $1,200. A planned-community association has to wait longer: 18 months delinquent or $10,000, the higher bar that Senate Bill 1494 set when it amended § 33-1807 effective September 26, 2025.^{1, 2, 3}

Priority matters as much as the threshold. Arizona never joined the Uniform Common Interest Ownership Act, and it never adopted a six-month super-priority, so both association liens sit junior to a recorded first mortgage or first deed of trust.^{1, 2} The method matters too. Unlike the deed-of-trust foreclosures that dominate the residential market, an Arizona association forecloses its lien judicially, in Superior Court. Each statute says the lien is foreclosed “in the same manner as a mortgage on real estate,” and Arizona requires mortgages to be foreclosed by court action under § 33-721.^{1, 2, 4}

Because the process runs through a court rather than a trustee’s sale, a six-month statutory right of redemption attaches after the sheriff’s sale under Ariz. Rev. Stat. § 12-1282 — the opposite of the no-redemption rule that follows a non-judicial trustee’s sale.^{5, 6} For property managers, boards, and association counsel, the lesson is plain: Arizona foreclosure is slow, court-supervised, threshold-gated, and junior to the mortgage.

Section 2 — The statutory framework

2A. The condominium lien under Title 33, Chapter 9

Ariz. Rev. Stat. § 33-1256(A) hands a condominium association a common expense lien on a unit the moment an assessment comes due, and recording the declaration does the work of notice and perfection — so the association never has to record a separate notice of lien.¹ That lien covers more than back dues. It secures unpaid assessments, late charges if the declaration authorizes them, reasonable collection fees and costs, and reasonable attorney fees a court awards — the bundle that HB2648 (2024) named the “common expense lien.”^{1, 7}

What it does not cover is just as important. Fines and other “unit owner expenses” are not enforceable as common expense liens. They turn into a judgment lien only after a civil judgment is recorded, that judgment lien cannot be foreclosed, and it takes effect only on conveyance.¹ The foreclosure threshold under § 33-1256(A) holds at one year of delinquency or $1,200 or more, whichever comes first, measured on the date the association files and counting only assessments — not collection fees, attorney fees, or late charges.¹ Before it files, the board has to make a reasonable effort to reach the owner and offer a reasonable payment plan.¹

Priority confirms the rest. Under § 33-1256(C), the lien sits ahead of most other claims — but not liens recorded before the declaration, not a recorded first mortgage or first deed of trust, and not liens for real estate taxes and other governmental charges. That keeps the association junior to a first mortgage and leaves it with no super-priority.¹ And the clock runs: the lien is extinguished unless the association begins enforcement within six years after the full assessment becomes due.¹

2B. The planned-community lien under Title 33, Chapter 16

The planned-community side starts out looking identical. Ariz. Rev. Stat. § 33-1807(A) gives the association a common expense lien on a property the moment an assessment comes due, and, just as with condominiums, recording the declaration perfects the lien with nothing more to file.² The lien secures the same categories of money, and “member expenses” like fines stay off the foreclosable list, converting only into a judgment lien that cannot be foreclosed.^{2, 7}

Then comes the difference that changes everything: the threshold. Effective September 26, 2025, SB1494 rewrote § 33-1807(A) so a planned-community association can foreclose only when the owner runs 18 months delinquent on an assessment, or owes $10,000 or more, whichever comes first, measured on the date the association files.^{2, 3} That replaced the old one-year/$1,200 standard and pulled the planned-community number well away from the condominium number, so the two chapters no longer line up on the one figure that matters most.^{2, 3}

The rest mirrors the condominium chapter. Section 33-1807(C) ranks the lien ahead of most claims but behind pre-declaration liens, a recorded first mortgage or first deed of trust, and tax and governmental liens — junior status, no super-priority.² The six-year statute of limitations in § 33-1807(G) matches its condominium counterpart.² And the board, here too, must try to reach the owner and offer a reasonable payment plan before it files.²

