Page 14 May 2013 Walking away from home loan may bring problems Jonathan Hasebe By Jonathan T. Hasebe When walking away from a home that is underwater, one important factor homeowners will need to think about is whether there will be any personal liability on the homeowner for a de fi ciency judgment with respect to the loan. Arizona is an anti-de fi ciency state. The state Legislature has adopted statutes that protect homeowners from personal exposure to a de fi ciency judgment in most cases. The general rule in Arizona for mortgages (under A.R.S. 33-729 (A)) and deeds of trust (A.R.S. 33-814 (G)) is that lenders are prohibited from pursuing a de fi ciency judgment against a borrower in the event that proceeds from the sale of the property securing the indebtedness are not suf fi cient to pay the entire debt provided that the encumbered property consists of less than 2 ½ acres and is used as either a one- or two-family dwelling. Additionally, the statutes require the mortgage or deed of trust must have been “given to secure the payment of the balance of the purchase price.” Thus, while “purchase money” loans will fall under these statutes, a home equity line of credit would not. Arizona homeowners seeking protection from the anti-de fi ciency statutes often have a number of questions that apply to their unique circumstances. Do these statutes apply to a re fi nance of a purchase money loan? Does a “dwelling” include a vacation home or a home used for investment purposes? In reviewing these questions, Arizona courts have answered Continued on page 15 Religious Instruction • Strong Academics • Religious Instruction • Strong Academics • Cutting Edge Technology Cutting Edge Technology Leadership Programs • PE and Interscholastic Sports • Instrumental and Vocal Music Leadership Programs • PE and Interscholastic Sports • Instrumental and Vocal Music “Arts Attack” Program • School Nurse • Bus Transportation Available “Arts Attack” Program • School Nurse • Bus Transportation Available Visit our Website for Summer Camp Opportunities for Summer Camp Opportunities for Kids of all Ages for Kids of all Ages (3 years - 18 years!) (3 years - 18 years!) We’re Adding New Classrooms! We’re Adding New Classrooms! 3901 East Indian School Road • 602-957-7010 • www.clsphx.org CHRIST LUTHERAN SCHOOL Christian Values. Quality Education. Preschool through Grade 8 What’s a Domestic Partnership Agreement? Domestic Partners is a term used today to refer to people who live together but who are not married. Today, many older adults live with a brother or a sister, and they would be considered Domestic Partners. Domestic Partners also include same sex couples or nonmarried, heterosexual couples. Domestic Partners usually are very close to each other and know the wishes of the other. A Domestic Partnership Agreement or Property Agreement can set out the partners’ desires about shared living expenses, property ownership and estate planning. Without a Domestic Partner Agreement, family members may get involved and try to prevent a partner from living in the other’s home or using assets as the partners had desired. The Domestic Partner Agreement can put both partners at ease that their agreement to share expenses and care for each other is binding. Domestic Partners can also confer legal rights on each other with powers of attorney for fi nances and health. Contact Sharon D. Ravenscroft, Esq. (623) 815-7451 1850 N. Central Ave. Suite 2400 Phoenix, Arizona 85004 13250 N. Del Webb Blvd. Suite B Sun City, AZ 85351 WILLS ~ TRUSTS ~ ESTATE PLANNING ~ PROBATE PRE-MARITAL AND DOMESTIC PARTNERSHIP AGREEMENTS Sharon D. Ravenscroft The Cavanagh Law Firm, P.A. To Find Out More, Visit or E-Mail: sharonravenscroft.com • sravenscroft@cavanaghlaw.com What’s a Domestic Partnership Agreement? Domestic Partners is a term used today to refer to people who live together but who are not married. Today, many older adults live with a brother or a sister, and they would be considered Domestic Partners. Domestic Partners also include same sex couples or nonmarried, heterosexual couples. Domestic Partners usually are very close to each other and know the wishes of the other. A Domestic Partnership Agreement or Property Agreement can set out the partners’ desires about shared living expenses, property ownership and estate planning. 