Reinstatement / Cancellation / Debtor Rights

The following is the law governing reinstatement and cancellation of trustee sales (at least at the time of this writing; please check Arizona Revised Statutes online for any updates).

33-813.

Default in performance of contract secured; reinstatement; cancellation of recorded notice of sale.

A. If, prior to the maturity date fixed by the contract or contracts, all or a portion of a principal sum or interest of the contract or contracts secured by a trust deed becomes due or is declared due by reason of a breach or default in the performance of the contract or contracts or of the trust deed, the trustor or the trustor’s successor in interest, any person having a subordinate lien or encumbrance of record thereon or any beneficiary under a subordinate trust deed, before 5:00 p.m. mountain standard time on the last day other than a Saturday or legal holiday before the date of sale or the filing of an action to foreclose the trust deed may, reinstate by paying to the beneficiary, the trustee or the trustee’s agent in a form acceptable to the beneficiary or the trustee the entire amount then due under the terms of the contract or contracts or trust deed, other than the portion of the principal as would not then be due had no default occurred, by curing all other defaults and by paying the amounts due under subsection B of this section.

B. The beneficiary shall notify the trustee in writing of the performance and the name of the person who performed the conditions. The proceedings shall be cancelled and the contract or contracts and trust deed shall be deemed reinstated and in force as if no breach or default had occurred upon performance of those of the following which may be applicable:

1. Payment of the entire amount then due.
2. Payment of costs and expenses incurred in enforcing the terms of such contract or trust deed. These costs and expenses may include the following:
   • (a) Reasonable costs for mailing and photocopying.
   • (b) Actual expenses incurred for recording, publication, posting of notice of sale, auctioneer’s fees, postponement fees and title costs.
   • (c) Other reasonable costs and expenses.
3. Payment of the recording fee for a cancellation of notice of sale.
4. Payment of the trustee’s fees, in an amount not to exceed six hundred dollars or one-half of one percent of the entire unpaid principal sum secured, whichever is greater.
5. Payment of expenses and reasonable attorney fees that are not otherwise provided for in this section and that are incurred in protecting and preserving the beneficiary’s interest in the trust property.

C. On request from the trustor, or any person entitled to notice pursuant to section 33-809, subsection B, at any time that the trust deed is subject to reinstatement, the trustee shall provide a good faith estimate of the sums that appear necessary to reinstate the trust deed.

D. On written request from the trustor or any person entitled to notice pursuant to section 33-809, subsection B that is delivered to the trustee after the recording of the notice of trustee’s sale, the trustee shall inform the person of the exact amount necessary to reinstate the trust deed, separately specifying costs, fees and any other amounts that are required to be paid as a condition to reinstatement of the trust deed. The trustee shall provide that information within five business days after receipt of the written request. If the written request is received by the trustee during the five business days before the day of the sale, the trustee shall provide the information to the person as soon as practicable. This subsection does not require the extension of the period for reinstatement of the trust deed prescribed in subsection A of this section.

E. If the trust deed is reinstated as provided in subsection B of this section, the trustee shall have a cancellation of the notice of sale recorded in the same county recorder’s office where the notice of sale was recorded. A trustee who, for thirty days after reinstatement, fails to have proper notice of the cancellation of the notice of sale recorded is liable to the person who performed the conditions resulting in reinstatement for all actual damages resulting from such failure.

F. If the trust deed is paid in full or if the sale is not held or is not properly postponed pursuant to this chapter, the trustee shall record a cancellation of the notice of sale. The cancellation of the notice of sale shall be recorded in the office of the county recorder in which the notice of sale was recorded.