Arizona Defines Dwelling Under Arizona's Anti-Deficiency Statute, Does Your Home Qualify For Protection Under Arizona's Anti-Deficiency Statue?

Recently the Arizona Supreme Court narrowed the definition of dwelling under Arizona’s anti-deficiency statute.  As the Court acknowledged the meaning of dwelling varied throughout case law interpreting Arizona’s anti-deficiency statute.  Previously the Court had defined dwelling to mean to be the purpose or use of building for human abode, that the structure is wholly or partially occupied by persons at night for its intended use.  More simply stated, that the structure’s intended use had to be as a residence.  The Court even expanded this to included an investment condominium that was used on a part time basis by the owner and third party renters. (Northern Ariz. Properties v. Pinetop Properties).  The Court has narrowed the definition to require that there must be a residential structure on the real property, and that real property cannot be utilized for a dwelling purposes until the structure is complete.  Meaning, a property owner can not claim Arizona’s anti-deficiency statute applies by simply stating that the intent was to build a residential structure on the property.

It is crucial for homeowners to understand the applicability of Arizona’s anti-deficiency statute, as it relates to their own home.   Arizona’s anti-deficiency statute is designed to protect homeowners from the sometime unstable housing market.  If your lender forecloses on your home and sells it via a trustee sale, Arizona’s anti-deficiency statute prevents your lender from pursuing you for any deficiency balance that may remain after it sells your home at the trustee sale.