A.R.S. § 33-702

How Arizona Defines a Mortgage and What That Means

Verified April 4, 2026 • 57th Legislature, 1st Regular Session

Arizona defines a mortgage as any transfer of a real property interest made solely as security for another obligation. If a property transfer is really just collateral for a debt, the law treats it as a mortgage regardless of how the paperwork is labeled. The statute also allows mortgages and trust deeds to include assignments of rents and income from the property.

Title 33, MORTGAGES

azleg.gov

Substance Over Labels

What makes something a mortgage is not the title on the document. It is the purpose behind the transfer. Arizona law says that any transfer of a real property interest made only as security for another act is a mortgage, period. If the transfer was subject to being undone once the obligation is met, that fact can be proven in court to show the transfer was really a mortgage all along.

Every transfer of an interest in real property, other than in trust, or a trust deed subject to the provisions of chapter 6.1 of this title, made only as a security for the performance of another act, is a mortgage.

A.R.S. § 33-702(A)

This protection prevents lenders from disguising a loan as an outright sale. If someone "buys" your property but the real arrangement is that you will get it back once you pay off a debt, the law treats that transaction as a mortgage, with all the borrower protections that come with it.

Rent and Income Assignments

This statute also addresses what happens with rental income and profits from mortgaged property. A mortgage or deed of trust can include a provision assigning the borrower's interest in leases, rents, and income to the lender. That assignment can take effect before, during, or after a default.

If the borrower defaults, the lender can enforce the assignment through several methods: appointing a receiver, taking possession of the property, collecting rent directly from tenants, or seeking a court injunction. For families who own rental property and are planning their estate, understanding how mortgage terms affect rental income is an important part of the picture.

33-702. Mortgage defined; admissibility of proof that transfer is a mortgage A. Every transfer of an interest in real property, other than in trust, or a trust deed subject to the provisions of chapter 6.1 of this title, made only as a security for the performance of another act, is a mortgage. The fact that a transfer was made subject to defeasance on a condition may, for the purpose of showing that the transfer is a mortgage, be proved except against a subsequent purchaser or encumbrancer for value and without notice, notwithstanding that the fact does not appear by the terms of the instrument. B. A mortgage or trust deed may provide for an assignment to the mortgagee or beneficiary of the interest of the mortgagor or trustor in leases, rents, issues, profits or income from the property covered thereby, whether effective before, upon or after a default under such mortgage or trust deed or any contract secured thereby, and such assignment may be enforced without regard to the adequacy of the security or the solvency of the mortgagor or trustor by any one or more of the following methods: 1. The appointment of a receiver. 2. The mortgagee or beneficiary taking possession of the property, or without the mortgagee or beneficiary taking possession of the property. 3. Collecting such monies directly from the parties obligated for payment. 4. Injunction.

View on azleg.gov

This page provides general legal information about Arizona statutes and is not legal advice. For guidance on how this law applies to your situation, speak with a qualified attorney.

Related Statutes

§ 33-701What Can Be Mortgaged in Arizona and How

§ 33-703Arizona Mortgages: A Lien, Not a Transfer of Ownership

§ 33-704Mining Claim Mortgages: Lender Rights to Preserve the Claim

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