Good-Faith Reliance on Written Directions
The trustee under a deed of trust occupies a neutral position between the borrower and the lender. When questions arise about how to proceed, the trustee needs clear direction. This could involve whether to begin a trustee sale, release the deed, or appoint a substitute trustee. The law gives the trustee broad protection when following written instructions from the beneficiary.
In carrying out his duties under the provisions of this chapter or any deed of trust, a trustee, shall when acting in good faith, have the absolute right to rely upon any written direction or information furnished to him by the beneficiary.
A.R.S. § 33-820(A)This protection is significant. As long as the trustee acts in good faith and relies on written (not verbal) directions from the beneficiary, the trustee is shielded from liability for following those instructions. The good-faith requirement means the trustee cannot knowingly participate in fraud or clearly improper conduct. But routine reliance on the lender's written guidance is fully protected.
Attorney Dual Representation
In many states, conflict-of-interest rules prevent the same attorney from representing both sides of a transaction. The law takes a different approach for deed of trust administration. The fiduciary duty concerns that normally prevent dual representation are relaxed in this specific context.
An attorney for the beneficiary shall also be qualified to act as attorney for the trustee or to be the trustee.
A.R.S. § 33-820(B)This means the lender's attorney can also serve as the deed of trust trustee or act as the trustee's attorney. In practice, this streamlines the process. It reduces the number of parties involved, lowers costs, and speeds up actions like trustee sales and releases.
How This Affects Families
For families dealing with real property during estate settlement, understanding who holds these roles can clarify who has authority to act on a deed of trust. If a foreclosure proceeding begins, the trustee may be the same attorney who represents the lender. That is permitted under this statute.
If family members receive a demand letter or a notice of hearing related to a deed of trust, knowing that the trustee relied on the lender's written direction can explain why certain actions were taken. The trustee's role is largely administrative. They follow the beneficiary's instructions as long as those instructions are in writing and the trustee has no reason to question them in good faith.