There are many reasons that a lien may be recorded on a property you own. A subcontractor may not have been paid by the contractor and filed a lien on the property. You may have neglected to pay your homeowners’ association dues and the HOA files a lien. You may even be in the process of selling your home and discover a lien you never knew about.
For whatever reason a lien has been recorded on your property, there are some options to remove it under Arizona law. Whether the lien was recorded in error, was not removed when the debt was paid, or is in dispute, the options to clear title to a property in Arizona are typically through a quiet title action or a special action under A.R.S. § 33-420.
Removal of Wrongful Lien. Under Arizona law, anyone recording a wrongful lien is liable for paying the property owner $5,000 or triple the actual damages, plus attorneys’ fees. You should first determine that the lien filed was done so in error or fraudulently and then consult with an Arizona real estate attorney to assist you with the removal.
Removal by Quiet Title. A quiet title action seeks the removal of a lien in order to clear your title. If it is successful, the lienholder is barred from ever again asserting an adverse interest. However, before you file suit, you may want to have your real estate attorney send a demand letter first since Arizona law allows a defendant in a quiet title action to recover costs from the plaintiff if the defendant acknowledges that the lien is in error and disclaims their interest. If the demand letter goes unanswered for 20 days, then the lienholder would not be able to recoup their costs to defend their lien.
Filing Suit. You also have the option of filing a lawsuit against the individual that filed the lien. After the complaint is filed, the clerk will issue a summons to the defendant, who must show cause within 20 days why the lien should not be vacated or enforced by action. If the defendant does not foreclose on the lien within 20 days from service, the court typically discharges it.
You should consult with an experienced real estate attorney, who can help you determine what is the best option for you in contesting a claim of lien in Arizona.
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