Homestead and Judgment Lien Exemption

When a Judgment has been recorded, the general rule is that it attaches as a Judgment lien to all real property then owned or later acquired by the Judgment debtor. A judgment lien will usually need to be cleared by payment or otherwise before the real property can be sold or refinanced.

Arizona, however, has traditionally protected homeowners. In Arizona a judgment lien does not attach to a person’s home. The rules are set forth in Arizona law as follows:

§33-964.  Lien of judgment; duration; exemption of homestead; acknowledgment of satisfaction by judgment creditor

A.  Except as provided in sections 33729 and 33730, from and after the time of recording as provided in section 33961, 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 in which 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 25500, remains in effect until satisfied or lifted.

B.  Except as provided in section 33-1103, a recorded judgment shall not become a lien on 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.

Per ARS §33-964 B it is clear that homestead property is exempt. It is no longer required to record a declaration of homestead to protect your home. A homestead is automatic in Arizona for a personal residence and protects up to $150,000.00 of equity value.

Since 2008 the rule in Bankruptcy Court has been in accord. In re Rand, 400 B.R. 749, 750 (2008) held that, under Arizona law, recorded judgment liens do not attach to homestead property and this is true even if the value of the property exceeds the cap on the value of the exemption.