Arizona Court of Appeals, Division Two affirms that the homestead exemption in ARS § 33-1101, as amended by Prop. 209, applies if the creditor did not initiate a writ action to force a sale of the homestead property prior to December 5, 2022.

Arizona law exempts a homestead’s value from creditors up to a statutory limit. A.R.S. § 33-1101.  In 2022, Proposition 209, the Predatory Debt Collection Protection Act, increased that exemption from $250,000 to $400,000.  Compare former § 33-1101 (version effective Jan. 1, 2022), with § 33-1101 (version currently in effect).  Prop. 209 included a savings clause, specifying that the amendment to ARS 33-1101 “applies prospectively only” and “does not affect rights and duties that matured before the [December 5, 2022] effective date.”

In this case, the judgment creditors obtained a $1.46 million judgment against the judgment debtors in 2016 and recorded it against the judgment debtors’ homestead. However, the judgment creditors did not attempt to force a sale of the homestead property until March 2023—after the new exemption amount took effect. The superior court found that because the judgment creditors had not initiated collection before Prop. 209’s effective date, the judgment creditors’ right to force a sale had not yet matured, and the judgment debtors were entitled to the higher exemption amount.

The Arizona Court of Appeals affirmed. The court relied on Silence v. Betts, which held that Prop. 209 does not retroactively affect matured substantive rights but does apply to collection actions initiated after its effective date. 553 P.3d 192, 196 ¶ 14 (App. 2024).  A judgment lien gives a creditor an interest in the debtor’s property, but the right to enforce that lien through a forced sale is contingent on statutory steps, including obtaining a writ of execution. Because the judgment creditors had not pursued obtaining a writ of execution or completing the statutory preconditions for a sale before Proposition 209 took effect, the judgment creditors’ rights were not mature under Prop. 209’s Saving Clause.

Judge Gard delivered the opinion of the Court, in which Judge O’Neil and Vice Chief Judge Eppich joined.

Posted by: Molly Walker