Arizona HOA Liens and Foreclosure: What the Law Allows

How the HOA assessment lien works

Under A.R.S. § 33-1807, the association has a lien on a home for assessments levied against it, starting when each assessment becomes due. Recording the declaration perfects the lien, so the association does not have to record a separate notice. The lien generally has priority over other liens except those recorded before the declaration, recorded first mortgages or first deeds of trust, and real estate taxes and governmental assessments. The lien is extinguished unless enforcement begins within six years after the full assessment becomes due. Condominiums follow A.R.S. § 33-1256.

Required steps before collection and foreclosure

• 30-day certified notice: before referring a delinquency to an attorney or outside collection agency, the association must send a written notice by certified mail, return receipt requested, at least 30 days in advance. The notice must be in bold or all caps and include contact information.
• Payment plan: before filing a foreclosure, the board must make reasonable efforts to communicate with the owner and offer a reasonable payment plan.
• Foreclosure threshold: foreclosure is allowed only if the owner is delinquent for 18 months or owes $10,000 or more, whichever occurs first, measured when the action is filed. For special assessments of $10,000 or more, only the 18-month test applies.
• Payoff statements: on written request, the association must provide a statement of unpaid amounts within 10 days. Statements given to an escrow agency are binding on the association.

Unless the owner directs otherwise, payments are applied first to unpaid assessments, then to current assessments, then to late charges, collection costs and attorney fees awarded by a court.

What this means for HOA boards

A clear, board-adopted collections policy protects the budget and treats every owner the same. It should spell out reminder timing, late charges permitted by § 33-1803 (the greater of $15 or 10% of the unpaid assessment), the certified-mail notice, payment plan terms, and when an account goes to counsel. Foreclosure is a last resort and requires a board decision with legal advice. Healthy collections also support realistic budgeting.

What this means for homeowners

If you fall behind, contact management early. Payment plans are often available, and acting before an account goes to an attorney avoids added costs. Our late payments and payment plans guide explains options, and setting up autopay helps prevent missed due dates.

How Transcend applies lien and collection law

Through our HOA collections service, Transcend sends timely statements and late notices, tracks the certified 30-day notice before any referral, offers board-approved payment plans, and works with the association’s collection attorney only when the board directs. Homeowners can see balances and pay any time in the portal or ask Bruno, our AI concierge, to text or email an account statement 24/7. The board receives delinquency reports with every monthly financial package.

A typical Arizona HOA collection timeline

Every association’s adopted policy controls its own steps, but a common sequence looks like this:

1. Due date: the assessment is due as stated in the declaration or billing schedule.
2. Grace period: no late charge until at least 15 days after the due date under A.R.S. § 33-1803, unless the documents allow longer.
3. Reminder and late notice: the owner receives a statement or reminder, then a notice that the assessment is overdue before any late charge is applied.
4. Certified 30-day notice: if the account remains delinquent, the association sends the certified-mail notice required before referral to an attorney or collection agency.
5. Payment plan offer: the board offers a reasonable plan, which resolves many accounts.
6. Attorney referral: only by board direction, under the adopted policy.
7. Legal action: a lawsuit for a money judgment or, only if the 18-month or $10,000 threshold is met, foreclosure of the lien.

Snowbirds and out-of-state landlords sometimes fall behind simply because statements went to an old address. Making sure every owner’s mailing and email address is current is one of the cheapest collection tools there is; owners can update their account information in writing through the portal.

Quick checklist for boards reviewing delinquencies

• Review the aging report at every board meeting.
• Confirm the certified 30-day notice went out before any referral.
• Document that a reasonable payment plan was offered.
• Check the foreclosure threshold with counsel before authorizing any lien foreclosure.
• Record every collection decision in the minutes, with personal details kept in executive session.

Disclaimer

This is general information, not legal advice. Arizona statutes are amended often, and how a law applies to your community depends on your declaration (CC&Rs), bylaws, rules and the specific facts. Your governing documents and an Arizona HOA attorney control. Before acting on a legal question, confirm the current statute text on azleg.gov and talk with your association’s counsel.

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