Proposition 209 the “Predatory Debt Collection Protection Act” (Arizona Petition I-05-2022) is a statewide ballot initiative that if passed will virtually eliminate an HOA’s ability to garnish an HOA member’s wages or bank account (one of the primary methods by which unpaid assessments are recovered).
Prop 209 if passed, is likely to result in:
- A spike in delinquency rates with the disincentive of wage and bank garnishment being removed from almost half the population.
- More HOA members losing their homes to HOA assessment lien foreclosure, as HOA’s turn to foreclosure as an alternative primary means of collection of unpaid assessments.
- Higher collection related expenses, as HOA assessment lien foreclosure typically involves more costs and steps than the garnishment process.
- Longer recovery times – as HOA assessment lien foreclosure typically takes longer to accomplish than garnishment; and
- HOA members paying higher assessments, as HOA’s find the need to increase assessments to account for the increased collection related expense as well as risk that the HOA may not recover all of its delinquent assessments.
For all of the above reasons, we encourage voters to vote “no” on Prop 209.
- Download the full PDF resource guide here.
- A copy of Prop 209 is attached. See also: https://azsos.gov/sites/default/files/prop_209_ballot_format_language.pdf
The following table summarizes Prop 209’s potential impact on wage garnishment, bank garnishment and the homestead exemption.
Please feel free to call any attorney at Carpenter, Hazlewood, Delgado & Bolen if you have any questions.
1 The amount by which disposable earnings exceed sixty times (it is currently thirty times) the minimum wage.
2 https://www.phoenix.gov/econdevsite/Documents/Population%20Demographics%20Insert.pdf
The information contained in this article is not intended to be legal advice and is provided for educational purposes only.
