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The seller has extensive roof work done prior to listing the home for sale. Two days later, a monsoon storm causes extensive leaking and shows that the roofing work was improperly done. The seller has now refused to pay the roofing contractor, and the roofing contractor has recorded a mechanic’s lien. The roofing contractor, however, is not licensed with the Arizona Registrars of Contractors. Is this mechanic’s lien valid?
No. Under A.R.S. §33-981(C) only a licensed roofing contractor would be entitled to record a mechanic’s lien. Furthermore, an unlicensed roofing contractor cannot even file a lawsuit to collect for the roofing work that has been done. A.R.S. §32-1153.
Note: A.R.S. §32-1121(A)(14) provides for a “handyman” exemption from the licensing requirements and authorizes an individual to lawfully perform certain types of work “for which the aggregate contract price, including labor, materials and all other items, …is less than one thousand dollars.”
A dental office was foreclosed. All of the dental equipment and patient records were left behind by the dentist. May the buyer, who purchases the dental office from the bank, take possession of the dental records?
A.R.S. § 12-2292. Confidentiality of medical records and payment records
- Unless otherwise provided by law, all medical records and payment records, and the information contained in medical records and payment records, are privileged and confidential. A health care provider may only disclose that part or all of a patient’s medical records and payment records as authorized by state or federal law or written authorization signed by the patient or the patient’s health care decision maker.
Further, HIPAA allows for up to a $50,000 fine per record if violated (capped at $1.5 million per year).
Therefore, the buyer should not take possession of the records. The bank should contact the dentist and make arrangements for the dentist to take possession of the patient records.
Independent legal counsel should be consulted.
After the foreclosure, the new owner of the home wants to conduct an inspection. The former owner of the home refuses access to the home for the inspection. The new owner then delivers a two-day notice to the former owner of the home to inspect the home under A.R.S. § 33-1343 of the Arizona Residential Landlord-Tenant Act. Is the new owner entitled to furnish this two-day notice to inspect?
Probably not. The Arizona Residential Landlord-Tenant Act only applies if there is a rental agreement. For example, see A.R.S. § 33-1310(16). After a foreclosure, there is no “rental agreement” between the former owner and the new owner of the home. Therefore, the new owner of the home probably has no right to inspect the home until after a five-day notice and completion of eviction proceedings under A.R.S. § 12-1173.01.
Note: Even if the new owner would be entitled to furnish a two-day notice to inspect but the former owner refused access, the new owner would have to get a court injunction for access, which could take two to three weeks.
A mortgage lender has a $4,000,000 loan on a commercial office building. The commercial office building is worth $2,500,000. After the foreclosure sale, can the mortgage lender file a lawsuit against the former owner of the office building to collect on the $1,500,000 deficiency?
Yes. Arizona anti-deficiency statutes protect only owners of homes. After the foreclosure sale, the mortgage lender has ninety days to file the lawsuit to collect the $1,500,000 deficiency based on the mortgage lender’s appraisal of $2,500,000 as the value of the commercial office building. The primary defense of the former owner of the commercial office building is that the $2,500,000 appraisal is too low. In other words, there would be a “battle of the appraisers” in the lawsuit to determine the amount of the deficiency.
At the time of the foreclosure of the home, there is a lien for unpaid HOA fees of $2,200. After the foreclosure of the first mortgage loan, the first mortgage lender becomes the owner of the home. Is the HOA lien for $2,200 in unpaid HOA fees extinguished at the time of the foreclosure sale? If so, who is liable for the $2,200 in unpaid HOA fees?
At the time of the foreclosure sale, the lien for $2,200 in unpaid HOA fees is extinguished. The former owner of the home, however, still has personal liability for the $2,200 in unpaid HOA fees. The first mortgage lender as the new owner of the home is only liable for HOA fees incurred after the date of the foreclosure.
The foreclosure sale is scheduled for June 10. On June 6, an investor interested in buying the home at the foreclosure sale makes a visit to the home. During this visit the homeowner tells the investor that he will be removing all of the upgrades that he installed in the home such as ceiling fans and screen doors. Does the homeowner have the right to remove the upgrades such as ceiling fans and screen doors?
No. The removal of fixtures without the consent of the mortgage lender before the foreclosure sale is a crime (A.R.S. §13-2204). After the home is sold, the removal of the fixtures by the former homeowner is criminal theft of the fixtures now owned by the new owner. See A.R.S. §13-1802.