Interest Rates

Previously, interest accrued at 10% per annum unless a different rate was contracted for in writing. Effective July 20, 2011, interest shall accrue at the lesser of 10% or 1% plus the prime rate. Therefore, judgments entered after July 20, 2011 currently bear interest at 4.25% (unless a different rate is agreed upon in writing).

Keep this revision to the law in mind in preparing and evaluating contracts going forward.

The "Strategic Default"

The Court of Appeals opined on the criminal liability of a homeowner who “strategically defaults” and then sells the bank's collateral.

Defendant, a real estate broker, bought residential rental properties and then missed payments. In response, the lender foreclosed.

Before foreclosure, Defendant sold upgraded cabinets -- to the FBI. Defendant was indicted and convicted of defrauding secured creditors, a felony. The jury’s conviction was affirmed.

Arbritration

Arizona recently adopted the Revised Uniform Arbitration Act which provides notable changes.

Under the new law, an arbitrator may award reasonable attorney fees and expenses if authorized by law or by agreement of the parties. Therefore, attorney fees and expenses may be awarded in most contract actions.

Also, the new law authorizes an award of punitive damages if evidence produced at the hearing justifies the award under the legal standards otherwise applicable to the claim. A.R.S. § 12-3001 through § 12-3029.