Erasing Any Doubt: Arizona FED Actions Do Not Accrue Until Formal Demand for Possession is Tendered

Clearing up any lingering confusion, in Carrington Mortgage Services, LLC v. Woods, 767 Ariz. Adv. Rep. 4 (June 22, 2017), the Arizona Court of Appeals confirmed that residential forcible entry and detainer actions in Arizona accrue for statute of limitations purposes when a party entitled to possession makes a formal demand for return of possession not when the party could have made a demand for return of possession.

In Carrington, the borrowers (the Woodses) remained in property that they had acquired in 2008 but then lost to foreclosure several years later.  The original lender obtained title to the property at a trustee’s sale on February 16, 2010, but did not take any action to remove the Woodses at that time.  Title to the property was then transferred through a series of transactions over the next six years.  Ultimately, Carrington acquired the title and, in 2016, sent a formal “Notice to Vacate” the premises to the Woodses.  After the Woodses failed to timely vacate pursuant to the demand, Carrington initiated an FED action to evict them from the property.

At the FED trial, the Woodses argued that Carrington’s FED action was time-barred by the two-year statute of limitations for FED actions, A.R.S. § 12-542(6), essentially contending that an FED action must be commenced within two years of when it could have been commenced (in this case, within two years of February 16, 2010 when the property was acquired by the original lender at the trustee’s sale).  Carrington, however, argued that an FED action does not accrue until a formal demand for possession—a Notice to Vacate—is made on the persons wrongfully in possession, relying specifically on the plain language of A.R.S. § 12-1173.01(A)(2) (a person can be removed through an action for forcible detainer “after he receives written demand of possession”) (emphasis added).

The trial court and the Court of Appeals agreed with Carrington.  Thus, the two-year statute of limitations for residential FED actions in Arizona does not commence until the person with a superior right to possession makes a formal demand for return of possession.  Until that time, the person holding over on the property is a tenant at sufferance, Grady v. Barth ex rel. City of Maricopa, 233 Ariz. 318 (App. 2013), and the FED statute of limitations is not ticking.