Change required in AZ by July 4th

By Rex C. Anderson, Esq., Attorney at Law, Scottsdale, Arizona

Through a compromise or concession, depending on your viewpoint, the new version of the Arizona statute that defines the required content of your Notice of Sale now includes the following additional warning language. The effective date of this change is Friday, July 3rd, 2015. The additional language described below is not required in any Notice of Trustee’s Sale recorded prior to July 3, 2015.

The statute (A.R.S. section 33-808(C)) now reads in part: The Notice of Sale shall contain …The following statement in the first paragraph of the notice of sale, printed in bold-face and capitalized type:

“NOTICE! IF YOU BELIEVE THERE IS A DEFENSE TO THE TRUSTEE SALE OR IF YOU HAVE AN OBJECTION TO THE TRUSTEE SALE, YOU MUST FILE AN ACTION AND OBTAIN A COURT ORDER PURSUANT TO RULE 65, ARIZONA RULES OF CIVIL PROCEDURE, STOPPING THE SALE NO LATER THAN 5:00 P.M. MOUNTAIN STANDARD TIME OF THE LAST BUSINESS DAY BEFORE THE SCHEDULED DATE OF THE SALE, OR YOU MAY HAVE WAIVED ANY DEFENSES OR OBJECTIONS TO THE SALE. UNLESS YOU OBTAIN AN ORDER, THE SALE WILL BE FINAL.”

The statute was also amended to show the suggested place of this screaming admonition is in the middle of the first sentence, making an otherwise readable notice now nearly unreadable. The legislative drafters ignored the grammatical problem of inserting a complete sentence into the middle of another complete sentence, so that your Notice of Trustee’s Sale is now suggested to read:

“The following legally described trust property will be sold, pursuant to the power of sale under that certain trust deed recorded in docket __________ at page ____________ records of ___________ county, Arizona, NOTICE! IF YOU BELIEVE THERE IS A DEFENSE TO THE TRUSTEE SALE OF IF YOU HAVE AN OBJECTION TO THE TRUSTEE SALE, YOU MUST FILE AN ACTION AND OBTAIN A COURT ORDER PURSUANT TO RULE 65, ARIZONA RULES OF CIVIL PROCEDURE, STOPPING THE SALE NO LATER THAN 5:00 P.M. MOUNTAIN STANDARD TIME ON THE LAST BUSINESS DAY BEFORE THE SCHEDULED DATE OF THE SALE, OR YOU MAY HAVE WAIVED ANY DEFENSES OR OBJECTIONS TO THE SALE. UNLESS YOU OBTAIN AN ORDER, THE SALE WILL BE FINAL AND WILL OCCUR at public auction to the highest bidder at…. (location information), etc.”

Or, in other words: Notice, some property will be sold under a deed of trust, NOTICE! GET A COURT ORDER BY THE DEADLINE OR YOU WILL WAIVE YOUR OBJECTIONS AND DEFENSES, AND THE SALE WILL BE FINAL AND WILL OCCUR at public auction to the high bidder…

While the change does put the warning language front and center, I think it makes the notice harder to read.

The back-story is the proponents were looking to make significant changes to the finality and binding effect of a completed trustee’s sale. Many thanks are owed to Rick Chambliss and Arizona Trustee Association and their lobbyist for working with the sponsor of the bill to cut out many other unworkable provisions contained in the initial draft (Senate Bill 1448). But the proponents of the bill insisted: “more notice to the public is better than no notice”.

As much as possible, the final language was drafted to parrot the provisions and deadline imposed under A.R.S. section 33-811(C). That statute expressly states that the Trustor (borrower) and everyone else that is mailed a copy of the Notice of Trustee’s Sale shall waive all of their defenses and objections to the sale unless they obtain an injunction order from an Arizona court by 5:00 P.M. on the last business day before the scheduled sale date. So the screaming forewarning does not create any new rights or remedies for the borrower or junior lien holders. It merely warns them of the consequences of not complying with A.R.S. section 33-811(C).

There is no downside to changing your document forms now in order to be ready for the changeover date on July 2nd.

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Rex C. Anderson is a practicing solo attorney who limits his practice to representing other foreclosure trustees doing business in Arizona and handling foreclosures for a select group of mortgage lenders. If you have questions or concerns about this article, he can be reached at 888-675-7809 or by email at RCA@RexAndersonLaw.com.