What is an Arizona Lease Agreement?
In simple terms, a lease agreement is a contract between an owner of real property and a person interested in using the property for a set period of time for a specific purpose, such as commercial or residential use. The property owner, or lessor, allows the person to use the property during a set period of time in exchange for items agreed upon in the lease agreement. The items listed can include rent, the purpose the property is used for, and how long the lease will last.
Unless you’re fortunate enough to have a personal lawyer who will review all of the legal documents on your behalf prior to signing them, it’s imperative you understand exactly what you’re signing and the implications of doing so. This is also true with regard to a lease agreement, however, leases are a little different than other legal documents. Although there are rules and laws that apply to leases in general and ones that specifically pertain to your state, the majority of restrictions imposed are based either on the agreement itself or local laws and ordinances.
These days most people sign a standard lease agreement when renting an apartment, condo, or performing any kind of commercial leasing. A standard lease agreement is beneficial both in terms of time and efficiency, but leases are not one-size-fits-all contracts, and no two lease agreements are exactly alike . For instance, if the lease agreement involves a house with a pool and a dog house included on the property, then the lease should contain clauses specific to those items. How will the dog house be treated once it’s vacated? How much liability does the tenant have if a child drowns in the pool, or if someone were to break into the residence and steal the family pet? These types of situations should be outlined in great detail in the lease agreement to protect both the lessor and lessee.
As is the case in many states, Arizona has strict guidelines when it comes to residential leases. It’s important to know these regulations so that you can avoid costly mistakes that could subject you and the lessor to litigation if the terms of your rental agreement are breached. In Arizona, certain terms are implied in the lease agreement, including disclosure terms and rental price terms, and these must always be included. Also, if the lessor has neglected to make timely repairs and you’ve had to do so yourself, there are certain requirements for notifying them and time frames they have to correct the problem once you notify them.
It’s also important to note that Arizona statute governs nearly all commercial leases, including industrial leases. There are also certain laws set forth in the statute regarding commercial leasing that dictate the rights of the parties involved in the agreement.
Essential Requirements for a Lease Agreement in Arizona
At a minimum, a lease agreement should contain the following terms:
Names of Parties. The lease should clearly state the names of the landlord and the tenant(s).
Address of the property. You must also include the address of the rental unit.
Term of Occupancy. You must include a clear term, i.e., month-to-month tenancy, six-month lease, etc.
Rent Amount. The lease needs to include the amount of rent, when it is due and how it is to be paid (for example, whether it is to be delivered to a specific address).
Pets. You need to also make sure the agreement includes whether or not pets are allowed at the unit and if there are any additional pet fees.
Rights and Obligations of a Tenant and Landlord
Lease agreements in Arizona provide both parties with a set of legal rights and obligations. This understanding is essential for maintaining a positive landlord-tenant relationship, as it helps to ensure that both parties fulfill their responsibilities and adhere to legal requirements. A tenant’s principal legal obligation is rent. Tenants must pay their rent on time and in accordance with the terms of the lease agreement. They are also legally required to keep their rental unit in a clean and well-maintained condition and avoid damage to the property, unless the damage is caused by normal wear and tear. Additionally, tenants should respect their neighbors’ rights to quiet enjoyment and not cause disturbances that could violate community rules or guidelines. Landlords, on the other hand; have several key legal obligations that must be fulfilled. Most notably, they must provide tenants with a safe and habitable living environment. This means that landlords must make necessary repairs and address safety hazards, such as broken windows, electrical issues, or mold growth. Arizona laws also require landlords to respect a tenant’s right to privacy and provide reasonable notice before entering the property for non-emergency reasons. It is also important for tenants and landlords to understand the process for handling maintenance and repair requests, as well as methods for resolving disputes. The process may involve notifying the landlord in writing of any necessary repairs or maintenance issues, which allows the landlord to schedule and complete the work in a timely manner. In some cases, tenants may be given permission to make the repairs themselves, with the understanding that the landlord will reimburse them for the costs. If a dispute arises and cannot be resolved through discussion and negotiation, either party can seek resolution through mediation, arbitration, or by filing a complaint with the Arizona Department of Housing. Court action is typically seen as a last resort, after all other remedies have failed. Tenant and landlord responsibilities under Arizona lease agreements are designed to promote mutual respect and ensure the security of the rental unit. By understanding these obligations, both parties can avoid misunderstandings and prevent disputes as they continue to forge a working relationship.
