Slander of title is a traditional legal theory that can be used when someone publishes false statements that encumber or question title to property. The cause of action typically involves title to real property, but the claim actually covers a wider range of property rights.
Unfortunately, it also can be difficult to prove. Proof of malice and special damages are usually required to establish a claim for slander of title. These two hurdles can be difficult to overcome, but Arizona provides a statutory remedy that can effectively replace a slander of title action in real estate cases.
A.R.S. § 33-420(A) establishes a cause of action for the owner or beneficial title holder of real property when a recorded lien or encumbrance is forged, groundless, contains a material misstatement or false claim, or is otherwise invalid. Under the statute the person who files the groundless lien is “liable to the owner or beneficial title holder of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichever is greater, and reasonable attorney fees and costs of the action.”
The provision imposing statutory damages gives the owner of a slandered title a powerful way to fight against groundless liens, without being required to prove specific damages. In A.R.S. § 33-420(C), the statute allows the property owner to send a letter requesting the release or correction of the improperly recorded lien, and the person who has recorded the lien has twenty days to comply. If they do not, they will be liable for one thousand dollars in damages, or actual damages, whichever is greater. They will also be responsible for reasonable attorney fees.
The statutory cause of action is easier to prove than the common law slander of title tort. Even if no malice was intended and no actual damages are shown, a person who has filed a groundless lien will be responsible for one thousand dollars and attorney fees if they do not release the lien within twenty days of receiving the request.
A claim under A.R.S. § 33-420 or a quiet title lawsuit can help clear up your title of any defects.
Chernoff Law handles real estate litigation and quiet title matters throughout Arizona. Contact us by calling 480-719-7307 to discuss your real estate matters.