Bill Text: AZ SB1431 | 2024 | Fifty-sixth Legislature 2nd Regular | Introduced
Bill Title: Right to redeem; foreclosure; sale
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2024-04-23 - Chapter 176 [SB1431 Detail]
Download: Arizona-2024-SB1431-Introduced.html
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REFERENCE TITLE: right to redeem; foreclosure; sale |
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State of Arizona Senate Fifty-sixth Legislature Second Regular Session 2024
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SB 1431 |
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Introduced by Senator Mesnard
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An Act
amending sections 42-18152, 42-18204 and 42-18205, Arizona Revised Statutes; amending title 42, chapter 18, Arizona Revised Statutes, by adding article 6; relating to property tax.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 42-18152, Arizona Revised Statutes, is amended to read:
42-18152. When lien may be fully redeemed; partial payment refund
A. A real property tax lien may be fully redeemed at any time:
1. Within three years after the date of tax lien sale.
2. After three years but before the delivery of a treasurer's deed to the purchaser certificate of purchase holder or the purchaser's certificate of purchase holder's heirs or assigns or the sale of the property for excess proceeds pursuant to article 6 of this chapter.
B. A lien that has been partially redeemed under section 42-18056, subsection C must be fully redeemed before the delivery of a treasurer's deed to the purchaser.
C. The county treasurer shall refund all partial payment amounts impounded under section 42-18056, subsection E, to the person or persons or their heirs or assigns within thirty days after delivering the treasurer's deed to the purchaser or the sale of the property for excess proceeds pursuant to article 6 of this chapter. .
Sec. 2. Section 42-18204, Arizona Revised Statutes, is amended to read:
42-18204. Judgment foreclosing right to redeem; effect
A. In an action to foreclose the right to redeem: ,
1. If the court finds that the tax lein sale is valid, and that the tax lien has not been redeemed and the defendant's request for an excess proceeds sale is unreasonable or the defendant did not request an excess proceeds sale, the court shall enter judgment:
1. (a) Foreclosing the right of the defendant to redeem.
2. (b) Directing the county treasurer to expeditiously execute and deliver to the party in whose favor judgment is entered, including the state, a deed conveying the property described in the certificate of purchase.
2. If the court finds that the tax lien sale is valid, the tax lien has not been redeemed and the defendant's request for an excess proceeds sale is reasonable, the court shall enter judgment:
(a) Foreclosing the right of the defendant to redeem.
(b) Directing the sale of the property pursuant to article 6 of this chapter.
(c) setting the opening bid for the property as the total of the amounts described in subsection B, paragraph 1 OF THIS SECTION.
B. A property owner whose right to redeem is being foreclosed may request the court to determine if the sale of the property to recover excess proceeds is reasonable. The court shall determine that the sale of the property for excess proceeds is reasonable if the sale price of the property is likely to be more than a de minimis amount above the total of the amounts described in paragraph 1 of this subsection. If a request is made for an excess proceeds sale, the following information shall be provided to the court for the purposes of determining if an excess proceeds sale is reasonable:
1. The certificate of purchase holder shall provide all of the following:
(a) The costs related to filing the claim to foreclose the right to redeem, including estimated attorney fees and costs to be incurred through the date of the excess proceeds sale, if ordered.
(b) The amount for which the real property tax lien was sold, with interest at a rate of sixteen percent per annum from the date of the tax lien sale through the date of the excess proceeds sale, if ordered.
(c) The amount of any statutory fees the certificate of purchase holder paid in connection with the certificate of purchase, except the processing fee imposed by section 42-18116, subsection C, with interest at a rate of sixteen percent per annum from the date of the tax lien sale through the date of the excess proceeds sale, if ordered.
(d) The costs related to any title searches that the certificate of purchase holder incurred to comply with this subsection.
(e) An independent appraisal of the property.
(f) the amount of all other recorded liens or encumbrances on the property as indicated on a title report provided by the certificate of purchase holder, including other years in which taxes are delinquent. For the purposes of this subdivision, the certificate of purchase holder does not have to determine the actual balance owed on any lien or encumbrance on the property, except for property taxes owed.
(g) The estimated cost of the sale of property pursuant to article 6 of this chapter.
(h) Any other evidence relating to the value of the property or objecting to the excess proceeds sale that the certificate of purchase holder deems necessary.
2. The property owner whose right to redeem is being foreclosed shall provide a reasonable estimate of the market value of the property.
B. C. After entering judgment the parties whose rights to redeem the tax lien are thereby foreclosed have no further legal or equitable right, title or interest in the property subject to the right of appeal and stay of execution as in other civil actions.
