State Foreclosure Law Library

arizona

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Arizona — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-01.

Arizona is a tax-lien-certificate state (not a tax-deed state for the delinquent-tax sale itself). Counties auction a certificate of purchase (CP) on delinquent parcels; the buyer earns statutory interest and, after a 3-year hold, may bring a judicial action in Superior Court to foreclose the owner’s right to redeem. Mortgage foreclosure is overwhelmingly non-judicial via deed-of-trust trustee’s sales (Title 33, Ch. 6.1), with a robust anti-deficiency shield. Following tyler-v-hennepin-county (2023), Arizona’s legislature bolted an excess-proceeds sale mechanism onto its tax-lien foreclosure statute (A.R.S. § 42-18204, as amended) so a former owner can capture surplus equity rather than forfeit the whole parcel to the CP holder.

0. Identity & Classification

  • Recording unit: county (count: 15)
  • Tax sale type: tax lien certificate (certificate of purchase); a treasurer’s deed issues later only if the lien is foreclosed and no excess-proceeds sale is ordered.
  • Tax foreclosure process: judicial — action to foreclose the right to redeem in Superior Court (A.R.S. § 42-18201). [Source: azleg.gov §42-18201]
  • Mortgage foreclosure process: both, but predominantly non-judicial (deed-of-trust trustee’s sale, A.R.S. § 33-807); judicial mortgage foreclosure available under Title 33, Ch. 6.
  • Selling authority: county treasurer (tax lien sale & tax foreclosure deed); trustee (deed-of-trust sale); sheriff (judicial-foreclosure / execution sale).
  • Statutory home: Title 42, Ch. 18 (Property Tax — Collection / Tax Liens) — https://www.azleg.gov/ars/42/18201.htm ; Title 33, Ch. 6.1 (Deeds of Trust) — https://www.azleg.gov/ars/33/00807.htm
  • Tyler v. Hennepin compliance: reformed_post_Tyler — A.R.S. § 42-18204 now lets a property owner facing foreclosure of redemption request an excess-proceeds sale; the court must order it where the price is likely to exceed the tax debt/costs by more than $2,500, and the judgment “does not extinguish the property owner’s interest in the excess proceeds.” [Source: azleg.gov §42-18204] Pre-amendment, the CP holder took the whole parcel free of any surplus obligation — the practice an Arizona State Law Journal analysis flagged as constitutionally vulnerable after Tyler. [Source: arizonastatelawjournal.org]

1. Tax Sale Mechanics

  • What is sold: lien certificate (certificate of purchase / “CP”).
  • Bidding method: bid-down interest — the lien is struck to the bidder willing to accept the lowest interest rate, starting at the 16% statutory ceiling and bid downward (0–16%). Liens not sold are “struck to the state” and bear 16%. [Source: azleg.gov §42-18053; Pima/Pinal treasurer booklets]
  • Interest / penalty: 16% per year, simple, from the date of delinquency until paid (A.R.S. § 42-18053(A)); the CP earns interest at the bid rate (≤16%) from the first day of the month following purchase. Statutory max = 16%. [Source: azleg.gov §42-18053]
  • Minimum bid composition: delinquent taxes + accrued interest at 16% + penalties + statutory fees/costs of sale. [Source: azleg.gov §42-18053; county treasurer booklets]
  • Sale frequency: annual.
  • Typical month: February (statutory tax-lien sale season).
  • Venue: both, predominantly online in larger counties.
  • Platform vendors: county-contracted online auction platforms (e.g., RealAuction-type systems used by Maricopa/Pima). (specific vendor per county — see needs_verification.)
  • Registration / deposit: bidder registration and a deposit are required before the online sale; terms set per-county. (exact deposit % — needs_verification.)
  • Subsequent taxes (“subs”): the CP holder may pay subsequent years’ taxes and endorse them on the certificate; subs earn interest at the same rate stated on the CP and are added to the redemption amount. [Source: azleg.gov §42-18121 / redemption-amount statutes; county booklets]

