Bill Amendment: AZ HB2617 | 2021 | Fifty-fifth Legislature 1st Regular
Bill Title: Judgments; liens; homestead
Status: 2021-05-19 - Chapter 368 [HB2617 Detail]
Download: Arizona-2021-HB2617-SENATE_-_Finance.html
Fifty-fifth Legislature Finance
First Regular Session H.B. 2617
COMMITTEE ON FINANCE
SENATE AMENDMENTS TO H.B. 2617
(Reference to House engrossed bill)
Page 1, line 38, strike "exemption of"; after "homestead" insert "; partial release of judgment lien"
Line 39, after "creditor" insert "; applicability; definition"
Page 2, strike lines 8 through 14, insert:
"b. On the sale of homestead property that is subject to a judgment lien, the judgment creditor shall be paid from the proceeds of the sale after the homestead exemption amount is paid to the judgment debtor as prescribed in section 33-1101 and after payment of any liens on the property that have priority over the judgment lien. if the gross proceeds of the sale of the homestead property, which represent the sales price of the property, do not exceed the amount of the homestead exemption prescribed by section 33-1101, a title insurer may record a notice of partial release of the judgment lien for that homestead property without prior notice. if the gross proceeds of the sale exceed the amount of the homestead exemption prescribed by section 33-1101 but are insufficient to pay all liens on the real property that have priority over the judgment creditor's lien, the judgment creditor's lien on the homestead property is extinguished on compliance with the following:
1. at least twenty days before the SALE is final, a title insurer mails to the judgment CREDITOR by certified mail, postage prepaid, return receipt requested, a notice that the judgment lien appears reasonably likely to be extinguished as prescribed by this subsection. The notice must contain all of the following:
(a) the judgment creditor's name.
(b) the name of the current record owner of the real property.
(c) the street address for the property.
(d) the recording reference for the judgment.
(e) the expected sale date ON WHICH title to the real property will transfer to the buyer.
(f) the title insurer's basis for DETERMINING that the homestead exemption PRESCRIBED BY section 33-1101 applies to the property being sold.
(g) the information used in, the basis for and the date of calculating the amount of equity in the real property.
(h) the name of every lienholder to be paid at the sale of the real property.
(i) the amount paid to each lienholder at the sale of the real property.
(j) the title insurer's basis for DETERMINING that the prior lienholder should be paid before the judgment creditor.
2. if the judgment creditor has good cause to believe that the judgment lien should not be extinguished, The judgment creditor MAY object to the title insurer's notice within TWENTY DAYS AFTER THE DATE THE NOTICE is mailed. If the title insurer receives an objection from the judgment creditor within the twenty-day period stating that the judgment lien should not be extinguished, the title insurer may not record the partial release of the judgment lien. If a court later determines that the judgment creditor's objection is invalid, the prevailing party in that action is entitled to a court order extinguishing the judgment lien on the homestead property and an award of actual damages, court costs and attorney fees.
3. If the title insurer does not receive an objection from the judgment creditor before the TWENTY-day period expires, the title insurer may prepare, sign and record a notice of partial release of the judgment lien. The notice of partial release of the judgment lien must specify the real property THAT IS no longer subject to the judgment lien and cite this subsection OF STATUTE. The person signing the notice of partial release of the JUDGMENT lien must be the title insurer's authorized agent.
4. The title insurer may charge a reasonable fee to the owner of the real property or any other person who requests a notice of partial release of the judgment lien under this subsection for services rendered, including TITLE SEARCH, document preparation, official fees and mailing costs.
5. A recorded notice of partial release of the judgment lien is conclusive evidence that the judgment lien on the specified property is extinguished in favor of purchasers and encumbrancers for value. The notice of partial release of the judgment lien does not AFFECT a judgment lien on any other real property.
6. Compliance with this subsection is not presumed, excused, released or altered by a recorded notice of partial release of a judgment lien.
7. In addition to any other remedy provided by law, a title insurer that prepares or records the notice of partial release of the judgment lien under this subsection is liable to any party for the actual damages, including attorney fees and court costs, THAT ARE caused by preparing or recording the notice of partial release of the judgment lien.
8. A judgment creditor may waive the notice requirement PRESCRIBED IN PARAGRAPH 1 OF THIS subsection if the waiver is in writing and signed by the judgment creditor's authorized agent.
C. If the judgment debtor seeks cash proceeds from refinancing the homestead property THAT IS subject to a judgment lien, the judgment creditor must be paid in full from those proceeds before the judgment debtor or other person receives any proceeds. In subsequent refinance transactionS ON the homestead property THAT IS subject to a judgment lien, the judgment lien is subordinated BY OPERATION OF LAW to the new lender's interest in the homestead property. A notice of subordination may be recorded by any person WHO IS A PARTY TO that refinance.
D. aNY PERSON WHO RECORDS A NOTICE OF RELEASE of a judgment lien AS PRESCRIBED BY THIS SECTION SHALL MAIL A COPY OF THE RECORDED NOTICE Of RELEASE TO THE JUDGMENT CREDITOR WHOSE JUDGMENT LIEN IS AFFECTED BY THAT RECORDED DOCUMENT."
Reletter to conform
Page 2, between lines 33 and 34, insert:
"G. For any sale, transfer or refinance of a judgment debtor's homestead PROPERTY that is completed before January 1, 2022, a judgment lien does not attach to the homestead property. For sales, transfers or REFINANCES that are completed on or after January 1, 2022, judgments that are recorded before January 1, 2022 and that are still valid attach to the homestead property, are enforceable and create judgment liens as prescribed by this section, and each judgment lien's PRIORITY is determined by the date the JUDGMENT lien is recorded as prescribed by section 33-961.
H. For the purposes of this section, "title insurer" has the same meaning prescribed in section 20-1562."
Page 2, line 37, after "homesteads" insert "; equity"
Page 3, line 20, after the period insert "The homestead exemption does not attach to the person's interest in identifiable cash proceeds from refinancing the homestead property."
Between lines 21 and 22, insert:
"D. For purposes of determining the amount of equity in a homestead property that is sold or for determining WHether the property owner is receiving cash back from refinancing the homestead property, the parties may rely on the valuation of the property in the final closing document DISCLOSURE that is used for that transaction."
Page 4, after line 9, insert:
"Sec. 5.
Sections 12-1551, 33-964, 33-1101 and 33-1103, Arizona Revised Statutes, as amended by this act, are effective from and after December 31, 2021."
Amend title to conform