C. D. The foreclosure of the right to redeem does not extinguish any of the following:
1. An easement on or appurtenant to the property.
D. The foreclosure of the right to redeem does not extinguish any
2. A lien for an assessment levied pursuant to title 48, chapter 4, 6, 14 or 18, or section 9-276. For the purposes of this paragraph, assessment does not include an abatement lien imposed under section 9-499.
3. If the court finds that the request for an excess proceeds sale is reasonable, the property owner's interest in the excess proceeds from the sale of the property pursuant to article 6 of this chapter.
Sec. 3. Section 42-18205, Arizona Revised Statutes, is amended to read:
42-18205. County treasurer's deed; form
A. On receiving a certified copy of a judgment foreclosing the right to redeem issued pursuant to section 42-18204, subsection A, paragraph 1 and a fee of fifty dollars $50 per parcel, the county treasurer shall execute and deliver to the party in whose favor the judgment was entered a deed conveying the property described in the judgment.
B. The deed shall include the following information:
1. The date, court action number and name of the judgment.
2. The name of the purchaser.
3. The property description.
4. The date of the conveyance.
5. A formal acknowledgment by the treasurer.
Sec. 4. Title 42, chapter 18, Arizona Revised Statutes, is amended by adding article 6, to read:
ARTICLE 6. SALE OF PROPERTY FOR EXCESS PROCEEDS
42-18231. Definition of qualified entity
For the purposes of this article, "qualified entity" means an association or corporation doing business in this state as a bank pursuant to title 6, chapter 2, credit union pursuant to title 6, chapter 4, consumer lender pursuant to title 6, chapter 5, escrow agent pursuant to title 6, chapter 7, insurance company pursuant to title 20 or law firm.
42-18232. Notice of sale
A. The qualified entity conducting the sale of the property shall provide notice of the time and place of the sale, a description of the property to be sold and the amount of the opening bid by each of the following methods:
1. Recording a notice in the office of the recorder of each county where the property is situated.
2. Posting a copy of the notice of sale in a conspicuous place on the property to be sold at least twenty days before the sale. If access to the property is denied because a common entrance to the property is restricted by a limited access gate or similar impediment, the notice shall be posted at that gate or impediment.
3. Posting at one of the places provided for posting public notices at any building that serves as a location of the superior court in the county where the property is to be sold.
4. Publishing the notice of sale in a newspaper of general circulation in the county in which the property to be sold is situated. The notice of sale shall be published at least once a week for four consecutive weeks. The last date of publication MAY not be less than ten days before the date of sale. The newspaper that publishes the notice shall also post the notice on a website that posts the legal notices of ten or more Arizona newspapers.
5. Certified mail to all of the following:
(a) The property owners notified pursuant to section 42-18202.
(b) Any lienholder of record that has recorded a lien against the property if an address appears on the recorded lien.
(c) Any mortgagee of record if an address appears on the recorded mortgage.
(d) Any vendee of a recorded contract for deed if an address appears on the recorded contract.
(e) Any person to whom the property was assessed on the tax roll for the year in which the property was last assessed.
(f) Any lienholder of record that has recorded a lien against a mobile home that is located on the property to the address as it appears on the recorded lien.
(g) Any legal titleholder of record of property that is contiguous to the property described in the certificate of purchase if the property described is submerged land or common elements of a subdivision and if the address of the titleholder of the contiguous property appears on the record of conveyance of the PROPERTY to the legal titleholder. For the purposes of this subdivision, "contiguous":
(i) Means touching, meeting or joining at the surface or border, other than at a corner or a single point, and not separated by submerged lands.
(ii) Does not include submerged lands that lie below the ordinary high-water mark and that are sovereign lands.
6. Posting on a multiple listing service for at least thirty days before the date of the sale.
B. The notice of sale shall contain:
1. The date, time and place of the sale. The date, time and place shall be set pursuant to section 42-18233. The date may not be earlier than the sixtieth day after the date that the notice of sale was recorded.
2. The street address, if any, or identifiable location as well as the legal description of the property.
3. The county assessor's tax parcel number for the property.
4. The amount of the opening bid. The opening bid shall be set pursuant to section 42-18204.
5. The telephone number of the qualified entity conducting the sale.
C. The notice of sale is sufficient if made in substantially the following form:
Notice of Sale for Excess Proceeds
There are unpaid taxes on the property located at (address) that you may own or have a legal interest in or that may be contiguous to your property. The property will be sold at public auction at (Specific place of sale) on (date and time) and that sale will be final unless the outstanding taxes are paid. The opening bid at the public auction is (opening bid amount).
