HB 2269: the Engrossed Language

REFERENCE TITLE: landlords; tenants; foreclosures

State of Arizona House of Representatives Forty-ninth Legislature
First Regular Session 2009

HB 2269 (ENGROSSED)

Introduced by Representative Crump

AN ACT AMENDING SECTIONS 33-809 AND 33-1321, ARIZONA REVISED STATUTES; AMENDING TITLE 33, CHAPTER 10, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING SECTION 33-1331; RELATING TO LANDLORDS AND TENANTS.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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HB 2269

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1 Be it enacted by the Legislature of the State of Arizona:
2 Section 1. Section 33-809, Arizona Revised Statutes, is amended to
3 read:
4 Section 33-809. Request for copies of notice of sale: mailing by
5 trustee; disclosure of information regarding trustee
6 sale
7 A. A person desiring a copy of a notice of sale under a trust deed, at
8 any time subsequent to the recording of the trust deed and prior to the
9 recording of a notice of sale pursuant thereto, shall record in the office of

10 the county recorder in any county in which part of the trust property is
11 situated a duly acknowledged request for a copy of any such notice of
12 sale. The request shall set forth the name and address of the person or
13 persons requesting a copy of such notice and shall identify the trust deed by
14 setting forth the county, docket or book and page of the recording data
15 thereof and by stating the names of the original parties to such deed, the
16 date the deed was recorded and the legal description of the entire trust
17 property and shall be in substantially the following form:
18 Request for Notice
19 Request is hereby made that a copy of any notice of sale
20 under the trust deed recorded in docket or book at
21 page_  , records of _ county, Arizona,
22
23 (legal description of trust property)
24 Executed by_ as trustor, in which
25 _is named as beneficiary and
26 as trustee, be mailed to _ at
27 _
28 Dated this _ day of _.
29
30 Signature_
31 (Acknowledgement)
32 B. Not later than thirty days after recording the notice of sale, the
33 trustee shall mail by certified or registered mail, with postage prepaid, a
34 copy of the notice of sale that reflects the recording date together with any
35 notice required to be given by subsection C of this section, addressed as
36 follows:
37   1. To each person whose name and address are set forth in a request
38 for notice, which has been recorded prior to the recording of the notice of
39 sale, directed to the address designated in such request.
40   2. To each person who, at the time of recording of the notice of sale,
41 appears on the records of the county recorder in the county in which any part
42 of the trust property is situated to have an interest in any of the trust
43 property. The copy of the notice sent pursuant to this paragraph shall be
44 addressed to the person whose interest appears of record at the address set
45 forth in the document. If no address for the person is set forth in the

HB 2269
1 document, the copy of the notice may be addressed in care of the person to
2 whom the recorded document evidencing such interest was directed to be mailed
3 at the time of its recording or to any other address of the person known or
4 ascertained by the trustee. If the interest that appears on the records of
5 the county recorder is a deed of trust, a copy of the notice only needs to be
6 mailed to the beneficiary under the deed of trust. If any person having an
7 interest of record or the trustor, or any person who has recorded a request
8 for notice, desires to change the address to which notice shall be mailed.
9 the change shall be accomplished by a request as provided under this section.
10 3. FOR SINGLE FAMILY, TO THE PROPERTY ADDRESS. THE COPY REQUIRED
11 PURSUANT TO THIS PARAGRAPH MAY BE MAILED BY FIRST CLASS UNITED STATES MAIL.
12 NOTICE SENT PURSUANT TO THIS PARAGRAPH SHALL CONTAIN THE NAME AND ADDRESS OF
13 THE MORTGAGOR THAT HOLDS THE MORTGAGE, OR THE NAME AND ADDRESS OF AN ATTORNEY
14 FOR THAT MORTGAGOR, AND SHALL BE ADDRESSED TO THE OCCUPANTS BY NAME, IF
15 KNOWN, AT THE PROPERTY ADDRESS, OR SHALL BE SERVED OTHERWISE ON ANY RENTAL
16 OCCUPANT. THE NOTICE SHALL INCLUDE IN BOLDFACE TYPE NO SMALLER THAN THE
17 REMAINDER OF THE DOCUMENT A STATEMENT IN SUBSTANTIALLY THE FOLLOWING FORM:

