Skip to main content
Skip to explanation
A.R.S. § 33-803

Deed of Trust Trustee Qualifications

Verified April 4, 202657th Legislature, 1st Regular Session

Arizona law limits who can act as a trustee on a deed of trust. Eligible trustees include banks, trust companies, savings and loans, credit unions, insurance companies, and escrow agents. Consumer lenders, licensed real estate brokers, insurance producers, and State Bar members also qualify. An individual trustee generally cannot also be the beneficiary of the trust deed.

Title 33, TRUST DEEDS

azleg.gov

Qualified Trustees Under Arizona Law

Not just anyone can serve as the trustee on a deed of trust. Arizona requires the trustee to hold a professional credential or institutional standing.

This protects borrowers. The person or entity holding title until the loan is fully paid must have accountability and regulatory oversight.

The trustee of a trust deed shall be: 1. An association or corporation doing business under the laws of this state as a bank, trust company, savings and loan association, credit union, insurance company, escrow agent or consumer lender. 2. A person who is a member of the state bar of Arizona. 3. A person who is a licensed real estate broker under the laws of this state.

A.R.S. § 33-803(A)(1)-(3)

The list also includes licensed insurance producers, federally regulated financial institutions, and parent corporations of qualifying entities. In practice, most deeds of trust name a title company or escrow agent as the trustee.

The county recorder keeps the trustee's name on file. This means the public can verify who holds title at any time.

Restrictions That Protect Borrowers

An individual trustee who qualifies cannot also be the lender on the same deed of trust. This separation matters.

The trustee's role is to act as a neutral party. The trustee holds title as security and conducts any sale if the borrower defaults. Letting the lender serve as both trustee and beneficiary would remove that safeguard.

Corporate or institutional trustees have a narrow exception. They may hold both roles if they gained the lender's interest after being appointed and acted in good faith.

The statute also bars lending a trustee's name or corporate status to a non-qualifying person. This prevents unqualified parties from bypassing the rules by teaming up with a qualifying trustee in name only.

A. Except as provided in subsection B, the trustee of a trust deed shall be: 1. An association or corporation doing business under the laws of this state as a bank, trust company, savings and loan association, credit union, insurance company, escrow agent or consumer lender. 2. A person who is a member of the state bar of Arizona. 3. A person who is a licensed real estate broker under the laws of this state. 4. A person who is a licensed insurance producer under the laws of this state. 5. An association or corporation that is licensed, chartered or regulated by the federal deposit insurance corporation, the comptroller of the currency, the federal home loan bank, the national credit union administration, the farm credit administration, the federal reserve board or any successors. 6. The parent corporation of any association or corporation referred to in this subsection or any corporation all the stock of which is owned by or held solely for the benefit of any such association or corporation referred to in this subsection. B. An individual trustee of a trust deed who qualifies under subsection A shall not be the beneficiary of the trust, but such restriction shall not preclude a corporate or association trustee that qualifies under subsection A and while acting in good faith from being the beneficiary, or after appointment from acquiring the interest of the beneficiary by succession, conveyance, grant, descent or devise. C. A trustee of a trust deed who qualifies under subsection A shall not lend or delegate the trustee's name or corporate capacity to any individual or entity that does not qualify as a trustee of a trust deed. An individual, company, association or corporation shall not circumvent the requirements of subsection A by acting in concert with a nonqualifying trustee.

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.

Get Started Today

Need Help With Your Estate Plan?

Whether you are just getting started or reviewing an existing plan, RJP Estate Planning works hand in hand with experienced estate planning counsel to help you understand your options.

(480) 346-3570