Wednesday, 5th of August 2009 at 10:17:32 AMThis one bill has created a controversy within the Real Estate industry and I have to say that I’m not a supporter of this bill, but I understand it’s purpose, but still not a supporter.
A little Background on ARS 33-814
ARS 33-814 bascially states that a lender can not go after an owner that has their property foreclosed on if the property is on less than 2.5 acres and used as a single family home. This little statue has been used quite a bit recently to protect lots of people that are in over their head, including investors.
What is SB1271?
SB1271 is an amendment to ARS 33-814, in short it says that the owner has had to have “utilized” the property for 6 consecutive months to be included in the protection of ARS 33-814. The term “utilized” is hard to understand and will probably be left to the courts to really understand it, but the general consensus is that the spirit of the law is that the owner has had to live in the home for 6 consecutive months.
What does this mean?
Those that have vaction/second homes in Arizona will probably have trouble getting protection from creditors if they are foreclosed on. It will also mean that you should not leave/abandon your home prior to the foreclosure, otherwise you may have some problems as well. Investors will probably also be excluded from any protection as well.
Where do we stand right now?
This bill has passed in legistlation and now is waiting for the Governor to sign. If she does, then it will go into effect in September.
Disclosure
In no way shape or form am I an attorney or a legislature, I am just looking at this bill from a citezen stand point and making some interpretations, if you are in a situation where this bill may affect you, you will want to consult with a Real Estate Attorney for guidance. Just as you would want to consult with a Real Estate agent when buying or selling real estate.
Additional Reading
Kelley Koehler from Tucson did an excellent write up on this bill.
AAR letter to the Governor.
Alex Morris - Attorney Marketing Blog
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