Arizona Raised the Bar for HOA Foreclosures. What Changed for Homeowners in 2025 and 2026

For years, an Arizona condominium association could begin foreclosure once a unit owner was $1,200.00 behind on assessments. That changes on September 12, 2026, given steps taken by the Arizona legislature in 2025, and again in 2026. The Legislature raised the threshold for both planned communities and condominiums, and added a rule that stops associations from selling delinquent accounts to collectors and investors.

The new thresholds

A.R.S. § 33-1807, as amended by Laws 2025, Chapter 71, effective September 26, 2025, provides that a planned community association may foreclose its lien only if the owner has been delinquent for eighteen months or in the amount of $10,000.00 or more, whichever occurs first, and only after the board has attempted to communicate and offered a payment plan. Senate Bill 1246, enacted as 2026 Session Laws Chapter 162, brings the condominium statute, A.R.S. § 33-1256, to the same standard from its former one year or $1,200.00 threshold, and adds a special rule for large special assessments.

Senate Bill 1246 carries no emergency clause and no delayed effective date of its own. It therefore takes effect on the general effective date for the 2026 regular session, which the Legislature publishes as September 12, 2026. Until that date the condominium statute still reads one year or $1,200.00, and a condominium association can still act on the old standard. The planned community threshold, in contrast, has been in force since September 26, 2025.

The special assessment rule appears in both statutes as of September 12, 2026. For any special assessment with an initial value of $10,000.00 or more, only the eighteen month threshold applies. One large special assessment does not let an association move straight to foreclosure on the dollar figure alone.

What a common expense lien covers, and what it does not

The statutes do not give an association one general lien for everything an owner owes. The statutes create two categories, and only one of them can be foreclosed. That distinction is an important one for Arizona homeowners in planned and condominium communities.

The “common expense” lien is defined by statute. Under A.R.S. § 33-1802(2) for planned communities, and § 33-1202(10) for condominiums, it is the lien for assessments, for late charges on those assessments if the declaration authorizes them, for reasonable collection fees and costs incurred or applied by the association, and for reasonable attorney fees and costs incurred with respect to those assessments, if a court awards them. A common expenses lien attaches to the property when the assessment becomes due. Recording the declaration is the only recording the statutes require, so the lien is in place before an owner ever misses a payment.

Everything else the association charges falls in a second category. The statutes call it “member expenses” in a planned community and “unit owner expenses” in a condominium. Under § 33-1802(5) and § 33-1202(26), these member or unit owner expenses mean fees, charges, late charges, and monetary penalties or interest, and it expressly excludes any amount that is included in a common expense lien. Fines and monetary penalties are member or unit owner expenses. They are not a common expense lien, and they do not become one no matter how large they grow.

What the new thresholds do not cover

Fines. Under § 33-1807, penalties and other member expenses are not enforceable as common expense liens, and a judgment lien for them may not be foreclosed. An association that blends fines into a foreclosure demand may be overstating its position. Whether the number in the letter is an assessment or a fine is not always apparent from the letter, and it is the difference between a threat the association can act on and one it cannot.

Associations can no longer sell the debt

The language in the new statutes now bars the association from transferring ownership or control of delinquent common expense debt. An owner will be dealing with the association itself, or its attorney or collection agent acting for it, rather than a third party that bought the account.

How the statutes qualify what can be foreclosed

The association's common expense lien may be foreclosed in the same manner as a mortgage on real estate, but it may be foreclosed only if the owner has been and remains delinquent in the payment of any assessment or portion of the assessment for the stated period or in the stated amount, whichever occurs first, as determined on the date the action is filed.

Three elements of that sentence decide whether an association may proceed. The first element is the kind of debt. Arizona law requires that only a delinquent assessment, not a delinquent account balance, be foreclosed. An association ledger may combine assessments with fines, late charges, and collection costs in a single figure, and the amounts that fall outside the “common expense” lien do not qualify toward either threshold. An owner who receives a demand letter may be reading one number that represents two different categories of expenses.

The second element is timing. Arizona law measures the delinquency on the date the association files its action, not on the date the association sends a demand letter, and not on the date the board votes to proceed with a civil action.

The third element is the treatment of every amount outside the “common expense” lien. Under A.R.S. § 33-1807(B) for planned communities, and § 33-1256(B) for condominiums, “member expenses” and “unit owner expenses” do not qualify as common expense liens. An association may pursue those amounts in a separate civil action, and may record a judgment if the association prevails. Arizona law then bars the association from foreclosing that judgment lien, and gives that judgment lien effect only on conveyance of an interest in the property.

Arizona law also directs the order in which an association applies a payment an owner makes on a delinquent account. That order may affect how quickly the foreclosable portion of a balance comes down, and the order may work to an owner’s advantage in some cases. An owner who has received a foreclosure demand can have Patrick review the association ledger, the payment history, and the governing documents, and address which of these elements applies to his or her account.

What an owner in arrears should know

The new thresholds may buy an owner/member time, but they do not erase a debt. Interest, late charges, and attorney fees continue to run on assessments that are owed, and the statute's payment plan requirement is only useful to an owner who invokes it in the right way and obtains it in writing. An owner being threatened with foreclosure below the threshold, or over fines that have accrued, may have a defense. Whether that defense is being raised correctly, and before a complaint is filed, is what determines whether such a defense can be successful, and it is a question to address at a meeting with Patrick.

Nackley Law represents Arizona homeowners in disputes with associations, and represents lenders and other junior interest holders defending against association foreclosure actions.