2. Right of Redemption → see right-of-redemption

  • Pre-sale right: the owner may pay delinquent taxes any time before the lien is sold (i.e., the lien sale itself is avoidable by paying). [Source: Title 42 Ch. 18 framework]
  • Post-sale period: 3 years from the date of the tax-lien sale; redemption remains available even after 3 years until a treasurer’s deed is delivered to the CP holder or the right is foreclosed by judgment (A.R.S. § 42-18152). Foreclosure of redemption may be commenced only after the 3-year mark and must be filed within 10 years of the month the lien was acquired (A.R.S. § 42-18201). [Source: azleg.gov §42-18152, §42-18201]
  • Who may redeem: the owner; the owner’s agent, assignee, or attorney; any person with a legal or equitable interest in the property (including a holder of a CP of a different date); a person paying as a charitable gift on the owner’s behalf; a partial-interest owner may redeem proportionally (A.R.S. § 42-18151). [Source: azleg.gov §42-18151]
  • Amount formula: the price the lien sold for + interest at the CP rate + all subsequent taxes the CP holder paid + interest on those subs at the CP rate
    • statutory fees/costs. [Source: azleg.gov §42-18053 + redemption-amount statutes]
  • Premium to certificate holder: none beyond statutory interest (the “premium” is the bid-down interest the CP holder earns; max 16%).
  • Procedure: redeem through the county treasurer, who issues a certificate of redemption; if foreclosure is pending, redemption may occur any time before judgment is entered (and the redeeming party served personally or by publication is liable for the plaintiff’s costs and reasonable attorney fees). [Source: azleg.gov §42-18204 (redemption before judgment)]
  • Extinguishment: the right to redeem is cut off by the judgment foreclosing the right to redeem (A.R.S. § 42-18204) and delivery of a treasurer’s deed (or, where an excess-proceeds sale is ordered, by that sale).
  • Special tolling: general civil disability/tolling principles may apply (minors, incompetents); SCRA protections apply to servicemembers. (state-specific tolling for tax-lien redemption — needs_verification.)

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

(A) Tax-lien foreclosure surplus (Title 42). Historically, foreclosure of the right to redeem vested the entire parcel in the CP holder, generating no surplus for the former owner. Post-Tyler, A.R.S. § 42-18204 now provides:

  • Belongs to: former property owner (priority_waterfall for lienholders first, then owner).
  • Mechanism: a property owner whose right to redeem is being foreclosed may request the court to order an excess-proceeds sale. The court shall find such a sale reasonable if the sale price is likely to exceed by more than $2,500 the total of the CP holder’s costs, the lien purchase amount + 16% interest, statutory fees + 16% interest, and other reasonable court-determined fees. [Source: azleg.gov §42-18204]
  • Opening bid: set at the total outstanding costs/fees/interest related to the property. The sale must occur within ~60 days of judgment with recording, posting, publication, certified-mail, and MLS-listing notice; bidders post a 10%/$2,500 deposit. [Source: azleg.gov SB1431 fact sheet]
  • Claim waterfall (per the SB1431 reform / § 42-18204 & Art. 6):
    1. qualified-entity / facilitation costs;
    2. CP holder: filing costs, lien purchase + 16% interest, statutory fees + 16% interest;
    3. other non-state property-tax & encumbrance holders per the title report;
    4. former owner receives the remaining proceeds. [Source: azleg.gov SB1431 fact sheet; §42-18204]
  • Key statutory text: the foreclosure judgment “does not extinguish the property owner’s interest in the excess proceeds from the sale of the property.” [Source: azleg.gov §42-18204]

(B) Trustee’s-sale / mortgage-foreclosure surplus (Title 33). Under A.R.S. § 33-812 the trustee distributes sale proceeds in this order:

