On behalf of Jeff Neff of Neff & Boyer, P.C. posted in Real Estate Law on June 30, 2016 by
Arizona law generally prohibits lenders from suing borrower for loans used to pay for residential real property in Arizona. But what amounts are included? The Arizona Court of Appeals in First Financial Bank v. Claassen has answered some of these questions.
A borrower defaulted on a home loan and the property was worth less than the amount owed. The Arizona Court of Appeals has held that funds commonly associated with home construction such as accrued interest, later fees and construction deposits are commonly associated with home construction loans and therefore, qualify for anti-deficiency protection. For those of us who practice real estate law in Arizona this is helpful in clarifying the law in this area.