To make payment or to receive further information, contact the (county) county treasurer immediately at (address) or (Telephone number) or the (qualified entity) at (address) or (Telephone number).
___________(date)___________
______(acknowledgment)__ ___
Legal description of property to be sold:
(street address, if any, or identifiable
location of property)
(legal description of property)
(Tax parcel number)
D. Any error or omission in the information required by subsection B or C of this section, other than an error in the legal description of the property or an error in the date, time or place of sale, DOES not invalidate the sale. Any error in the legal description of the property DOES not invalidate the sale if, considered as a whole, the information provided is sufficient to identify the property being sold. If there is an error or omission in the legal description so that the property cannot be identified, or if there is an error in the date, time or place of sale, the qualified entity shall record a cancellation of notice of sale. The qualified entity or any person furnishing information to the qualified entity is not subject to liability for any error or omission in the information required by subsection B of this section except for the wilful and intentional failure to provide such information. This subsection does not apply to claims made by an insured under any policy of title insurance.
E. The notice of sale for excess proceeds may not be rerecorded for any reason. This subsection does not prohibit the recording of a new or subsequent notice of sale regarding the same property.
42-18233. Date and time of sale
The sale shall be held:
1. Not earlier than sixty days AFTER the date of a judgment entered pursuant to section 42-18204, subsection A, paragraph 2.
2. On a day other than a Saturday, SUNDAY or legal holiday.
3. Between 9:00 a.m. and 5:00 p.m. mountain standard time.
4. At a specified place on the property, at a specified place at any building that serves as a location of the superior court or at a specified place at a place of business of the qualified entity conducting the sale, in any county in which the property to be sold is situated.
42-18234. Sale by public auction; bidder requirements; postponement of sale
A. On the date and at the time and place designated in the notice of sale, the qualified entity shall offer to sell the property at public auction for cash to the highest bidder. The MINIMUM bid shall be the total of the amounts described in section 42-18204, subsection B, paragraph 1. The qualified entity may schedule more than one sale for the same date, time and place.
B. Any person, including the qualified entity or the certificate of purchase holder, may bid at the sale. Only the certificate of purchase holder may make a credit bid in lieu of cash at the sale. The qualified entity shall require every bidder to provide a nonrefundable deposit in an amount equal to ten percent of the opening bid or $2,500, whichever is greater, in any form that is satisfactory to the qualified entity as a condition of entering a bid.
C. The qualified entity or the qualified entity's auctioneer may control the means and manner of the auction, except the opening bid shall be an amount equal to the total of the amounts described in section 42-18204, subsection B, paragraph 1. Every bid shall be deemed an irrevocable offer until the sale is completed, except that a subsequent bid by the same bidder for a higher amount shall cancel that bidder's lower bid. The qualified entity shall return deposits to all but the bidder whose bid resulted in the highest bid price. The sale is deemed completed on payment by the purchaser of the price bid in a form satisfactory to the qualified entity.
D. The subsequent execution, delivery and recording of the qualified entity's deed as prescribed by section 42-18235 are ministerial acts. If the qualified entity's deed is recorded in the county in which the property is located within fifteen business days after the date of the sale, the sale is deemed perfected at the appointed date and time of the sale.
E. The qualified entity may postpone or continue the sale from time to time or change the place of the sale to any other location authorized pursuant to this chapter by giving notice of the new date, time and place by public declaration at the time and place last appointed for the sale. Any new sale date shall be a fixed date within sixty calendar days after the date of the declaration. After a sale has been postponed or continued, the qualified entity, on request, shall make available the date and time of the next scheduled sale and, if the location of the sale has been changed, the new location of the sale until the sale has been conducted or canceled and providing this information shall be without obligation or liability for the accuracy or completeness of the information. Other notice of the postponed, continued or relocated sale is not required.
F. A sale is postponed by operation of law to the next business day at the same scheduled time and place if an act of force majeure prevents access to the sale location for the conduct of the sale.
