8.4.2

LIEN CLEARANCE REQUIREMENTS

Effective Date: September 29, 2026 Review Due: September 29, 2028

Summary of Changes

No changes needed per the two year review.

Purpose

To provide guidelines for removing a lien that is recorded on a vehicle or mobile home record and to identify the various types of lien clearances/releases accepted by the Division.

Authority

Two Year Review, A.R.S. §§ 28-2060, 28-2132, 28-2134, 28-2136 and R17-4-208.

Policy

  1. A lien may be removed from a vehicle/mobile home record when the Division receives a lien clearance or lien release.

Electronic Lien and Title (ELT)

  1. An ELT lien must be released by the transmittal of an electronic message from an ELT Service Provider on behalf of an ELT lienholder. Limited exceptions may apply; see the Lien Clearance Exceptions section below.
  1. Upon receiving the electronic message, the Division will:
  1. Electronically remove the name and address of the lienholder.
  2. Check for any other liens.

Paper Liens

  1. Acceptable documentation required to release a lien on a paper title includes:
  1. An original lien filing receipt issued by the Division prior to October 26, 1987.
  2. An original computer-generated lienholder record issued by the Division on and after October 26, 1987.
  3. An Arizona Certificate of Title (title), Lien release section properly completed (issued by the Division on and after April 2001).
  4. A lender copy of the original lien instrument (see Section E below).
  1. A paper lien clearance document must contain the following information:
  1. A complete description of the vehicle.
  2. A notation that the lien is considered paid.
  3. The printed name and signature of the lienholder (or lienholder agent).
  4. When the record displays more than one lienholder, the signature requirements are dependent on the legal status chosen by the lienholders, see Policy 8.3.2 Legal Status Multiple Owners/Legal Status Change.
  1. When the customer does not present an acceptable paper lien clearance document, the Division may remove a lien if the customer provides satisfactory proof of payment in full and an affidavit.
  1. When a lien is secured (perfected), a bankruptcy order (or supporting bankruptcy documents) cannot be used in place of a lien clearance. The debtor must either return the vehicle to the creditor or make alternate payment arrangements.
  1. When a lienholder is an individual and is deceased, a properly completed non-probate affidavit is acceptable with the signature of the successor on the lien clearance or the personal representative (or executor) may submit a court order (appointing the personal representative) and sign the lien clearance for the deceased person, see Policies 8.7.3 Non-Probate (Estate) or 8.8.7 Probate (Estate), as applicable.

Lien Clearance Exceptions

  1. A paper lien clearance may be accepted upon approval from an office manager, supervisor or designated lead under both of the following conditions:
  1. The owner of the vehicle has made a diligent effort to contact the electronic lien holder.
  2. The paper lien clearance document contains all of the required information, see Section E.
  1. A certified court order may be accepted in lieu of a lien clearance. The certified court order must include the following information:
  1. A full description of the vehicle (make, year, and vehicle identification number.).
  2. The name of the lien holder(s).
  3. A statement that the lien is canceled and that a clear title is to be issued.
  1. A title issued by a foreign jurisdiction may be used to remove a lien if all of the following conditions are met:
  1. The lien (previously recorded in this state) does not appear on the foreign jurisdiction title.
  2. The foreign jurisdiction title was issued (at least) one year prior to the date of application.
  3. The law of the foreign jurisdiction requires a lien to be recorded on the vehicle/mobile home title.
  1. A lien that remains on an Arizona vehicle record for more than 12 years may be removed without first receiving a lien clearance/release. This does not apply when the vehicle is a:
  1. Commercial vehicle, which may be indicated by:
  1. Title in name of a commercial entity.
  2. Commercial Category displays on the vehicle record.
  3. Declared gross weight displaying on the vehicle record.
  4. Commercial registration/weight fees display on the Plate Credit Record.
  1. Mobile home
  2. Motor home
  3. Travel trailer
  1. If the customer is unable to provide an acceptable lien clearance/release or satisfactory proof of payments made and does not meet the requirements specified in A.R.S. § 28-2060, the customer shall apply for a Bonded Title, see Policy 8.7.1 Bonded Title.
  1. The first lien is the primary lien. The primary lien is above all subsequent liens or other encumbrances recorded after the primary lien and are the only lien recognized by the Division when performing a repossession title transaction. However, lien clearances may be accepted in any order.