18 RESIDENTIAL TENANTS OCCUPYING THIS PROPERTY: BE ADVISED THAT
19 THIS PROPERTY IS IN THE PROCESS OF BEING FORECLOSED DUE TO
20 MORTGAGE NONPAYMENT. IF YOU ARE A TENANT RESIDING HERE UNDER A
21 WRITTEN RENTAL AGREEMENT, YOU HAVE CERTAIN RIGHTS IN ACCORDANCE
22 WITH THE ARIZONA RESIDENTIAL LANDLORD AND TENANT ACT AT ARIZONA
23 REVISED STATUTES SECTIONS 33-1301 THROUGH 33-1381. THESE MAY
24 INCLUDE THE RIGHT TO: TERMINATE YOUR RENTAL AGREEMENT, CONTINUE
25 RESIDING IN THE PREMISES, RECOVER YOUR PREPAID RENTS AND PREPAID
26 DEPOSITS OR MAKE A BONA FIDE OFFER TO PURCHASE THE PROPERTY AT
27 THE TRUSTEE SALE. TO PRESERVE THESE AND OTHER RIGHTS, YOU
28 SHOULD IMMEDIATELY PROVIDE THIS INFORMATION BY CERTIFIED,
29 REGISTERED OR EXPRESS MAIL, OR HAND DELIVERY, TO THE LENDER OR
30 LENDER'S ATTORNEY LISTED ON THIS DOCUMENT: NOTICE TO THE LENDER
31 THAT YOU ARE A TENANT OCCUPYING THE PREMISES, AND A COPY OF YOUR
32 WRITTEN RENTAL AGREEMENT, INCLUDING ANY RENT-TO-OWN OR LEASE
33 PURCHASE AGREEMENT.
34 C. The trustee, within five business days after the recordation of a

35 notice of sale, shall mail by certified or registered mail, with postage
36 prepaid, a copy of the notice of sale to each of the persons who were parties
37 to the trust deed except the trustee. The copy of the notice mailed to the
38 parties need not show the recording date of the notice. The notice sent
39 pursuant to this subsection shall be addressed to the mailing address
40 specified in the trust deed. In addition, notice to each party shall contain
41 a statement that a breach or nonperformance of the trust deed or the contract
42 or contracts secured by the trust deed, or both, has occurred, and setting
43 forth the nature of such breach or nonperformance and of the beneficiary's
44 election to sell or cause to be sold the trust property under the trust deed
45 and the additional notice shall be signed by the beneficiary or the

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HB 2269

1 beneficiary's agent. A copy of the additional notice shall also be sent with
2 the notice provided for in subsection B, paragraph 2 of this section to all
3 persons whose interest in the trust property is subordinate in priority to
4 that of the deed of trust along with a written statement that the interest
5 may be subject to being terminated by the trustee's sale. The written
6 statement may be contained in the statement of breach or nonperformance.
7 D. No request for a copy of a notice recorded pursuant to this
8 section, nor any statement or allegation in any request, nor any record of
9 request, shall affect the title to the trust property or be deemed notice to

10 any person that a person requesting a copy of notice of sale has or claims
11 any interest in, or claim upon, the trust property.
12 E. At any time that the trust deed is subject to reinstatement
13 pursuant to section 33-813, but not sooner than thirty days after recordation
14 of the notice of trustee's sale, the trustee shall upon receipt of a written
15 request, provide, if actually known to the trustee, the following information
16 relating to the trustee's sale and the trust property:
17 1. The unpaid principal balance of the note or other obligation which
18 is secured by the deed of trust.
19 2. The name and address of record of the owner of the trust property
20 as of the date of recordation of the notice of trustee's sale.
21 3. A list of the liens and encumbrances upon the trust property as of
22 the date of recordation of the notice of trustee's sale, excluding those
23 matters set forth in section 33-438, subsection A.
24 If the trustee elects to charge a fee for providing the information
25 requested, the fee shall not exceed five per cent of the amount the trustee
26 may charge pursuant to section 33-813, subsection B, paragraph 4, except that
27 the trustee shall not charge a fee that is more than one hundred dollars or
28 be required to accept a fee that is less than thirty dollars but may accept a
29 lesser fee at the trustee's discretion. The trustee, or any other person
30 furnishing information pursuant to this subsection to the trustee, shall not
31 be subject to liability for any error or omission in providing the
32 information requested, except for the wilful and intentional failure to
33 provide information in the trustee's actual possession.
34 F. Beginning at 9:00 a.m. and continuing until 5:00 p.m. mountain
35 standard time on the last business day preceding the day of sale and
36 beginning at 9:00 a.m. mountain standard time and continuing until the time
37 of sale on the day of the sale, the trustee shall make available the actual
38 bid or a good faith estimate of the credit bid the beneficiary is entitled to
39 make at the sale. If the actual bid or good faith estimate is not available
40 during the prescribed time period, the trustee shall postpone the sale until
41 the trustee is able to comply with this subsection.
42 G. In providing information pursuant to subsections E and F of this
43 section, the trustee, without obligation or liability for the accuracy or
44 completeness of the information, may respond to oral requests, respond orally
45 or in writing or provide additional information not required by such

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HB 2269

1 subsections. With respect to property that is the subject of a trustee's
2 sale, the beneficiary of such deed of trust or the holder of any prior lien
3 may, but shall not be required to, provide information concerning such deed
4 of trust or any prior lien that is not required by subsection E or F of this
5 section and may charge a reasonable fee for providing the information. The
6 providing of such information by any beneficiary or holder of a prior lien
7 shall be without obligation or liability for the accuracy or completeness of
8 the information.
9 Sec. 2. Section 33-1321, Arizona Revised Statutes, is amended to read:
10 33-1321. Security deposits
11 A. A landlord shall not demand or receive security, however

