Since the downturn in the Arizona real estate market and increase in the number of loan defaults and foreclosures, lenders and borrowers have fought over the interpretation of Arizona’s so-called anti-deficiency statutes.
Disputes between lenders and borrowers have involved, for example, (1) what is a dwelling? (2) does a dwelling have to be someone’s primary residence? (3) what is a purchase money loan? (4) does a construction loan qualify as a purchase money loan? and (5) can an incomplete dwelling still be considered “limited to and utilized for either a single one-family or single two-family dwelling?” This post focuses on the last issue, recently addressed by the Arizona Supreme Court.
But, before addressing that, I will cover the basic requirements to qualify for protection.