This case involved a dispute between a homeowners association (Association) and a homeowner member of Association (Owner) over Associations right to foreclose on its lien on Owners property which resulted from unpaid delinquent assessments.

Association first sued Owner to foreclose on its lien for unpaid assessments and other amounts. Association alleged that the sum of $8,246.48 was owed for amounts that had been awarded in an earlier justice court judgment, plus subsequently incurred additional amounts that were not included in the judgment and attorney fees and costs. After Owner failed to timely respond to the action, Association sought the entry of a default and a default judgment against Owner. After the default had been entered, Owner sought to set aside the default and he tendered payment in the amount of $5,000.00 to Association to cover all past due assessments (not including the attorneys fees and additional charges beyond the actual unpaid assessments).

Owner contended that by paying all of the past due assessments, Association could not foreclose for the unpaid attorney fees and other charges. The trial court declined to set aside the default and ruled in favor of Association. The court not only entered a judgment of foreclosure, but also awarded Association $11,190 in attorneys fees and $1,012.25 in costs, plus interest. Thus, although Owners $5,000.00 payment eliminated the outstanding principal sum of unpaid assessments, the court still allowed the foreclosure sale to go forward because Association was also entitled to proceed with the foreclosure for the unpaid attorneys fees and costs.

Owner appealed the trial courts denial of Owners motion to set aside the default and contended the trial courts judgment was void because the court lacked jurisdiction to order foreclosure under Arizona statute 33-1807(A). The appellate court found that said statute allows an association to sue to foreclose when a lien either exceeds $1,200 in unpaid assessments or is delinquent for one year. The court went on to state that the statute does not expressly eliminate the foreclosure remedy if an owner makes a payment to reduce or eliminate the unpaid assessment balance because the lien created by the statute expressly includes not only assessments but also charges for late payment of those assessments, reasonable collection fees, and reasonable attorney fees and costs incurred with respect to those assessments.

Arizona Appellate Court decision (May 5, 2020).

See case decision: Case_Laveen_Meadows_Homeowners_Ass’n_v._Mejia