12 denominated, including, but not limited to, prepaid rent in an amount or
13 value in excess of one and one-half month's rent. This subsection does not
14 prohibit a tenant from voluntarily paying more than one and one-half month's
15 rent in advance.
16 B. The purpose of all nonrefundable fees or deposits shall be stated
17 in writing by the landlord. Any fee or deposit not designated as
18 nonrefundable shall be refundable.
19 C. With respect to tenants who first occupy the premises or enter into
20 a new written rental agreement after January 1, 1996, upon move in a landlord
21 shall furnish the tenant with a signed copy of the lease, a move-in form for
22 specifying any existing damages to the dwelling unit and written notification
23 to the tenant that the tenant may be present at the move-out
24 inspection. Upon request by the tenant, the landlord shall notify the tenant
25 when the landlord's move-out inspection will occur. If the tenant is being
26 evicted for a material and irreparable breach and the landlord has reasonable
27 cause to fear violence or intimidation on the part of the tenant, the
28 landlord has no obligation to conduct a joint move-out inspection with the
29 tenant.
30 D. Upon termination of the tenancy, property or money held by the
31 landlord as prepaid rent and security may be applied to the payment of all
32 rent, and subject to a landlord's duty to mitigate, all charges as specified
33 in the signed lease agreement, or as provided in this chapter, including the
34 amount of damages which the landlord has suffered by reason of the tenant's
35 noncompliance with section 33-1341. Within fourteen days, excluding
36 Saturdays, Sundays or other legal holidays, after termination of the tenancy
37 and delivery of possession and demand by the tenant the landlord shall
38 provide the tenant an itemized list of all deductions together with the
39 amount due and payable to the tenant, if any. Unless other arrangements are
40 made in writing by the tenant, the landlord shall mail the itemized list and
41 any amount due, by first class mail, to the tenant's last known place of
42 residence.
43 E. ON RECEIVING NOTICE OF PENDING FORECLOSURE, THE TENANT MAY DIRECT 44 THE LANDLORD TO APPLY PREPAID RENT AND SECURITY TO THE TENANT'S RENTAL
45 OBLIGATION AND IF THE TENANT SO DIRECTS, THE TENANT IS IN COMPLIANCE WITH THE 46 TENANT'S RENTAL PAYMENT OBLIGATION FOR ONE MONTH'S RENT OR IF THE AMOUNTS 47 HELD CONSTITUTE MORE THAN ONE MONTH'S RENT, THE TENANT'S RENTAL PAYMENT 48 OBLIGATION IS PROPORTIONATELY REDUCED. ON CONVEYANCE OF TITLE TO THE
44 RENTAL PROPERTY BY WAY OF FORECLOSURE, THE TENANCY IS DEEMED
45 TERMINATED, POSSESSION OF THE RENTAL PROPERTY IS DEEMED DELIVERED TO THE
46 FORMER OWNER AND THE TENANT IS DEEMED TO HAVE DEMANDED RETURN OF ANY

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HB 2269

1 PROPERTY OR MONEY HELD BY THE LANDLORD AS PREPAID RENT AND SECURITY.
2
3
4
5
6
7
8 E. F. If the landlord fails to comply with subsection D of this
9 section the tenant may recover the property and money due the tenant together
10 with damages in an amount equal to twice the amount wrongfully withheld.
11 F. G. This section does not preclude the landlord or tenant from
12 recovering other damages to which the landlord or tenant may be entitled
13 under this chapter.
14 G. H. During the term of tenancy the landlord may use refundable
15 security deposits or other refundable deposits in accordance with any
16 applicable provisions of the property management agreement. At the end of
17 tenancy, all refundable deposits shall be refunded to the tenant pursuant to
18 this section.
19 H. I. The holder of the landlord's interest in the premises at the
20 time of the termination of the tenancy is bound by this section.
21 Sec. 3. Title 33, chapter 10, article 2, Arizona Revised Statutes, is
22 amended by adding section 33-1331, to read:
23 33-1331. Lease purchases: bond required
24 A LANDLORD OR SELLER WHO ENTERS INTO A LEASE PURCHASE AGREEMENT OR

25 OTHER FORM OF RENTAL TO OWNERSHIP CONVERSION WITH A TENANT OR BUYER, HOWEVER
26 DENOMINATED, SHALL PROVIDE A BOND OR ESCROW ACCOUNT OR OTHER SIMILAR FORM OF
27 FINANCIAL GUARANTY TO SECURE THE AMOUNT OF MONEY PAID BY THE TENANT OR BUYER
28 THAT REPRESENTS DOWN PAYMENT MONIES, OPTION TO PURCHASE FEES AND ANY PREPAID
29 CLOSING COSTS, WHICH SHALL BE RETURNED TO THE TENANT OR BUYER AT THE TIME OF
30 TERMINATION OF THE TENANCY BY FORECLOSURE ACTION OR OTHERWISE.

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