Arizona Real Estate Broker Exam — All Questions

Which encumbrance is monetary rather than non-monetary?

• a.A judgment lien recorded against the owner✓
• b.An encroachment by a neighbour's garden wall
• c.A deed restriction limiting the building height
• d.A utility easement crossing the rear of the lot

Encumbrances divide into those that secure the payment of money and those that restrict use or possession. A judgment lien, a tax lien, a mortgage or deed of trust and a mechanic's lien are monetary, since each can be satisfied by paying. Easements, deed restrictions and encroachments limit how the land may be used or where the boundary effectively lies, and no payment removes them as of right.

Within what period must an Arizona mechanic's lien claimant record the notice and claim of lien under A.R.S. 33-993?

• a.One year after completion, or ninety days after a recorded notice
• b.One hundred twenty days after completion, or sixty after a recorded notice✓
• c.Sixty days after completion, or twenty days after a recorded notice
• d.Ninety days after completion, or thirty days after a recorded notice

A.R.S. 33-993(A) requires a claimant to record the notice and claim of lien 'within one hundred twenty days after completion of a building, structure or improvement, or any alteration or repair,' or, 'if a notice of completion has been recorded, within sixty days after recordation of such notice.' Recording a notice of completion is how an owner shortens the window. A.R.S. 33-998 then gives the lien only six months from recording unless an action to enforce it is brought.

What happens to the Arizona homestead exemption when the homestead is voluntarily sold?

• a.It attaches to identifiable cash proceeds for eighteen months✓
• b.It attaches to the proceeds indefinitely until reinvested
• c.It ends at closing and does not follow the proceeds
• d.It attaches to the proceeds only if a declaration is recorded

A.R.S. 33-1101(C) provides that the exemption 'automatically attaches to the person's interest in identifiable cash proceeds from the voluntary or involuntary sale of the property' and continues 'for eighteen months after the date of the sale of the property or until the person establishes a new homestead with the proceeds, whichever period is shorter.' It does not attach to proceeds from refinancing, and only one homestead exemption may be held at a time. The dollar amount in subsection A is adjusted annually for the cost of living under subsection D.