  1. costs/expenses of the sale incl. trustee’s fees & reasonable attorney fees;
  2. the secured obligation owed the beneficiary;
  3. other obligations secured by the deed of trust actually paid by the beneficiary;
  4. HOA/condo subordinate liens on written claim;
  5. junior lienholders/encumbrancers in order of priority, then the trustor / current record owner. [Source: azleg.gov §33-812]
  • Filing venue: if claimants conflict, the trustee may deposit the surplus with the county treasurer and file a civil action (naming the treasurer) in Superior Court to determine entitlement. [Source: azleg.gov §33-812]
  • Claim deadline: a person claiming the proceeds must file a response within 45 days of the latest mailing of the application; if a non-party appears to have a superior right, the court shall not order distribution until 180 days after the complaint was filed. [Source: azleg.gov §33-812]
  • Escheat: deposited funds presumed abandoned after 2 years with no pending application transfer to the county general fund (if ≤ 50). [Source: azleg.gov §33-812]
  • Documentation required: application/claim with proof of identity and of the claimant’s interest (deed, lien, assignment, title report). [Source: azleg.gov §33-812 process]
  • Third-party recovery (excess-proceeds finders / recovery agents):
    • fee_cap_pct: (no Arizona statute capping excess-proceeds-finder fees located — needs_verification)
    • licensing_required: (unverified — needs_verification)
    • assignment_of_claim_allowed: yes — Arizona case law recognizes assignees pursuing surplus (see tortosa-homeowners-association-v-garcia-2022, where an assignee of a senior lien (Maricopoly/U.S. Bank) litigated the surplus). [Source: descrybe.ai / Sammartino summary of Tortosa]
    • cooling_off_period / contract_disclosure_rules / prohibited_practices: (no specific Arizona excess-proceeds-finder consumer-protection statute located — needs_verification)
    • citation: A.R.S. § 33-812 (claim process); (finder-specific regulation — needs_verification)
  • Notice to former owner required? Yes — for tax excess-proceeds sales, certified-mail + recording/posting/publication notice (A.R.S. § 42-18204 / SB1431); for trustee-sale surplus, the application-and-response procedure of A.R.S. § 33-812 with mailed notice to interested parties. [Source: azleg.gov §42-18204, §33-812]

4. Mortgage Foreclosure

  • Process: both; non-judicial trustee’s sale (A.R.S. § 33-807) is the norm.
  • Timeline: trustee records a notice of trustee’s sale (A.R.S. § 33-808); the power of sale may not be exercised before the 91st day after recording the notice (A.R.S. § 33-807 / § 33-808) — i.e., ~90-day minimum. [Source: azleg.gov §33-807, §33-808]
  • Reinstatement right: yes — the trustor may cure the default (pay the arrears, trustee’s fees, and statutory costs, not the full accelerated balance) up to 5:00 p.m. on the last business day before the sale (A.R.S. § 33-813). [Source: azleg.gov §33-813]
  • Redemption after sale: none after a trustee’s sale — the sale is final, no statutory post-sale redemption. (Statutory post-sale redemption exists only after a judicial foreclosure/execution sale under Title 12.) [Source: trustee-sale statutory scheme, Title 33 Ch. 6.1]
  • Deficiency judgment: allowed within 90 days of the trustee’s sale (A.R.S. § 33-814(A)), measured as debt minus the greater of fair market value or the sale price (fair-value offset). Anti-deficiency bar: for residential property of 2.5 acres or less used as a single one- or two-family dwelling sold by trustee’s sale, no deficiency action lies (A.R.S. § 33-814(G)); a parallel purchase-money judicial bar exists at A.R.S. § 33-729. The fair-value protection cannot be waived (Arizona Supreme Court). [Source: azleg.gov §33-814]
  • One-action rule: Arizona has anti-deficiency limits but is not a strict one-action state in the California sense. (precise one-action characterization — needs_verification)
  • Surplus distribution: per A.R.S. § 33-812 (see Module 3B).
  • Sale officer: trustee (non-judicial); sheriff (judicial/execution).

5. Sale Procedure Playbooks

  • Treasurer / tax-collector tax-lien sale — ordered steps → see treasurer-sale
    1. Treasurer publishes the delinquent list (statutory publication).
    2. February online/in-person auction; bidders register & deposit.
    3. Bid-down interest from 16%; lowest-rate bidder wins the CP. Unsold liens struck to the state at 16%.
    4. CP holder may pay & endorse subsequent taxes (“subs”).
    5. Owner may redeem through the treasurer within 3 years (or until deed/ judgment).
    6. After 3 years, CP holder sends § 42-18202 notice (certified mail, 30–180 days pre-suit), then files the § 42-18201 action to foreclose.
    7. Court enters judgment foreclosing redemption (§ 42-18204) → treasurer’s deed unless the owner obtains an excess-proceeds sale order. [Source: azleg.gov §42-18053, §42-18152, §42-18201, §42-18202, §42-18204]
  • Sheriff / trustee sale — ordered steps → see sheriff-sale
    1. Default → lender/trustee records notice of trustee’s sale (§ 33-808).
    2. Mail/post/publish notice; ≥ 91 days before sale (§ 33-807/§ 33-808).
    3. Trustor may reinstate until 5 p.m. the day before sale (§ 33-813).
    4. Auction; trustee’s deed to highest bidder; no post-sale redemption.
    5. Proceeds distributed per § 33-812; surplus deposited with treasurer if contested. [Source: azleg.gov §33-807, §33-808, §33-812, §33-813]
  • Notice requirements: tax-lien foreclosure pre-suit notice by certified mail, 30–180 days before filing (§ 42-18202); trustee’s sale notice recorded
    • mailed + posted + published per § 33-808/§ 33-809. [Source: azleg.gov §42-18202, §33-808]
  • Upset bid / confirmation: none for trustee’s sales (sale is final, no judicial confirmation); tax-foreclosure judgments are entered by the court.
  • Payment terms: trustee’s-sale bidders pay per the notice terms (cash/certified funds, typically by the next business day); tax excess-proceeds-sale bidders post 10%/$2,500 deposit, balance by 5 p.m. next business day. [Source: azleg.gov SB1431 fact sheet]
  • Deed issued: treasurer’s deed (tax foreclosure, no warranty / quitclaim- quality) or trustee’s deed (mortgage), conveying the interest foreclosed; no statutory warranty of title.

