Arizona Court of Appeals Division One holds that the prohibition on groundless encumbrances in A.R.S. § 33-420 refers only to documents that assert a non-ownership interest in another person’s real property.

A couple executed and recorded affidavits alleging that their neighbors were in violation of the subdivision’s CC&Rs.  The neighbors sued, alleging that the affidavits asserted groundless encumbrances against their properties, in violation of A.R.S. § 33-420.  The superior court held for the neighbors.  The Court of Appeals reversed. 

Section 33-420 prohibits a person from knowingly recording or failing to correct a document asserting a groundless “encumbrance” against real property.  The Court determined that, based on its technical meaning in the context of property law, the statutory word “encumbrance” means a non-ownership interest in property, such as a lien securing a debt.  The affidavits did not purport to claim any interest in or liability against the neighbors’ properties; instead, they merely alleged that the neighbors’ properties were not in compliance with the CC&Rs.  The Court therefore held that the affidavits were not encumbrances and that the couple did not violate § 33-420 by executing and recording them.

Judge Perkins delivered the opinion of the court; Judges Johnsen and Cattani joined.