Ariz. Rev. Stat. § 33-1256 – Common expense liens; priority; mechanics' and materialmen's liens; notice; applicability

A. The association has a common expense lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association's common expense lien may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the unit owner has been and remains delinquent in the payment of assessments, for a period of one year or in the amount of $1,200 or more, whichever occurs first, as determined on the date the action is filed. The association board of directors shall exercise reasonable efforts to communicate with the unit owner and offer a reasonable payment plan before filing a foreclosure action. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.
B. Notwithstanding any provision in the condominium documents, unit owner expenses are not enforceable as common expense liens under this section. The association has a lien for unit owner expenses after the entry of a judgment in a civil suit for those unit owner expenses from a court of competent jurisdiction and the recording of that judgment in the office of the county recorder as otherwise provided by law. The association's judgment lien for unit owner expenses may not be foreclosed and is effective only on conveyance of any interest in the real property.
C. A common expense lien under this section is prior to all other liens, interests and encumbrances on a unit except:
1. 1. Liens and encumbrances recorded before the recordation of the declaration.
2. 2. A recorded first mortgage on the unit, a seller's interest in a first contract for sale pursuant to chapter 6, article 3 of this title on the unit recorded before the lien arising pursuant to subsection A of this section or a recorded first deed of trust on the unit.
3. 3. Liens for real estate taxes and other governmental assessments or charges against the unit.
D. Subsection C of this section does not affect the priority of mechanics' or materialmen's liens. The common expense lien under this section is not subject to chapter 8 of this title.
E. Unless the declaration otherwise provides, if two or more associations have common expense liens created at any time on the same real estate, those liens have equal priority.
F. Recording the declaration constitutes record notice and perfection of the common expense lien. Further recordation of any claim of common expense lien under this section is not required.
G. A common expense lien is extinguished unless proceedings to enforce the lien are instituted within six years after the full amount of the assessments becomes due.
H. This section does not prohibit:
1. 1. Actions to recover sums for which subsection A or B of this section creates a lien.
2. 2. An association from taking a deed in lieu of foreclosure.
I. A judgment or decree in any action brought under this section may include costs and reasonable attorney fees for the prevailing party.
J. The association on written request shall furnish to a lienholder, escrow agent, unit owner or person designated by a unit owner a statement setting forth the amount of any unpaid liens prescribed by subsection A or B of this section against the unit. The statement shall be furnished within ten days after receipt of the request. The statement is binding on the association if the statement is requested by an escrow agency that is licensed pursuant to title 6, chapter 7. Failure to provide the statement to the escrow agent within the time provided for in this subsection extinguishes any lien for any unpaid assessment then due.
K. Notwithstanding any provision in the condominium documents or in any contract between the association and a management company or any other agent of the association, including any agreement or contract with any attorney, unless the unit owner directs otherwise, all payments received on a unit owner's account shall be applied first to any unpaid assessments, due but not delinquent assessments, unpaid charges for late payment of those assessments if authorized in the declaration, unpaid reasonable collection fees and costs incurred or applied by the association and unpaid attorney fees and costs incurred with respect to those assessments if awarded by a court, in that order, with any remaining amounts applied next to other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.
L. For a delinquent account for unpaid common expense liens, the association shall provide the following written notice to the unit owner at the unit owner's address as provided to the association at least thirty days before authorizing an attorney, or a collection agency that is not acting as the association's managing agent, to begin collection activity on behalf of the association:
Your account is delinquent. If you do not bring your account current or make arrangements that are approved by the association to bring your account current within thirty days after the date of this notice, your account will be turned over for further collection proceedings. Such collection proceedings could include bringing a foreclosure action against your property.
The notice shall be in boldfaced type or all capital letters and shall include the contact information for the person that the unit owner may contact to discuss payment. The notice shall be sent by certified mail, return receipt requested, and may be included within other correspondence sent to the unit owner regarding the unit owner's delinquent account.
M. Except for condominiums that have fewer than fifty units and that do not contract with a third party to perform management services on behalf of the association, the association shall provide a statement of account in lieu of a periodic payment book to the unit owner with the same frequency that assessments are provided for in the declaration. The statement of account shall include the current account balance due and the immediately preceding ledger history. If the association offers the statement of account by electronic means, a unit owner may opt to receive the statement electronically. The association may stop providing any further statements of account to a unit owner if collection activity begins by an attorney, or a collection agency that is not acting as the association's managing agent, regarding that unit owner's unpaid account. After collection activity begins, a unit owner may request statements of account by written request to the attorney or collection agency. Any request by a unit owner for a statement of account after collection activity begins by an attorney or a collection agency that is not acting as the association's managing agent must be fulfilled by the attorney or the collection agency responsible for the collection. The statement of account provided by the attorney or collection agency responsible for the collection shall include all amounts claimed to be owing to resolve the delinquency through the date set forth in the statement, including attorney fees and costs, regardless of whether such amounts have been reduced to judgment.
N. An agent for the association may collect on behalf of the association directly from a unit owner the assessments and other amounts owed by cash or check, by mailed or hand-delivered bank drafts, checks, cashier's checks or money orders, by credit, charge or debit card or by other electronic means. For any form of payment other than for cash or for mailed or hand-delivered bank drafts, checks, cashier's checks or money orders, the agent may charge a convenience fee to the unit owner that is approximately the amount charged to the agent by a third-party service provider. The association may not transfer ownership or control of debt for common expense liens or unit owner expenses.
O. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.