2C. Foreclosure method and federal overlays

So the method is judicial, start to finish. Both § 33-1256 and § 33-1807 call for foreclosure “in the same manner as a mortgage on real estate,” and § 33-721 requires a court action to foreclose a mortgage. Put those together and the association has to file a civil suit in Superior Court, win a judgment and decree of foreclosure, and sell the property at a sheriff’s sale. Arizona gives it no shortcut: there is no non-judicial trustee’s sale for an association lien.^{1, 2, 4} The judgment or decree can carry costs and reasonable attorney fees for the prevailing party.^{1, 2}

Because a court runs the sale, the owner gets a six-month right of redemption afterward under Ariz. Rev. Stat. § 12-1282 — a window that shrinks to 30 days if the court finds the property abandoned.⁵ The no-redemption rule of § 33-811(E) does not reach this; it governs deed-of-trust trustee’s sales, not association foreclosures.⁶

Federal law sits on top of all of it. When third-party collectors or association-affiliated collectors dun an owner before suit, that is debt collection under the FDCPA, 15 U.S.C. § 1692 et seq. The security-interest carve-out the Supreme Court recognized in Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), grew out of a Colorado non-judicial foreclosure and reaches only so far — Arizona’s judicial foreclosures and the collection that precedes them stay squarely inside the FDCPA.⁸ The Servicemembers Civil Relief Act, 50 U.S.C. § 3953, demands a court order before a covered sale and lets a servicemember seek a stay, and its default-judgment protections under § 3931 apply directly to a judicial foreclosure.⁹ And a bankruptcy filing trips the automatic stay under 11 U.S.C. § 362, freezing the foreclosure where it stands.¹⁰

Section 3 — The procedural sequence

A. Lien establishment and priority

Both chapters attach the lien automatically the day an assessment comes due, and both perfect it through the recorded declaration — the condominium lien under § 33-1256(A) and (F), the planned-community lien under § 33-1807(A) and (F).^{1, 2} Neither requires a separate notice of lien to perfect, though associations often record a notice of claim of lien anyway, both for practical notice and because the governing documents may call for it.^{1, 2}

Each lien secures assessments plus authorized late charges, reasonable collection fees, and court-awarded attorney fees. Fines and penalties stay out of both chapters and cannot be foreclosed.^{1, 2, 7} And in both, § 33-1256(C) and § 33-1807(C) keep the lien junior to a recorded first mortgage or first deed of trust and to tax liens — which means an association foreclosure does not wipe out the first mortgage.^{1, 2}

B. Notice requirements, cure period, and minimum debt threshold

The threshold works as a timing gate, and it now sits at two different heights. An association cannot file until a condominium owner runs one year delinquent or owes $1,200 in assessments under § 33-1256(A), or until a planned-community owner runs 18 months delinquent or owes $10,000 under § 33-1807(A), as SB1494 amended it.^{1, 2, 3} Managers should watch only the qualifying balance of regular assessments, because both statutes leave late charges, collection fees, attorney fees, and other extras out of the threshold math, and both require that any payment land on assessments first, under § 33-1256(K) and § 33-1807(K).^{1, 2}

There is a notice the association cannot skip. Before it hands an account to an attorney or an outside collector, both chapters require a written warning sent by certified mail at least 30 days ahead, set in boldface or all capital letters, telling the owner that collection could include foreclosure, under § 33-1256(L) and § 33-1807(L).^{1, 2} Both boards also have to make a reasonable effort to reach the owner and offer a reasonable payment plan before filing.^{1, 2} And once a third-party collector or law firm steps in, the FDCPA’s validation-notice rules apply on top.⁸

C. Foreclosure sale procedure

The sale itself follows one path for both condominiums and planned communities. The association files a judicial foreclosure complaint in Superior Court under § 33-1256, § 33-1807, and § 33-721, serves the owner and the junior lienholders, and, once it has a judgment and decree, sells the property at a sheriff’s sale. There is no trustee’s-sale option for an association lien.^{1, 2, 4} The decree can award costs and reasonable attorney fees to the prevailing party in either chapter,^{1, 2} and the association may credit bid its judgment amount at the sale.

