The Owner Occupant Exception – When is a Trust a Natural Person?

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A critical question for residential contractors in Arizona is whether a homeowner is an "owner occupant." When a homeowner is an "owner occupant," contractors may only record a lien on the property if they have a direct contract with the owner. In addition, after recent modifications, the Prompt Pay Act may only apply to owner occupants if specific requirements are followed by the contractor. Therefore, it is very important that residential contractors always determine whether or not the owner is an "owner occupant" before signing a residential construction contract.

The Arizona Court of Appeal's recent decision in Williamson v. PVOrbit, Inc., 2011 Ariz. App. LEXIS 155 (September 1, 2011), for the first time determined that a residential property owned by a trust was still "owner occupied" for purposes of A.R.S. § 33-1002. A.R.S. § 33-1002(a) defines an "owner occupant" as any "natural person" who holds "legal or equitable title to the dwelling" and resides or intends to reside in the dwelling for at least 30 days in the year following the completion of the construction.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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