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Page 15 May 2013 Hasebe Continued from page 14 in the af fi rmative while broadly applying the anti-de fi ciency statutes. In Bank One, Arizona, N.A. v. Beauvais , 934 P.2d 809, 810 (Ariz. Ct. App. 1997), the Court of Appeals of Arizona held that a “workout note” taken out by a borrower subsequent to the original loan did not result in the loan losing its character as a purchase-money obligation. Applying the public policy behind the initial passage of the anti-de fi ciency statutes, the court held that a homeowner should not have to face opening itself up to personal liability merely by re fi nancing the home loan. Courts have also broadly applied the anti-de fi ciency statutes in regards to whether the statutes apply to vacation or investment homes. In Northern Arizona Properties v. Pinetop Properties Group , 151 Ariz. 9, 725 P.2d 501 (Ariz. App. 1986), the Court of Appeals of Arizona held that that even an investment condominium not used as a permanent residence for anyone, including the borrower, satis fi ed the dwelling requirement because it was still a “shelter in which people live.” Although enacted more than 40 years ago, Arizona’s anti-de fi ciency statutes continue to evolve. Some recent Arizona decisions, including M&I Marshall & Ilsley Bank v. Mueller , 228 Ariz. 478 (2011), Helveta Servicing, Inc. v. Pasquan , 229 Ariz. 493 (2012), and Independent Mortgage Company v. Alaburda , 230 Ariz. 181 (2012) demonstrate that the courts continue to fi ne tune the application of these statutes. Jonathan T. Hasebe, associate, practices general commercial litigation at Gallagher & Kennedy P.A. The Desert Botanical Garden will again offer its popular summer Flashlight Tours on Thursdays and Saturdays from May 30– August 31. All tours begin at 7 p.m. Flashlight Tours are included with Garden membership or with paid Garden admission. For more information, call 480-941-1225. Due 4/30 FIRST BIRTHDAY CAKE / SUBMIT ENTRIES AT ARCADIAPIX.COM ARCADIA NEWS PHOTO CONTEST $299 Toilet Replacement Please Call for Details. Expires 5/31/13 $69 Drain Clean Hurry! Offer expires 5/31/13 ANY DRAIN THROUGH AN ACCESSIBLE CLEAN- OUT In-Line Camera Drain Inspection WITH ANY MAIN DRAIN LINE CLEANING SERVICE. SENIOR / MILITARY 15% Discount Please Call for Details. Expires 5/31/13 free! Expires 5/31/13 Serving the Arcadia Area 602.457.6216 MrRooterAZ.com ROC #s 114708-114709 This is old, orange burgh bituminized fiber sewer line that has failed. See how brittle it is? Our Trench-Less sewer line replacement method. This homeowners sewer line ran under the pool and we only needed to dig one small pilot hole to replace the entire line which was 65’ long. Our competitor’s replacement method h ld b h There’s a reason they call us MR MR. Rooter Plumbing is LOCAL and located in the heart of Arizona. We are the sewer and drain cleaning professionals of Arcadia. MR. Rooter is a full service plumbing company that specializes in sewer and drain issues as well as water treatment issues. MR. Rooter Plumbing has you covered coming and going “if water runs through it, we do it”. g the Arcadia Area rough it, we do it”. All that’s needed is an active checking account and a valid drivers license. We offer plans for 3,6 and 12 Months up to $5,000.00 dollars. NO CREDIT FINANCING Neil Germundson Toyota Fleet Manager NeilG@RightToyota.com 7701 E. Frank Lloyd Wright Blvd. Scottsdale AZ, 85260 480-778-2200 Contact Neil today for your friendly neighborhood discount! Contact Neil today for your friendly neighborhood discount! 7875 E. Frank Lloyd Wright Blvd. Scottsdale AZ, 85260 480-778-2440 Craig Thorpe Honda Fleet Manager CThorpe@RightHonda.com Contact Craig today for your friendly neighborhood discount! Happy Mothers Day, Arcadia!