When a servicemember owns the unit, the judicial route absorbs the extra protections without trouble: SCRA § 3953 requires a court order before sale, and § 3931 governs default judgments.⁹ What an association cannot do is borrow the lender’s machinery. The deed-of-trust trustee’s-sale framework of Ariz. Rev. Stat. § 33-807 et seq. — including the recorded notice of trustee’s sale and the rule that the sale date “shall be no sooner than the ninety-first day after the date that the notice of sale was recorded” under § 33-808(C) — belongs to a lender’s deed-of-trust foreclosure, not to the association’s lien foreclosure.^{6, 11}

D. Post-sale rights

After a judicial foreclosure, both condominium and planned-community owners hold a statutory right of redemption under Ariz. Rev. Stat. § 12-1282. The judgment debtor “may redeem at any time within six months after the date of the sale” under § 12-1282(B) — though that window collapses to “thirty days after the date of the sale” when the court has found, as part of the judgment, that the property was “both abandoned and not used primarily for agricultural or grazing purposes” under § 12-1282(A).⁵ The no-redemption rule of § 33-811(E) does not enter the picture, because it governs non-judicial trustee’s sales, not judicial ones.⁶

Money left over follows priority. Surplus or excess proceeds from a junior association foreclosure go, under Ariz. Rev. Stat. § 33-727(B), first to junior lienholders in order of priority and then to the owner; senior lienholders take none of the surplus, because their liens survive the sale.^{12, 13} Arizona’s anti-deficiency statutes — § 33-729 for judicial foreclosure and § 33-814(G) for trustee’s sales — are written for purchase-money mortgages and deeds of trust on qualifying one- or two-family dwellings of 2.5 acres or less. By their terms they do not shield an owner from an association collecting an assessment deficiency, since an association common expense lien is neither a purchase-money mortgage nor enforced by trustee’s sale, though direct Arizona authority applying these statutes to association liens is thin.^{14, 15} An owner who loses the property and does not redeem is removed through a forcible entry and detainer action.⁵

Section 4 — Recent legislative and judicial activity

A. Recent bills

Arizona’s recent activity in this area points in one direction: lawmakers have been narrowing when an association can foreclose, not widening it. Two bills tell the story.

B. Recent appellate rulings

Arizona’s appellate courts have been working out who collects what after an association sale — and who gets to redeem.

The controlling published authority on surplus still belongs to Tortosa Homeowners Association v. Garcia (Division Two, August 1, 2022). There the court held that senior lienholders take nothing from the excess proceeds of a junior association foreclosure, because their liens survive the sale — the surplus moves to junior lienholders by priority and then to the owner.¹² On redemption, Bank of New York Mellon Trust Co. v. Arizona HOA Acceptance LLC (Division One, March 17, 2016) confirmed that the holder of an association assessment lien may itself redeem residential property after a judicial foreclosure sale under Ariz. Rev. Stat. § 12-1283(B).¹⁷

C. Active legislative debates

Step back and the through-line is clear. Across the 2024 and 2025 sessions, the Legislature kept narrowing association foreclosure power — HB2648 restructured the lien, SB1494 raised the planned-community threshold — and association counsel expect more proposals aimed at restricting foreclosure of assessment liens.^{3, 7}

Section 5 — National positioning and related coverage

Put Arizona next to other states and it lands firmly on the creditor-restrained end. On priority, it grants no super-priority at all — both association liens stay junior to a first mortgage. Compare that to the District of Columbia, where D.C. Code § 42-1903.13 makes the condominium lien prior “to the extent of the common expense assessments…which would have become due in the absence of acceleration during the 6 months immediately preceding institution of an action to enforce the lien,” as the court recognized in Chase Plaza Condominium Ass’n v. JPMorgan Chase Bank; to Nevada, whose nine-month super-priority under Nev. Rev. Stat. § 116.3116 covers assessments “which would have become due in the absence of acceleration during the 9 months immediately preceding” the notice of default; and to Alaska, with its UCIOA-based six-month super-priority.^{1, 2, 18, 19, 20}

