AZ HB2740

Allows certain owner-occupied residential property owners to continue renting the foreclosed property for at least one year after notifying the lender they wish to do so, creating a month-to-month tenancy.

Requires lenders to provide notice to borrowers in default of their right to rent the property, including the justice of the peace court with jurisdiction over the property and the deadline for notifying the lender (at least 30 days after notice is mailed or posted).

Prohibits lenders from exercising the power of sale for at least one year after a borrower properly notifies them of the intent to rent, provided the borrower pays fair market rent determined by justice court and maintains the property as their principal residence.

Applies only to single-family or two-family dwellings (including condominiums and planned community units) that served as the trustor's principal residence for at least two years before default, and where the original loan amount was below the median purchase price for the area.

Establishes justice court proceedings to determine fair market rental value, with an appointed licensed residential real estate appraiser presenting evidence at a hearing; rental value can be redetermined after one year if market conditions change.