Bill Text: AZ HB2430 | 2011 | Fiftieth Legislature 1st Regular | Introduced
Bill Title: Foreclosures; right to rent
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-02-07 - Referred to House COM Committee [HB2430 Detail]
Download: Arizona-2011-HB2430-Introduced.html
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REFERENCE TITLE: foreclosures; right to rent |
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State of Arizona House of Representatives Fiftieth Legislature First Regular Session 2011
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HB 2430 |
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Introduced by Representatives Tovar, Miranda R
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AN ACT
amending section 33-807, Arizona Revised Statutes; amending title 33, chapter 6.1, article 1, Arizona Revised Statutes, by adding sections 33-807.02 and 33-807.03; relating to deeds of trust.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 33-807, Arizona Revised Statutes, is amended to read:
33-807. Sale of trust property; power of trustee; foreclosure of trust deed
A. By virtue of his the trustee's position, a power of sale is conferred upon the trustee of a trust deed under which the trust property may be sold, in the manner provided in this chapter, after a breach or default in performance of the contract or contracts, for which the trust property is conveyed as security, or a breach or default of the trust deed. At the option of the beneficiary, a trust deed may be foreclosed in the manner provided by law for the foreclosure of mortgages on real property in which event chapter 6 of this title governs the proceedings. The beneficiary or trustee shall constitute the proper and complete party plaintiff in any action to foreclose a deed of trust. The power of sale may be exercised by the trustee without express provision therefor in the trust deed.
B. The trustee or beneficiary may file and maintain an action to foreclose a deed of trust at any time before the trust property has been sold under the power of sale. A sale of trust property under the power of sale shall not be held after an action to foreclose the deed of trust has been filed unless the foreclosure action has been dismissed.
C. The trustee or beneficiary may file an action for the appointment of a receiver according to sections 12‑1241 and 33‑702. The right to appointment of a receiver shall be independent of and may precede the exercise of any other right or remedy.
D. Except for certain owner‑occupied residential property as provided in section 33-807.02, the power of sale of trust property conferred upon the trustee shall not be exercised before the ninety‑first day after the date of the recording of the notice of the sale. The sale shall not be set for a Saturday or legal holiday. The trustee may schedule more than one sale for the same date, time and place.
E. For certain owner‑occupied residential property, the power of sale of trust property conferred on the trustee shall not be exercised until after compliance with sections 33-807.02 and 33-807.03.
E. F. The trustee need only be joined as a party in legal actions pertaining to a breach of the trustee's obligation under this chapter or under the deed of trust. Any order of the court entered against the beneficiary is binding upon the trustee with respect to any actions that the trustee is authorized to take by the trust deed or by this chapter. If the trustee is joined as a party in any other action, the trustee is entitled to be immediately dismissed and to recover costs and reasonable attorney fees from the person joining the trustee.
Sec. 2. Title 33, chapter 6.1, article 1, Arizona Revised Statutes, is amended by adding sections 33-807.02 and 33-807.03, to read:
33-807.02. Limits on foreclosure; right to rent foreclosure property; applicability
A. A beneficiary or trustee under a trust deed shall not exercise the power of sale until after the beneficiary has provided notice in substantially the following form to the trustor who is in default:
Official notice to trustor (borrower)
You are in default on your mortgage or deed of trust, and foreclosure may begin against your property. State law gives you the right to continue to occupy the property as a renter until _ _ (date)______ if you do all of the following:
1. Notify the lender-beneficiary before _____ (date) ___ that you intend to exercise your right to rent.
2. Make timely monthly rental payments in an amount determined by the justice of the peace court listed below.
3. Continue to use the property as your primary residence.
If you wish to occupy your property as a renter, you must give written notice to the lender-beneficiary and to the justice of the peace court precinct that has jurisdiction over your property for purposes of any landlord and tenant issue. That justice of the peace precinct is (name)___________, located at _ _ _ (address and telephone number)________.
B. A beneficiary shall include on the notice the name, address and telephone number of the justice of the peace precinct that would have jurisdiction over the trust property for purposes of any residential landlord and tenant action, and shall specify the due date for the receipt of notice from the trustor, which shall be at least thirty days after the date the notice is mailed or posted, whichever occurs later. The notice shall be delivered by first class mail to the trustor at the trustor's mailing address and shall also be posted prominently on the front door of the trust property.
C. The beneficiary and the trustee may not exercise the power of sale on the trust property for at least one year after the date the trustor properly notifies the beneficiary that the trustor wishes to occupy the property as a renter, and a month-to-month periodic tenancy between the beneficiary and trustor exists if all of the following occur:
1. The trustor timely pays monthly rent in the amount determined by the justice court pursuant to section 33-807.03.
2. The trustor continues to occupy the premises as the trustor's principal residence.
3. The trustor does not engage in a material noncompliance with the tenant's obligations under chapter 10 of this title. The trustor may terminate the month-to-month tenancy by giving one month's notice to the beneficiary-landlord as provided in chapter 10 of this title.
D. On completion of the one-year period for which the trustor may be a renter of the trust property, the beneficiary or trustee may exercise the power of sale on the trust property as otherwise provided by law. If the beneficiary or trustee does not exercise the power of sale, the trustor may continue to rent as a month-to-month tenant.
E. This section and section 33-807.03 apply to real property that complies with all of the following:
1. The property is a single one-family or two-family dwelling, including a unit in a condominium as defined in chapter 9 of this title and a unit in a planned community as defined in chapter 16 of this title.
2. The property is used as the principal residence of the trustor for at least two years before default.
3. The deed of trust on the property secures a purchase price that is less than the median purchase price for residences that are located in the same metropolitan statistical area for that residence, or if not in a metropolitan statistical area, for this state. The median price shall be determined based on the generally accepted statistical measures used by the real estate industry for that area or for this state.
4. The deed of trust was executed before July 1, 2007.END_STATUTE
33-807.03. Determination of rent; justice court proceeding; fair market value
A. On receipt of written notice from a trustor pursuant to section 33‑807.02 that the trustor wishes to occupy the trust property as a renter, the justice of the peace court for the precinct in which the trust property is located shall deem the notice the initiation of a justice court action for a determination of fair market rental value for the trust property, with the trustor as the plaintiff and the beneficiary as the defendant in the action. Written notice to the beneficiary as prescribed in section 33‑807.02 constitutes service of process for purposes of the action to determine fair market rental value, and a hearing shall be scheduled.
B. The justice court shall appoint a person who is licensed in this state as a residential real estate appraiser pursuant to title 32, chapter 36 to present evidence of the fair market rental value of the property at a hearing called for that purpose. On completion of the hearing, the court shall determine the fair market rental value, which constitutes the amount of monthly rent due from the trustor to the beneficiary under the month-to-month rental agreement prescribed by section 33-807.02.
C. No earlier than one year after the issuance of the court's fair market rental value determination, the beneficiary of the trust property or the trustor of the trust property may file a request for a redetermination of fair market rental to reflect changed market conditions. The court shall hold a hearing on fair market rental value if the party requesting the hearing pays the costs for the appraiser.
