When and Why Trustees Are Replaced
The trustee on a deed of trust is not always a permanent appointment. Trustees may fail to qualify, become unwilling or unable to serve, or simply resign. The statute provides a clear process for the beneficiary to appoint a replacement without needing court approval.
The beneficiary may at any time remove a trustee for any reason or cause and appoint a successor trustee, and such appointment shall constitute a substitution of trustee.
A.R.S. § 33-804(B)This broad authority means the lender does not need to show cause to replace a trustee. The substitution takes effect immediately upon execution, even before recording. However, recording is still required, and the borrower must receive written notice by registered or certified mail.
Recording and Qualification Requirements
The substitution notice must be recorded in every county where the trust property is located. It must also describe how the new trustee qualifies under A.R.S. 33-803. This prevents a beneficiary from appointing a replacement who does not meet the professional or institutional requirements the law demands.
A trustee who wants to step down can do so by recording a notice of resignation with the county recorder and notifying both the borrower and the beneficiary by certified mail. Until a successor is appointed, no one can exercise the trustee's powers under the deed of trust. This protects borrowers from actions taken by an entity that no longer holds the role, while ensuring the deed of trust itself remains valid even during a transition.
