By Jones Osborn II

A lien is a legal device to provide security for the payment of a debt or the performance of an obligation by means of a claim against certain specified property. If the obligation is not timely satisfied, the holder of the lien can force the property to be sold. The proceeds are then applied in satisfaction of the obligation.

A judgment lien is a special type of lien. It is known as a "non-consensual" lien; that is, it can be created without the consent of the owner of the property. A consensual lien, such as a mortgage, can only be created with the consent and cooperation of the owner.

How Created. A judgment lien first requires, as you might expect, a judgment. In most cases, a judgment is a final court order directing someone (the debtor) to pay someone else (the creditor) a certain amount of money. However, a judgment does not by itself create a judgment lien. In order to create a judgment lien, a certified copy of the judgment and certain additional information must be recorded with the County Recorder. A.R.S. § 33-961. When recorded, it automatically creates a judgment lien on all real property, then owned or later acquired by the debtor in that county. If the creditor wants to create a lien in other counties, he must file in those counties also. If he wishes to create a judgment lien in another state, he must take the Arizona judgment to the other state and have it "domesticated," which means it becomes recognized as a judgment in that other state. After domestication a judgment lien can then be created in the additional state by making the appropriate filings.

After the lien has attached to a particular parcel of real property, the judgment creditor can file suit to foreclose his lien, just as if it were a mortgage. It is as if the judgment debtor gave the judgment creditor a mortgage on every piece of real property he owns in every county where the lien is recorded. Clearly, judgment liens are a great aid in collecting judgments, at least from people who own property.

As mentioned above, the judgment lien attaches to real property of the debtor, even if acquired at a later time. It attaches automatically at the instant the debtor takes title, and it remains attached to the property even after the debtor conveys it to someone else. This is one reason title searches and title insurance are necessary whenever real property is purchased. Someone purchasing property which is subject to a judgment lien could be forced to pay a judgment against a third party to protect his property even if he had no knowledge of the lien.

Priority. The lien is subordinate to all previously existing liens. That means that if the property is foreclosed, the prior liens would be paid first out of the proceeds. By the same token, a judgment lien is superior to any lien that attaches at a later time. The only possible exception to this rule of priority is where a judgment debtor obtains a mortgage to finance the purchase of property. In this case, the law says that the holder of the purchase money mortgage or deed of trust has priority over the judgment creditor even if the purchase money mortgage is recorded later. A.R.S. § 33-705.

How Long Does It Last? A judgment (and therefore a judgment lien) lasts for only five years (the exception being a judgment lien for spousal support, which lasts until the support obligation is completely satisfied). A.R.S. §33-964. At the end of five years the judgment and the judgment lien automatically expire. However, both can be renewed for any number of additional five year periods by filing certain documents with the clerk of the court and the county recorder. A.R.S. § 12-1613. This must be done no earlier than 90 days before the expiration date of the existing judgment. Therefore, if you hold an unsatisfied judgment, be sure to docket the renewal date so your judgment and judgment lien don't inadvertently expire. In many cases an unpaid judgment is satisfied years later when the judgment debtor attempts to purchase, sell or obtain a loan against real property. A title search discloses the lien, and the judgment debtor is forced to pay the judgment if he wants to conclude the transaction.

Conclusion. The judgment lien statute is an important aid to creditors who are trying to collect a judgment against uncooperative debtors, because it automatically creates a lien on all real property. However, it can also pose a great danger to those purchasing or lending against real property unless proper title searches are performed and title insurance is purchased.