Arizona Post-Tyler Legislative Update (HB 2780)
Arizona Post-Tyler Legislative Update (HB 2780)
Arizona's Governor signed HB 2780, a technical corrections bill that the NTLA actively supported to strengthen Arizona's post-Tyler v. Hennepin County tax lien foreclosure framework.
NTLA Executive Summary – Arizona Post-Tyler Legislative Update (HB 2780)
On June 22, 2026, Arizona's Governor signed HB 2780, a technical corrections bill that the NTLA actively supported to strengthen Arizona's post-Tyler v. Hennepin County tax lien foreclosure framework.
Following the state's 2024 legislative reforms, Arizona established an innovative third enforcement option that combines elements of a traditional tax lien foreclosure with a court-ordered execution sale. This approach was designed to accomplish three key objectives:
- Ensure compliance with the Tyler decision by providing delinquent property owners the opportunity to receive any excess proceeds generated from the sale of their property.
- Preserve a healthy and competitive tax lien market by fully reimbursing investors for eligible foreclosure and sale costs while recalculating interest on the tax lien investment at the statutory maximum rate of 16%.
- Deliver marketable, title-insurable property by extinguishing redemption rights and clearing qualifying state liens and encumbrances through the execution sale process.
Under This Framework
The tax lien investor is entitled to credit bid the amount awarded in the judgment. If no higher bid is received, the purchaser acquires title through the execution sale with qualifying state liens removed that otherwise could not be eliminated through a conventional tax lien foreclosure.
HB 2780 makes several important technical corrections to the 2024 legislation by resolving statutory reference errors and clarifying the calculation of judgments and procedural timelines. These changes eliminate ambiguities that could have impaired implementation of the new process and provide greater certainty for courts, investors, and title insurers.
Most significantly for NTLA members, HB 2780 extends the excess proceeds execution sale option directly to the investor-plaintiff. This provides investors with an additional strategic alternative in cases involving significant state liens or encumbrances that cannot otherwise be extinguished through a traditional foreclosure. Investors may also elect this process when recovering their investment with statutory interest of up to 16% is more advantageous than taking title to the property.
Legislation Becomes Effective September 11, 2026
This represents another significant step in Arizona's implementation of a tax lien system that balances constitutional compliance with the continued viability and attractiveness of private tax lien investment.