7.3 Pledge Versus Assignment.

• Jurisdiction: Arizona

In order to come within the ambit of A.R.S. § 33-702(B), a lender must demonstrate that its security documents contain an assignment of rents and not merely a pledge. The courts’ primary test to determine whether a clause is an absolute assignment or a pledge is the intention of the parties. E.g. Kinnison v. Guar. Liquidating Corp., 18 Cal. 2d 256, 115 P.2d 450 (1941).

Regardless of the character of the assignment, the appointment of a receiver perfects the lender’s right to the rents. Prudential Ins. Co....