What is the Homestead Law in Arizona?
Full Question:
Answer:
A homestead exemption in AZ can protect up to $150,000 of value in a debtor's home, the exemption doesn't apply to a security interest created through voluntary contract, like a mortgage, or to mechanics liens or child support obligations. Please see the following AZ statutes:
33-1101. Homestead exemptions; persons entitled to hold homesteads
A. Any person the age of eighteen or over, married or single, who
resides within the state may hold as a homestead exempt from attachment,
execution and forced sale, not exceeding one hundred fifty thousand dollars
in value, any one of the following:
1. The person's interest in real property in one compact body upon which
exists a dwelling house in which the person resides.
2. The person's interest in one condominium or cooperative in which the
person resides.
3. A mobile home in which the person resides.
4. A mobile home in which the person resides plus the land upon which
that mobile home is located.
B. Only one homestead exemption may be held by a married couple or a
single person under this section. The value as specified in this section
refers to the equity of a single person or married couple. If a married
couple lived together in a dwelling house, a condominium or cooperative,
a mobile home or a mobile home plus land on which the mobile home is
located and are then divorced, the total exemption allowed for that
residence to either or both persons shall not exceed one hundred fifty
thousand dollars in value.
C. The homestead exemption, not exceeding the value provided for in
subsection A, automatically attaches to the person's interest in
identifiable cash proceeds from the voluntary or involuntary sale of the
property. The homestead exemption in identifiable cash proceeds continues
for eighteen months after the date of the sale of the property or until the
person establishes a new homestead with the proceeds, whichever period is
shorter. Only one homestead exemption at a time may be held by a person
under this section.
33-1102. Exemption by operation of law; designation of multiple properties
on creditor's request; recording
A. A person who is entitled to a homestead exemption as prescribed by
section 33-1101 holds that exemption by operation of law and no written
claim or recording is required. If a person has more than one property
interest to which a homestead exemption may reasonably apply, a creditor
may require the person to designate which property, if any, is protected by
the homestead exemption. The creditor shall demand the designation by
sending a letter by certified mail, return receipt requested, to each
address of the person which may reasonably be protected by the homestead
exemption. The person shall designate the property by recording a homestead
exemption in the office of the county recorder where the property is
located or by sending the creditor a certified letter, return receipt
requested, within thirty days of receiving the creditor's demand letter. If
the person receives the creditor's letter and fails to respond as provided
by this subsection, the person may only assert the homestead exemption by
recording a claim in the office of the county recorder where the property
is located.
B. If the person is married, the homestead may be selected from the
community property, the joint property or the separate property of the
person.
33-1103. Effective date of homestead exemption; extent of exemption;
exceptions
A. The homestead provided for in section 33-1101, subsection A is exempt
from process and from sale under a judgment or lien, except:
1. A consensual lien, including a mortgage or deed of trust, or contract
of conveyance.
2. A lien for labor or materials claimed pursuant to section 33-981.
3. A lien for child support arrearages or spousal maintenance arrearages.
An award of court ordered support is not a lien for the purposes of this
paragraph unless one of the following applies:
(a) An arrearage has been reduced to judgment.
(b) A lien exists pursuant to section 25-516.
(c) The court orders a specific security interest of the property for
support.
4. To the extent that a judgment or other lien may be satisfied from
the equity of the debtor exceeding the homestead exemption under
section 33-1101.
B. A sale as described in subsection A of this section and not excepted
by subsection A, paragraph 1, 2, 3 or 4 of this section is invalid and does
not convey an interest in the homestead, whether made under a judgment
existing before or after the homestead is established.
C. In a contempt proceeding brought to enforce payment of any form of
child support or spousal maintenance, the court may consider the portion of
property claimed as exempt pursuant to section 33-1101, subsection A, as a
resource from which an obligor has the ability to pay.
33-1104. Abandonment of homestead; encumbrance of homestead
A. A homestead may be abandoned by any of the following:
1. A declaration of abandonment or waiver.
2. A transfer of the homestead property by deed of conveyance or contract
for conveyance.
3. A permanent removal of the claimant from the residence or the state. A
claimant may remove from the homestead for up to two years without an
abandonment or a waiver of the exemption.
B. A declaration of abandonment or waiver shall be executed by the
claimant and acknowledged. A declaration of abandonment or waiver is
effective only from the time of its recording in the office of the county
recorder in the county in which the homestead property is located.
C. This article shall not be construed to repeal the provisions of
section 25-214, subsection C, pertaining to the acquisition, conveyance or
encumbrance of community property.
D. Any recorded consensual lien, including a mortgage or deed of trust,
encumbering homestead property shall not be subject to or affected by the
homestead claim or exemption.
E. Notwithstanding the provisions of subsection A, paragraph 2 of this
section, a transfer of the homestead property by deed of conveyance or
contract for conveyance under a trust, as defined in section 14-1201, in
which the claimant retains the power to administer and revoke the trust
shall not constitute an abandonment of the homestead.
33-1105. Sale by judgment creditor of property subject to homestead
exemption
A judgment creditor other than a mortgagee or beneficiary under a trust
deed may elect to sell by judicial sale as specified in title 12 the
property in which the judgment debtor has a homestead under section 33-1101,
subsection A, provided that the judgment debtor's interest in the
property shall exceed the sum of the judgment debtor's homestead plus the
amount of any consensual liens on the property having priority to the
judgment. A bid shall not be accepted by the officer in charge of a sale
under this section which does not exceed the amount of the judgment
debtor's homestead plus the amount of any consensual liens on the
property having a priority to the judgment plus the costs of the sale
allowable under title 12. After receipt of a sufficient bid, the officer
shall sell the property. From the proceeds, the officer shall first pay
the amount of the homestead to the judgment debtor plus the amount of any
consensual liens on the property having a priority to the judgment and
then pay the costs of the sale. The remaining proceeds shall be applied
in accordance with the provisions of section 12-1562, subsection A. If
the sale does not occur, either because of voluntary abandonment by the
judgment creditor or because no sufficient bid is made, the judgment
creditor may not charge any costs or attorney fees incurred in connection
with the sale against the judgment debtor by addition to the judgment or
otherwise.
