In Arizona, a creditor can obtain a non-voluntary lien on a debtor’s real property by first obtaining a judgment against the debtor and then by properly recording the judgment in every county in which the debtor owns, or may own, real property. Even real property that is obtained after the date the judgment is recorded becomes subject to the lien.
There are substantial penalties for wrongfully placing a lien on someone’s property, so care must be taken before anything is done that might place a “cloud on title.”
A judgment lien does not apply to homestead property, but it does apply to the non-exempt portion of a debtor’s residence. A judgment lien is good for a limited period of time. If proper action is taken in a timely manner, the lien may be renewed.
An Arizona statute requires that a “Money Judgment Information Form” be recorded with the judgment, in order to give title companies and others sufficient information about the identity of the creditor and debtor so that the lien is not mistakenly applied to someone with a name similar to the debtor’s name.
Once a judgment has been satisfied (paid off) the creditor must file and record a document showing the satisfaction of the judgment. This document has the legal effect of removing the lien.
The Arizona statute that provides for judgment liens is Arizona Revised Statutes, Section 33-964, which states:
33-964. Lien of judgment; duration; exemption of homestead; acknowledgment of satisfaction by judgment creditor
A. Except as provided in sections 33-729 and 33-730, from and after the time of recording as provided in section 33-961, a judgment shall become a lien for a period of five years from the date it is given, on all real property of the judgment debtor except real property exempt from execution, including homestead property, in the county where the judgment is recorded, whether the property is then owned by the judgment debtor or is later acquired. A judgment lien for support, as defined in section 25-500, and associated costs and attorney fees remains in effect until satisfied or lifted.
B. A recorded judgment shall not become a lien upon any homestead property. Any person entitled to a homestead on real property as provided by law holds the homestead property free and clear of the judgment lien.
C. A judgment of the justice court, municipal court, superior court or United States court which has become a lien under this article, shall, immediately on the payment or satisfaction of the judgment, be discharged of record by the judgment creditor or the judgment creditor’s attorney by recording a satisfaction of judgment with the county recorder of the county in which the judgment is recorded. The judgment creditor or the judgment creditor’s attorney shall enter a notation of satisfaction on the docket of the clerk of the superior court of each county where the judgment has been entered or docketed, and in a like manner enter a notation of satisfaction on the docket of the clerk of the United States district court.