ARS §33-420 is Arizona’s Groundless lien statute. Generally, it prohibits someone from making a wrongful claim against a parcel of real property. It provides that a person who causes a document to be recorded “knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is liable to the owner or beneficial title holder of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichever is greater, and reasonable attorney fees and costs of the action.”
This is a powerful statute. When a false lien or claim is discovered, often all that is needed to get it removed is to make a demand pointing out the penalties in this statute.
Recently the Arizona Court of Appeals has broadened the protection this statute provides. In Stauffer v. U.S. Bank National Association it was ruled that recorded documents that assert some interest in real property, such as a Notice of Trustee’s Sale, are subject to Arizona’s Groundless Lien Statute. This potentially gives Arizona homeowners another strong avenue of attacking a foreclosure proceeding that was filed prematurely or without legal justification.