`Please pass SB 1470, homestead protection for the people.
History of Homestead Exemption HOA Exclusion (SB1470)
In 2004 ARS 33-1806(3)(h) was added to the mandatory disclosure requirements, requiring a buyer to sign an acknowledgment that he agrees to the loss of his homestead exemption (now $400,000). Just one year later, in 2005, the statute was again amended to remove any reference to the loss of the homestead exemption. In 2007 Governor Napolitano vetoed the homestead exemption bill on a flimsy argument – to many subjects.
Today, ADRE (real estate dept) still does not inform consumers of the loss of their homestead exemption.
In 2007 I wrote, in part,
“They [CAI] raise the issue of a consensual agreement, the unsigned CC&R ‘agreement,’ which, under Arizona statutes, is an exception to the application of the homestead protection. The author of the S/E amendment to the bill, Representative Farnsworth, made quite clear that ARS33-1807(A), which opens with, ‘The association has a lien . . . .’ (emphasis added), is a statutory lien and not a consensual lien – the homeowner has no choice in the matter whatsoever.
“Any reference to a consensual lien must come from a voluntarily entered agreement, and, not from a statute. Our concern here is the alleged CC&Rs consensual agreement that may contain a provision for an agreement to a lien for unpaid assessments and the right to foreclose. No CC&R that I have been made aware of mentions a surrender or a consent to the loss of the homestead exemption. No real estate purchase agreement that I am aware of mentions an agreement to surrender the homestead exemption. The CC&Rs have been held as binding, not as a consensual agreement per se, but by the application of the doctrine of constructive notice, or the simple posting to the county clerk’s office.”
This is the Legislature’s second chance to restore the equal protection of the laws to homeowners in HOAs. There is no justification for denying homestead protection when.
ARS Title 33, -Ch. 8
33 – 1101. A. Any person the age of eighteen or over, married, or single, who resides within the state may hold as a homestead exempt from attachment, execution and forced sale, not exceeding $400,000 in value, any one of the following:
1. The person’s interest in real property in one compact body upon which exists a dwelling house in which the person resides.
2. The person’s interest in one condominium or cooperative in which the person resides.
33-1103. Homestead exemption; extent of exemption; exceptions
A. Real property that is subject to the homestead exemption provided for in section 33-1101, subsection A is exempt from involuntary sale under a judgment or lien, except in connection with:
1. A consensual lien, including a mortgage or deed of trust, or contract of conveyance.
33- 1256; 33 – 1807. A. The association has a lien on a unit for any assessment levied 14 against that unit from the time the assessment becomes due.
SB1470 (Feb. 13, 2023)
C. Subsection B of this section does not affect the priority of
10 mechanics’ or materialmen’s liens or the priority of liens for other
11 assessments made by the association
The lien under this section is not 12 subject to chapter 8 of this title.
3 thoughts on “HOA Homestead Exemption Exclusion (SB1470)”
As you know, I testifying many times on the Homestead issue when Eddie Farnsworth tried to get it reinstated when he was in office. Historically the way the Homestead exemption was lost around 1997 was through deceit in the bill language that even the legislators didn’t know what they were removing. The statutes don’t explicently say the exemption is forfeited or even directly mentioned. Consequently it’s been an uphill battle to reinstate the Homestead protection ever since.
Finally it’s important to understand why the exemption was created in the first place in many States, starting in the eighteen hundreds. Specificaly the original law was created to protect both property owners and the State when too many people become destitute ( from gambling debt, fraud, theft etc. ) as many where from crooked gambling schemes of the time and then becoming wards of the State which is a huge burden on the State and taxpayers. As you know the HOA industry is fighting hard to deny the exemption from HOA members because it benefits them as a corruption tool to impose abusive and extreme leverage upon members to pay any amounts they chose. Furthermore It allows the industry to be corrupt in their practices and acts as a coercive tool, because the consequences are too disproportional towards the members, pay $800 fine ( and most of that may be in fees) or lose $ 300,000 home equity or more ! The punishment doesn’t fit the crime. While denying the State the original protections the exemption was intended for as today they’re even more ways of losing everything than just gambling debit and thats why the homestead exemption must be reinstated for all property owners and to protect the State.
It’s an issue that goes well beyond just not being informed or disclosed in real estate or statute language.
This is for State of Arizona, Is this for New Jersey State too?
You would need to search the law on homestead exemption as each state is different. My guess is yes since it it a national CAI position.