It is common for well share agreements to have a provision whereby a lien can be levied under ARS 33-1256 and ARS 33-1257 for unpaid dues.
Steps to Recording an Assessment Lien
- Pre-lien Letter. At least thirty (30) days prior to recording an assessment lien on a member’s property (the member’s “separate interest”) for delinquent assessments, late charges, interest, collection fees and costs owed by that member to the association, the association is required to provide the member with a pre-lien letter via certified mail.
- Notice of Delinquent Assessment. (Notice of Intent to Record an Assessment Lien).
2.1- Itemized Statement of Amounts Owed– The assessment lien must state the amount of the delinquent assessments and any other sums imposed, i.e., late fees, interest, attorneys’ fees, collection costs, etc. The itemized statement of the amounts which were provided to the owner in the pre-lien letter must also be recorded together with an assessment lien.
2.2- Legal Description of the Member’s Property– The assessment lien must include a legal description of the member’s party against which the delinquent assessment and other sums are levied.
2.3- Name of the Member– The assessment lien must include the name of the record owner of the separate interest against which the assessment lien is imposed.
2.4- Signed By Designated Person(s)– The assessment lien must be notarized and signed by the person designated in the well share agreement–well manager–or by the well management board, or if no one is designated, by the well manager.
2.5- Recorded With the County– The assessment lien must be recorded in the county in which the property is located.
2.6- Mailing the Lien To All Parties– Once recorded, a copy of the recorded assessment lien must be mailed by certified mail to every person whose name is on the well share agreement. The recorded notice must no be mailed later than ten (10) calendar days after recordation.
Pitfalls of Wrongfully Recording a Lien
A.R.S. § 33-420(A) states:
A. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, 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.
A.R.S. 33-420(A)
B. The owner or beneficial title holder of the real property may bring an action pursuant to this section in the superior court in the county in which the real property is located for such relief as is required to immediately clear title to the real property as provided for in the rules of procedure for special actions. This special action may be brought based on the ground that the lien is forged, groundless, contains a material misstatement or false claim or is otherwise invalid. The owner or beneficial title holder may bring a separate special action to clear title to the real property or join such action with an action for damages as described in this section. In either case, the owner or beneficial title holder may recover reasonable attorney fees and costs of the action if he prevails.
A.R.S. 33-420(B)
C. A person who is named in a document which purports to create an interest in, or a lien or encumbrance against, real property and who knows that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid shall be liable to the owner or title holder for the sum of not less than one thousand dollars, or for treble actual damages, whichever is greater, and reasonable attorney fees and costs as provided in this section, if he willfully refuses to release or correct such document of record within twenty days from the date of a written request from the owner or beneficial title holder of the real property.
A.R.S. 33-420(C)
D. A document purporting to create an interest in, or a lien or encumbrance against, real property not authorized by statute, judgment or other specific legal authority is presumed to be groundless and invalid.
A.R.S. 33-420(D)
E. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is guilty of a class 1 misdemeanor.
A.R.S. 33-420(E)
If you are an Arizona well manager looking to enforce a shared well agreement, then contact the Dunaway Law Group at 480-702-1608 or message us HERE.
The Dunaway Law Group provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice and does not create a lawyer-client or attorney-prospective client relationship. Readers should not act upon this information without seeking advice from professional advisers. Additionally, this Firm limits its practice to the states of Arizona and New York