Home Builder be Aware!

On April 22nd, 2014, HB 2018 was signed into law by Arizona Governor, Jan Brewer. The bill will amend two key anti-deficiency statutes, A.R.S. §§ 33-729 and 33-814, the former relating to judicial foreclosures and the latter to non-judicial foreclosures. Borrowers have relied upon both of these statutes in order to avoid liability on mortgages or deeds of trust after foreclosure. On top of amending the statutes, HB 2018 also includes additional provisions to both of the statutes; the provisions serve to elucidate and limit anti-deficiency protections for borrowers on all mortgages and deeds of trust executed after December 31, 2014.
Deficiency protections for commercial homebuilders, who receive loans for the purpose of constructing new homes to sell but the homes are not completed or occupied at the time of foreclosure, will be eliminated by the amendments to A.R.S. §§ 33-729 and 33-814. Should the property under consideration never be completed or actually made use of by the borrower, the amendments also clarify that the borrower is not entitled to anti-deficiency protection.
The amendments will give more guarantees to lenders for loans to commercial and residential homebuilders, even though there has been a downward trend in underwater mortgages over the past couple years.
We have represented many home builders over the years, if you have questions about this new law give Bill Miller a call at 602-31-6899 or stop by the office at 8170 North 86th Place, Suite 208 Scottsdale, AZ 85253.

If a landlord knew or should have known of activities by the tenant that could cause a danger or nuisance, i.e., damage to neighbors, to surrounding property owners, or even to a passerby, then the landlord can be held liable for tenant bad acts. See Klimkowski v. De La Torre, 175 Ariz. 340 (1993).

In the Klimkowski case our court ruled that the landlord knew or should have known of the tenants’ recklessness with regard to gasoline and incendiary devices on the rental property.  Therefore, the landlord was liable for damage caused by an explosion on the rental property. As to ‘should have known’, real estate investors who own rental property should regularly visit the rental property to assess the condition of the rental property and confirm that the tenants are not committing bad acts.

We have worked with landlords all over Arizona to help them assess and reduce potential liability. Please call us at 602-319-6899 to discuss any real estate questions.

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