Qualified Trustees Under Arizona Law
Not just anyone can serve as the trustee on a deed of trust. Arizona requires the trustee to have a professional credential or institutional standing. This protects borrowers by ensuring that the person or entity holding legal title to their property has 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 in Arizona name a title company or escrow agent as the trustee.
Restrictions That Protect Borrowers
An individual trustee who qualifies under the statute cannot also be the beneficiary (lender) on the same deed of trust. This separation matters. The trustee's role is to act neutrally, holding title as security and conducting any sale if the borrower defaults. Allowing the lender to serve as both trustee and beneficiary would eliminate that neutral safeguard.
Corporate or institutional trustees have a narrow exception: they may hold both roles if they acquired the beneficiary's interest after being appointed and acted in good faith. The statute also prohibits lending a trustee's name or corporate capacity to a non-qualifying individual. This prevents unqualified parties from circumventing the requirements by teaming up with a qualifying trustee in name only.
