HOA Super Liens vs. Mortgages: Who Gets Paid First in an Arizona Foreclosure?

This is one of the most-searched questions Arizona HOA boards ask, and most of the answers they find online are wrong. Not technically wrong. State-specific wrong. The articles ranking on "HOA super lien" are mostly written for Florida, Nevada, or Connecticut, all of which have statutes giving HOA liens super-priority status over a first mortgage. Arizona does not.

That single fact changes how an Arizona board should think about collections, foreclosure, and the actual leverage the association has when an owner stops paying. This guide walks through the lien priority rules under A.R.S. § 33-1807 (planned communities) and § 33-1256 (condominiums), what happens to the HOA lien in the two foreclosure scenarios that matter, and what the rules mean for a board's practical collections strategy in 2026.

None of this is legal advice. It is general information for boards and property managers running Arizona community associations. For a specific delinquency case or foreclosure question, contact your association's counsel.

The Short Answer: Arizona Is Not a Super Lien State

Under A.R.S. § 33-1807(B) and § 33-1256(B), an Arizona HOA's lien for unpaid assessments has priority over almost everything except three categories of senior interests.

• Liens and encumbrances recorded before the community's Declaration (CC&Rs) was recorded.

• A recorded first mortgage or first deed of trust on the property.

• Liens for real estate taxes and other governmental assessments against the property.

Practically, the second category is the one that matters. Almost every owner has a first deed of trust on file with the lender that financed the purchase, and that first deed of trust sits ahead of the HOA's lien in priority.

Some other states have changed this rule by statute. Nevada, Florida, and Connecticut each have versions of a "super priority" or "super lien" provision that elevates a portion of the HOA's lien above the first mortgage, usually for a limited dollar amount or a limited number of months of delinquent assessments. Arizona has not adopted that approach. The HOA lien in Arizona is subordinate to the first mortgage, full stop.

Why Boards Care: Two Foreclosure Scenarios

Lien priority becomes practically important in two situations. Both come up regularly.

Scenario 1: The Bank Forecloses First

An owner stops paying both the mortgage and the assessments. The lender notices a trustee's sale on the property and proceeds to foreclosure. What happens to the HOA's lien?

Under Arizona's lien priority rules, when the first deed of trust forecloses, all junior liens, including the HOA's assessment lien, are extinguished by operation of law. The HOA does not get paid from the foreclosure. The new owner (whether the bank, an investor at the trustee's sale, or a third party) takes the property free and clear of the prior owner's HOA debt.

The new owner becomes responsible for assessments accruing after the trustee's sale, but the back assessments owed by the previous owner are gone. The HOA may still hold a personal judgment against the prior owner for the unpaid amount, but collecting on it is a separate exercise from the foreclosure.

There is one important wrinkle. If the trustee's sale generates excess proceeds (the property sells for more than the lender is owed), the surplus does not go back to the prior owner first. It goes to the remaining lienholders in order of priority. After taxes and other governmental assessments, the HOA's claim against the excess proceeds is generally next in line. Communities that ignore the excess proceeds opportunity leave money on the table.

Scenario 2: The Association Forecloses First

Now reverse the scenario. The HOA initiates a foreclosure action under A.R.S. § 33-1807, the owner has been delinquent long enough to meet the statutory threshold, and the case goes to judicial foreclosure. The first deed of trust is still in place. What happens?

The HOA foreclosure does not eliminate the first mortgage. Whoever buys the property at the HOA foreclosure sale takes title subject to the existing first deed of trust. The new owner has to keep paying that mortgage or risk losing the property in a subsequent lender foreclosure.

This creates a structural problem. Investors are reluctant to bid on an HOA foreclosure when a substantial first mortgage is still attached. The pool of buyers shrinks. The community may need to take title itself, manage the property, and either hold or resell it. None of those outcomes look like "collecting the unpaid assessments." They look like a real estate investment the board did not plan to make.

The math changes if the property has no first mortgage. Properties that are owned free and clear (paid-off retirees, inheritance properties, all-cash investor purchases) are the cases where HOA foreclosure works the way boards expect. The association forecloses, the property is sold, and the assessment debt gets paid out of the proceeds. These cases exist but are a small minority of any community's delinquency caseload.

What This Means for Your Collections Strategy in 2026

Combine the lien priority reality with the changes to the foreclosure threshold that took effect in September 2025 under SB 1494 (delinquency must now reach 18 months or $10,000, whichever comes first), and the practical picture for Arizona HOA boards looks like this.

1. Foreclosure has become a narrow remedy. Even when the threshold is met, the HOA lien is junior to the first mortgage in most cases, and the math rarely supports proceeding to a sale. Foreclosure should be treated as a last-resort option for a small subset of cases, not as a routine collections lever.

2. Early collections work matters more than ever. Most of the board's actual leverage lives in the first six to twelve months of delinquency. Proactive contact, payment plans, structured demand letters, and clean documentation are now the primary tools the association has.

3. Track lender foreclosures on delinquent owners. If an owner is delinquent on both the mortgage and the assessments, a lender foreclosure may be coming. The board should be prepared to file an excess proceeds claim quickly when a trustee's sale generates surplus. That money is owed to the association up to the amount of the lien.

4. Identify free-and-clear properties. Properties without a first mortgage are the small but important category where HOA foreclosure can produce a real recovery. Knowing which delinquent owners fall into this category before initiating foreclosure changes the cost-benefit analysis entirely.

5. Pursue personal judgments where appropriate. When a lender foreclosure extinguishes the HOA lien, the underlying debt may survive as a personal obligation of the prior owner. Whether to pursue a personal judgment depends on the amount owed, the owner's collectability, and the cost of the proceeding. This is a case-by-case decision worth taking to counsel.

The Excess Proceeds Opportunity

Of all the scenarios above, excess proceeds claims are the one most boards underuse. Here is why they matter.

When a lender forecloses on an Arizona property through a trustee's sale and the property sells for more than the lender is owed, the surplus is held by the trustee. Junior lienholders, including the HOA, have a statutory right to file a claim against the surplus in order of priority.

The amount available to the HOA is limited to the amount of its perfected lien at the time of the sale (unpaid assessments, late charges, reasonable collection costs, and attorney fees recoverable under the statute). But the recovery is real money that would otherwise be lost when the HOA lien is extinguished. The deadline to file a claim against excess proceeds is short, and the procedural requirements are specific. Communities that do not have a process in place to identify and file these claims promptly are leaving recoverable assessments unclaimed.

This is one of the cleanest examples of where attorney involvement on a transactional basis (not a flat-rate collections file) produces measurable recovery. A board that has not asked its counsel about excess proceeds protocols in the last two years should put that on the agenda for the next meeting.

When to Bring in Counsel

Stratman Law Firm represents community associations, HOA boards, and property managers across Arizona. The firm handles assessment collections, lien enforcement, judicial foreclosure, and excess proceeds claims throughout the state, and helps boards develop realistic collections strategies that account for the actual leverage Arizona law provides.

If your community is sitting on a long-running delinquency, watching a lender foreclosure unfold on a delinquent owner, or trying to decide whether to initiate an HOA foreclosure, schedule a consultation.

For the underlying statutes, see A.R.S. § 33-1807 (planned communities) and A.R.S. § 33-1256 (condominiums).

This article is general information about Arizona HOA lien priority and not legal advice. Reading it does not create an attorney-client relationship with Stratman Law Firm. For advice on a specific delinquency, foreclosure, or excess proceeds matter, contact a licensed Arizona attorney.