6. Due Process & Notice → see due-process-notice

  • Standard: notice “reasonably calculated” to apprise the owner (mullane-v-central-hanover), with actual mailed notice to record interest-holders (mennonite-v-adams) and additional reasonable steps when mail is returned (jones-v-flowers).
  • Arizona application: the § 42-18202 pre-foreclosure notice is jurisdictional — advanced-property-tax-liens-v-othon-2021 (Ct. App.) held a court may not enter a foreclosure judgment unless the CP holder sent the required notice, and that when certified mail is returned unclaimed the holder must make a “genuine investigation” to locate the owner, not a nominal attempt. On review, the Arizona Supreme Court (2023) held that a party who never recorded its deed could not collaterally attack the underlying default foreclosure judgment in a later quiet-title action — limiting who and when the notice defect can be raised. [Source: findlaw / azfreenews Othon coverage]
  • Substantial vs. strict compliance: dupont-v-reuter (Ct. App.) held that serving the § 42-18202 notice by regular instead of certified mail was an “insubstantial failure” (relying on § 42-18101(B)) that did not void the judgment/treasurer’s deed — i.e., not every statutory deviation is fatal. [Source: azesquire.com (Fleishman Law) Othon/DuPont analysis]
  • Consequence of defective notice: voidable (the judgment may be set aside / deed cancelled) — but only an insubstantial failure is excused, and collateral attack is constrained per Othon (2023).
  • Leading cases: advanced-property-tax-liens-v-othon-2021, advanced-property-tax-liens-v-othon-2023, dupont-v-reuter, mullane-v-central-hanover, mennonite-v-adams, jones-v-flowers, tyler-v-hennepin-county.

7. Title & Marketability

  • Deed warranty level: treasurer’s deed / trustee’s deed convey without warranty (quitclaim-quality); buyer takes the interest foreclosed.
  • Marketable immediately? No — a treasurer’s-deed grantee typically needs to quiet title before the property is readily insurable/marketable; title underwriters commonly require it. (insurer practice — needs_verification.)
  • Quiet title required? Practically yes for tax-deed parcels.
  • SOL to challenge the deed: tax-foreclosure judgments are subject to the collateral-attack limits in Othon (2023) and Rule 60 / statutory limits. (precise statute-of-limitations to attack a treasurer’s deed — needs_verification.)
  • Title insurance availability: generally limited until quiet-title judgment for tax-deed parcels; available post-quiet-title.
  • Common defects: defective/insubstantial-vs-substantial § 42-18202 notice, unrecorded interests (cf. Othon), missed lienholders, redemption disputes, open junior liens after trustee’s sale (which survive only as to surplus, not the parcel).