42-18235. Payment of bid; qualified entity's deed
A. The highest bidder at the sale, other than the judgment holder to the extent of the credit bid, shall pay the price bid by not later than 5:00 p.m. mountain standard time of the day after the sale, other than a Saturday, sunday or legal holiday. If the highest bidder fails to pay the amount bid for the property struck off to the bidder at the sale, the qualified entity, in the qualified entity's sole discretion, shall either continue the sale to reopen bidding or immediately offer the property to the second highest bidder who may purchase the property at that bidder's bid price. The deposit of the highest bidder who fails to pay the amount bid shall be applied to the costs of facilitating the sale and the balance, if any, and treated as additional sale proceeds to be distributed pursuant to section 42-18236, subsection A. If the second highest bidder does not pay that bidder's bid price by 5:00 p.m. mountain standard time of the next day, excluding Saturdays, sundays and legal holidays after the qualified entity offers the property to that bidder, the qualified entity shall either continue the sale to reopen bidding or offer the property to each of the prior bidders on successive days excluding Saturdays, sundays and legal holidays in order of their highest bid, until a bid price is paid, or if there is no other bidder, the sale shall be deemed to be continued to a time and place designated by the qualified entity, or if not designated, the sale shall be continued to the same place and at the same time twenty-eight days after the last scheduled sale date. If the twenty-eighth day is a Saturday, sunday or legal holiday, the sale shall be continued to the next business day. If the sale is continued, the qualified entity shall provide notice of the continuation of the sale by registered or certified mail, with postage prepaid, to all bidders who provide their names, addresses and telephone numbers in writing to the qualified entity. In addition to the forfeit of deposit, a highest bidder who fails to pay the amount bid by that bidder is liable to any person who suffers loss or expenses as a result, including attorney fees. In any subsequent sale of property, the qualified entity may refuse to accept any bid of that person. In any sale that is continued pursuant to this subsection, the qualified entity shall reject a bid from any previous bidder who elected not to pay that bidder's bid price.
B. The price bid shall be paid at the office of the qualified entity or the qualified entity's agent, or any other reasonable place designated by the qualified entity. The payment of the bid price may be made at a later time if agreed on in writing by the qualified entity. Within seven business days after receipt of payment by the qualified entity or the qualified entity's agent, made in a form that is satisfactory to the qualified entity, the qualified entity shall execute and submit the qualified entity's deed to the county recorder for recording and, on request, shall provide an unrecorded copy of the signed qualified entity's deed to the purchaser. The recording of the qualified entity's deed on sale constitutes delivery of the deed to the purchaser. The qualified entity is not liable for any damages resulting from the failure to record the deed on sale after physical delivery of the deed to the purchaser. The deed shall include the following information:
1. The date, court action number and name of the judgment ordering the sale of the property.
2. The name of the purchaser.
3. The property description.
4. The date of the conveyance.
5. A formal acknowledgment by the qualified entity.
C. All persons to whom the qualified entity mails a notice of a sale pursuant to section 42-18232 shall waive all defenses and objections to the sale not raised in an action that results in an injunction before the scheduled date of the sale. A copy of the injunction shall be delivered to the qualified entity within twenty-four hours after the order is entered.
D. A sale is not complete if the sale violates subsection C of this section because of an undisclosed order entered by the court within the time provided for in subsection C of this section. A sale held in violation of subsection C of this section shall be continued to a date, time and place announced by the qualified entity at the sale and shall comply with section 42-18234. If not announced, the sale shall be continued to the same place and at the same time twenty-eight days later. If the twenty-eighth day falls on a Saturday, sunday or legal holiday, the sale shall be continued to the next business day.
E. The deed conveyed pursuant to this section shall operate to convey to the purchaser title of the purchased property. That conveyance shall be absolute without right of redemption and clear of all subordinate liens, claims or interests.
42-18236. Disposition of proceeds of sale
A. The qualified entity shall distribute the proceeds of the sale as follows:
1. To the qualified entity, an amount equal to the cost of facilitating the sale of the property, including the costs providing the notice required by section 42-18232, subsection A.
2. To the certificate of purchase holder, an amount equal to the amounts provided in section 42-18204, subsection B, paragraph 1, subdivisions (a), (b), (c), (d) and (e).
3. To other lien or encumbrance holders, an amount equal to their respective lien or encumbrance as indicated on a title report provided by the certificate of purchase holder and provided to the court pursuant to 42-18024, subsection B, paragraph 1, subdivision (f).
4. To the property owner whose right to redeem was foreclosed, any remaining proceeds of the sale.
B. The qualified entity shall distribute the proceeds of the sale pursuant to subsection A of this section within ninety days after the sale of the property and notify the court that the distributions have been made. The qualified entity shall dispose of any monies unclaimed after ninety days pursuant to title 44, chapter 3. If the qualified entity fails to comply with this subsection, the qualified entity shall pay interest at the rate provided for judgments pursuant to section 44-1201 from the date of completion of the sale until the qualified entity complies with this subsection. Any party in the action to foreclose the right to redeem relating to the property may commence a civil action against the qualified entity for the qualified entity's failure to comply with this subsection. The court may award the prevailing party its reasonable attorney fees and costs incurred in that civil action.
Sec. 5. Applicability
This act applies to actions to foreclose the right to redeem filed pursuant to title 42, chapter 18, article 5, Arizona Revised Statutes, from and after the effective date of this act.
