A number of our investor client’s have been caught in the situation where they went to a trustee’s sale, were the successful bidder on a property, paid the $10,000 deposit and paid the balance of the sales price by the next day at 5:00pm, but never received the deed.  Despite the buyer complying with steps set forth in A.R.S. § 33-810 and 33-811, the trustee refuses to release the trustee’s deed.  In many cases, it may be several weeks after the sale and the trustee’s alleges that they are rescinding the sale because the former borrower had entered into a modification with the lender.  They claim that the sale shouldn’t have been completed and refuse to release the deed.  Some trustee’s have even released the trustee’s deed, only to seek to invalidate several weeks later.  Clients are always trying to determine if the trustee can rescind the sale and what the client’s rights are. 

Our firm has handled this exact situation numerous times and has sued several trustees to enforce our client’s rights.  While other states may allow a trustee to rescind a sale, there is neither statute nor case law in Arizona that allows a trustee to unilaterally rescind a sale and refuse to release a deed.  The entire trustee’s sale process, and the actions taken by the trustee, are governed by A.R.S. § 33-801 et. seq

A.R.S. § 33-811(B) provides that the “trustee shall execute and deliver the trustee’s deed to the purchaser within seven business days” after the purchase price is paid.  This language is unambiguous and provides no discretion to the trustee.  Supporting this is A.R.S. § 33-810(A) which provides that the sale is completed upon payment of the purchase price and that the delivery of the deed is a “ministerial” act, one which is mandated by law and allows for no discretion.  These statutes deprive the trustee of the ability to rescind a sale. 

As stated above, certain states have held that a sale that was completed in violation of an agreement between the borrower and the bank is a void sale, and therefore the trustee is not bound to release the deed.  There is no such precedent in Arizona, and it conflicts with the applicable statutes.  However, it is important that when seeking to enforce your rights as a purchaser, you seek legal counsel who understands the legal arguments and the proper steps you must take to seek relief from the courts.  The worst action that can be done is to take no action at all.  You must protect your rights, and doing so requires that you know what rights you have.