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
advanced-property-tax-liens-v-othon-2021 (252 Ariz. 206, 501 P.3d 249, App. Div. 2; docket 2 CA-CV 2021-0001)2021due_process / sale_procedure§ 42-18202 pre-foreclosure notice is jurisdictional; a court can’t enter a foreclosure judgment without it, and when certified mail is returned the CP holder must make a genuine investigation to find the owner.https://caselaw.findlaw.com/court/az-court-of-appeals/2149866.html
advanced-property-tax-liens-v-othon-2023 (255 Ariz. 60, Ariz. Sup. Ct.; docket CV-21-0277-PR)2023due_process / redemptionA grantee who never recorded its deed may not collaterally attack the default judgment foreclosing the right to redeem in a later quiet-title action.https://caselaw.findlaw.com/court/az-supreme-court/2197345.html
dupont-v-reuter (Ariz. Ct. App.)~2008due_process / sale_procedureServing the § 42-18202 notice by regular mail rather than certified mail was an “insubstantial failure” that did not void the foreclosure judgment / treasurer’s deed.https://azesquire.com/tax-lien-foreclosures-strict-compliance-is-out/
tortosa-homeowners-association-v-garcia-2022 (Ariz. Ct. App. Div. 2; docket 2 CA-CV 2021-0114)2022surplusForeclosure-terminated liens attach to the surplus in their pre-foreclosure priority; a senior lienholder unaffected by a junior foreclosure is not entitled to the excess proceeds — surplus flows to junior lienors then the owner.https://descrybe.ai/case-details/c7852955
tyler-v-hennepin-county (598 U.S. 631, U.S. Sup. Ct.)2023surplus / due_processRetaining surplus equity beyond the tax debt is an unconstitutional taking — the landmark Arizona’s § 42-18204 excess-proceeds amendment responds to.https://arizonastatelawjournal.org/2023/10/31/tyler-v-hennepin-county-implications-for-arizona-tax-foreclosure-law/

9. Edge Cases (state-specific notes)

  • bankruptcy-automatic-stay — a Chapter 7/13 filing stays both a § 42-18201 tax-foreclosure action and a § 33-807 trustee’s sale; the 3-year redemption / 10-year foreclosure clocks get a statutory 12-month extension where law or court order barred the action (§ 42-18201). [Source: azleg.gov §42-18201]
  • federal-tax-lien-redemption — the IRS holds a 120-day right to redeem after a sale where a federal tax lien is junior (26 U.S.C. § 7425); state procedure must give the U.S. notice. (interaction with AZ trustee sale — needs_verification.)
  • heirs-property — fractional/heir owners may redeem proportionally under A.R.S. § 42-18151(B). [Source: azleg.gov §42-18151]
  • hoa-super-priority — Arizona HOA assessment liens are not super-priority over a first mortgage in the Nevada sense; HOA-foreclosure surplus follows § 33-812 priority (see Tortosa). [Source: azleg.gov §33-812; Tortosa]
  • anti-deficiency — § 33-814(G) bars deficiency on residential ≤2.5-acre one/two-family dwellings sold by trustee’s sale; fair-value protection is non-waivable. [Source: azleg.gov §33-814]
  • void-vs-voidable — defective tax notice renders a foreclosure judgment voidable, but only a substantial failure matters (DuPont) and collateral attack is limited (Othon 2023).

10. Operations

  • Where records live: county Recorder (deeds, deeds of trust, notices of sale), county Treasurer (tax liens, CPs, redemptions, surplus deposits), Superior Court (foreclosure / surplus actions), Arizona Dept. of Revenue (unclaimed property / escheated surplus > $50).
  • Public portals: county treasurer tax-lien sale sites (Maricopa: treasurer.maricopa.gov; Pima: to.pima.gov; Pinal: treasurer.pinal.gov); azcourts.gov for opinions; azleg.gov for statutes; azdor.gov for unclaimed property.
  • Typical costs: filing/recording fees; trustee’s fees & attorney fees come off the top of trustee-sale proceeds (§ 33-812); tax excess-proceeds sale charges facilitation/qualified-entity costs first (SB1431).
  • Typical timelines: tax lien → 3-year redemption hold before foreclosure; foreclosure must be filed within 10 years; trustee’s sale ≥ ~90 days from notice; trustee-sale surplus claims: 45-day response / 180-day superior- rights hold; surplus escheat after 2 years.
  • Key agencies: County Treasurers, County Recorders, Arizona Superior Court, Arizona Department of Revenue.
  • Useful forms: certificate of purchase; certificate of redemption; § 42-18202 notice of intent to foreclose; notice of trustee’s sale (§ 33-808); § 33-812 application for release of surplus.

11. Meta

Legal information, not legal advice. This page summarizes Arizona statutes and case law as of the last_verified date and may be incomplete or out of date. Verify against the cited primary sources and consult a licensed Arizona attorney before acting.

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