Arizona has enacted SB 1494, modifying the rules on when HOAs can foreclose on liens for unpaid assessments. Though not a controversial bill, it carries important implications for property owners in HOAs.
What Changed:
- Foreclosure Threshold Increased:
- Old Rule: HOAs could foreclose if an owner owed $1,200 or had been delinquent for over 12 months.
- New Rule: The threshold has risen to $10,000 or 18 months of delinquency—whichever comes first.
What This Means for Investors:
- More Flexibility: Owners now have more time to resolve delinquencies before risking foreclosure.
- Lower Foreclosure Risk: Especially helpful during vacancies or unexpected repair costs.
- Stability for SFR Owners in HOAs: Allows more breathing room for landlords managing cash flow.
Legislative Background:
- SB 1494 passed overwhelmingly in both chambers:
- House: 57-3
- Senate: 27-3
- Took effect immediately, not the usual 90 days post-session.