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© 1999 Mark L. Manoil
If you own Arizona real estate for which some portion of the
property taxes have not been paid, you will likely receive a 30-Day Notice of
Intent to Foreclose when those unpaid taxes mature for foreclosure. This
Notice is sent by a tax lien investor who has purchased the delinquent tax lien
on your property. The investor is seeking repayment of the tax lien (usually
with interest) or, alternatively, foreclosure and ownership of the liened
property.
If you are the property owner, the Notice is a last call for you to pay the
taxes, before a tax lien foreclosure law suit is initiated. The Notice is
mandated by statute before the suit may be commenced, but your receipt of
the Notice is not required by the statute. That is, if the investor has sent the
Notice to an address that complies with the statutory requirement (“to the
owner of record according to the records of the county in which the property
is located” -- A.R.S. §42-18202) then the fact that the Notice has not been
received by you is not likely to be a defense when the lawsuit is initiated. So
if you learn of the Notice by accident or because someone forwards it to you,
you should respond to it along the lines described in this article.
Information Required in the Notice
The Notice is required to contain the following information about the
property subject to the tax lien: the legal description (not a street address); and
the tax parcel number (an identification number assigned by the County
Assessor and used by the County Treasurer to track tax payments). The Notice
is also required to identify the Certificate of Purchase number of the tax lien
intended to be foreclosed, and the earliest date (at least 30 days after the date
of the Notice) that the foreclosure suit will be filed. With the foregoing
information in the Notice, you should be able to confirm the tax liability and
your ownership of the property, to determine what, if any, action you might
take in response to the Notice.
React to the Notice
Don’t ignore the Notice. Read it carefully. Failure to act in response to
a 30-day Notice of Intent to Foreclose may result in a foreclosure judgment
being entered against you (and your losing your interest in the property), or
additional expense for attorney’s fees and costs to payoff the liens, if suit is
filed before you attend to the problem. Even if you have no interest in the
property, it may be preferable to deed the interest to the noticing party instead
of ignoring the Notice, to avoid having a judgment entered against you, which
might adversely affect your credit.
If you are not sure that you are the actual owner of the property, first
call the County Assessor to double check, giving the tax parcel number as a
reference. Further research may be necessary, such as contacting a real estate
professional or title company ownership department, to confirm vesting deed
information. If you recently transferred the property, you should forward the
Notice to the party to whom you transferred the property, although you are
under no statutory obligation to do so.
If you are satisfied that you indeed are the owner or have an interest in
the property which is described in the Notice (note: the legal description in the
Notice often tracks the Assessor’s abbreviated description, not necessarily the
full description spelled out on a deed), you will want to confirm the amount of
the tax liability. To do this, you should first call the County Treasurer’s Office,
again giving as reference the tax parcel number. The Treasurer’s Office can
usually give the current payoff figure for the tax lien(s) sought to be foreclosed,
as well as any other taxes owing on the property.
When the Notice and the Treasurer Are Inconsistent
Occasionally, however, the Treasurer’s Office may report that taxes for
the year described in the Notice are not owing, because they have been paid.
In such a case, you should inquire actually who paid the taxes. If you were not
the payor, the actual payor may still have a tax lien claim against the property
for the taxes that person paid. Thus, you should next call the sender of the
letter in case the information in the letter does not match the information
available from the Treasurer’s office, to determine the basis for the noticing
party’s claim upon which the Notice is based.
Pay the Taxes
To protect your interest in the property, you, someone else with an
interest in the property, or someone on your behalf, must pay (redeem) the
taxes. Sometimes the party issuing the Notice will be amenable to making
arrangements with the property owner to allow the latter to pay the taxes other
than in a lump-sum or to avoid being named in the suit.
If you are unable to pay the tax lien claim before the foreclosure suit is
filed, all is not lost. Actual entry of a judgment foreclosing rights of redemption
of a tax lien can only occur after the parties with an interest have been
formally served with a summons and complaint in the suit, their defaults
entered (if they fail to appear and answer the complaint), and the scheduling
of a default judgment hearing with the Superior Court. Under the law,
redemption of the tax lien can be made at any time prior to entry of
foreclosure judgment by the Court. The downside of delay in redeeming,
though, is that once suit has commenced, the redeeming party will likely be
additionally liable for the investor’s attorney’s fees and costs incurred in the
action. And if not also paid at the time of redemption of the tax lien, this
liability may result in entry of a money judgment against the redeeming party.
Perhaps ironically, such a money judgment may attach as a lien to the
redeeming party’s interest in the property, and ultimately be enforced by a
sheriff’s execution sale.
Conclusion
In sum, if you receive a 30-day Notice of Intent to Foreclose a property
tax lien, do not ignore it. Read it, confirm the details, and if you wish to protect
your interest in the property against foreclosure, pay the taxes before suit is
filed. After suit is filed you may still be able to redeem, but the expense of
attorney’s fees and court costs will likely be added to the amount necessary to
pay off the claim.
The information presented in this communication is not intended as legal advice, nor does this communication establish an attorney-client relationship. The opinions expressed are those solely of Mark Manoil, unless otherwise noted. I specifically disclaim any liability for any reader's detrimental reliance on the information and views presented herein. If you need professional advice, please contact a competent professional.
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