On how much an owner must owe, Arizona stands out for setting two floors instead of one: a $1,200/12-month condominium threshold under § 33-1256 and a $10,000/18-month planned-community threshold under § 33-1807. That planned-community figure now runs well above California’s rule under Cal. Civ. Code § 5720, which blocks foreclosure of “delinquent regular or special assessments of an amount less than one thousand eight hundred dollars ($1,800)” unless the owner is more than 12 months behind — while states such as Alabama and Arkansas set no statutory threshold at all.^{1, 2, 21}

On method, Arizona requires judicial foreclosure of association liens, unlike states that allow a non-judicial association foreclosure, such as Nevada and Texas.⁴ On redemption, Arizona’s six-month post-sale window after a judicial sale stands against the no-redemption finality of a deed-of-trust trustee’s sale.⁵ For a multi-state operator, Arizona files in the column of slow, court-supervised, high-threshold, mortgage-subordinate states — the places where foreclosure is a last resort, not a routine collection lever.

So if you manage Arizona portfolios, treat assessment foreclosure as the final stage of a long collection runway. Lead with payment plans, money judgments, and accurate threshold tracking, because the judicial process, the higher planned-community threshold, and the mortgage’s senior position together make foreclosure both slow and, often, not worth the cost.

Footnotes

1. Ariz. Rev. Stat. § 33-1256 (Common expense liens; priority; mechanics’ and materialmen’s liens; notice; applicability) ↩
2. Ariz. Rev. Stat. § 33-1807 (Common expense liens; priority; mechanics’ and materialmen’s liens; notice) ↩
3. S.B. 1494, 57th Leg., 1st Reg. Sess., ch. 71, 2025 Ariz. Sess. Laws (amending Ariz. Rev. Stat. § 33-1807) ↩
4. Ariz. Rev. Stat. § 33-721 (Foreclosure of mortgage by court action) ↩
5. Ariz. Rev. Stat. § 12-1282 (Time for redemption) ↩
6. Ariz. Rev. Stat. § 33-811 (Payment of bid; trustee’s deed; reinstatement) ↩
7. H.B. 2648, 56th Leg., 2d Reg. Sess., ch. 151, 2024 Ariz. Sess. Laws (amending Ariz. Rev. Stat. §§ 33-1202, 33-1256, 33-1802, 33-1807) ↩
8. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
9. 50 U.S.C. § 3953 (Servicemembers Civil Relief Act, mortgages and trust deeds) ↩
10. 11 U.S.C. § 362 (Automatic stay) ↩
11. Ariz. Rev. Stat. § 33-808 (Notice of trustee’s sale) ↩
12. Tortosa Homeowners Ass’n v. Garcia, No. 2 CA-CV 2021-0114 (Ariz. Ct. App. Aug. 1, 2022) ↩
13. Ariz. Rev. Stat. § 33-727 (Sale under execution; deficiency; order of liens; writ of possession) ↩
14. Ariz. Rev. Stat. § 33-729 (Purchase money mortgage; limitation on liability) ↩
15. Ariz. Rev. Stat. § 33-814 (Action to recover balance after sale or foreclosure on property under trust deed) ↩
16. Macias v. Maricopoly, LLC, No. 1 CA-CV 23-0624 (Ariz. Ct. App. June 4, 2024) (mem. decision) ↩
17. Bank of New York Mellon Trust Co. v. Arizona HOA Acceptance LLC, No. 1 CA-CV 14-0836 (Ariz. Ct. App. Mar. 17, 2016) ↩
18. D.C. Code § 42-1903.13 (Lien for assessments against units; priority; recordation) ↩
19. Nev. Rev. Stat. § 116.3116 (Liens against units for assessments) ↩
20. Colo. Rev. Stat. § 38-33.3-316 (Lien for assessments) ↩
21. Cal. Civ. Code § 5720 (Assessment collection through foreclosure) ↩