Security Deposits in Arizona
A landlord may charge a security deposit to a tenant, which is "an amount of money [the] tenant deposits with a landlord under a rental agreement to be held as security for physical damages to the premises and compliance with the rental agreement." The security deposit may not exceed one and one half (1 ½) months rent.
If the original rental agreement requires the payment of rent and payment of a security deposit then the security deposit can be divided into two parts and the landlord can treat the lesser of the two payments as a non-refundable fee. But, if the parties mutually agree to change the length of the rental term without altering the rental agreement, then the forfeiture of that portion of the security deposit can be treated as a forfeiture of the right to occupy the premises under Arizona law.
In Arizona, a security deposit, or any prepaid rental, cannot be non-refundable unless it meets the criteria outlined above. However, if the rental agreement provides for a non-refundable security deposit or an increase in rent, the landlord may still retain the security deposit, increase the rent or both, but only after providing a written notice, pursuant to Arizona Revised Statutes § 33-321, that specifically lists the deductions being taken from the security deposit together with an itemized accounting of the amount of money and items of personal property for which the deductions are being made.
Special Provision in Arizona Lease Agreements
In addition to the basic elements and standard terms, an Arizona lease agreement may contain several clauses that could be included to address specific needs. Like the regular terms, special clauses must be consistent with Arizona landlord-tenant law. These clauses can help clarify expectations upon leasing or renewal of a lease:
Pet clauses. A tenant will typically want to know if he or she can keep pets in the property. Without a specific clause addressing the action, a tenant could assume as long as a pet is even specified without any fee requirement , it’s permissible. Landlords can request additional fees for allowing pets. The amount of the fees may involve whether a pet deposit is kept upon receiving a pet or if rent will be slightly increased each month. There may also be specific terms associated with pet care to outline what can be done and restrictions for the pet on the property.
Renewal clauses. A lease renewal clause generally requires the landlord to give the tenant notice of his or her obligation to renew or vacate the premises. A lease could also renew on its own after a certain period of time or specific conditions must be met for the lease to renew.
Early termination clauses. If a tenant must leave his or her unit before a lease term expires, a lease may require a payment or prohibiting early termination altogether unless the property is re-rented within a specific amount of time. Specified amounts may be paid by the landlord to cover expenses while a unit is vacant.
Modifications and Terminations of Lease Agreements
Generally, a lease can be amended or terminated at its expiration or termination by mutual agreement of the landlord and the tenant. As a practical matter, most leases require that any amendment (in order to be enforceable) be in writing and executed by the parties. The parties should consult the lease with respect to the form of any amendments. When amending a lease, the landlord and tenant should be sure to verify that the amendments are consistent with the terms of the lease and comply with all applicable laws. In addition, the parties should be aware of any applicable contractual standards with respect to further amendments.
A landlord and tenant also may agree to terminate the lease at any time during its term. Such an agreement is a mutual rescission of the tenants’ right to possession of the premises. If a lease is terminated at expiration or by mutual consent, the lease no longer creates or imposes any obligations on the landlord or the tenant after the termination date.
A lease may be terminated, by the landlord without cause upon giving the tenant at least ten days’ prior actual notice of termination of the lease if (1) the tenant has been informed in writing of this right to terminate by inclusion of a provision in the lease, and (2) the tenant’s rights under the lease are greater than the minimum rights granted by statute. A landlord also has the right under A.R.S. § 33-3432(A) to terminate a lease without cause if the tenant is a tenant at will; a tenant at sufferance; or a tenant for a period of one year or less if the lease was entered into on a month-to-month basis. With respect to any lease other than a lease at will or a lease for a fixed term greater than one year, the landlord may terminate the lease upon two months’ prior written notice. A lease also may be terminated by either party upon breach of the lease or by the landlord for repeated breaches of the same non-curable provision of the lease. An entry in the court docket book shall be sufficient proof of an eviction action.
Arizona Lease Agreement Frequently Asked Questions
Does a lease agreement have to be in writing?
Definitely. A lease for a longer period of time than one year is subject to the statute of frauds, and thus you need to have a written lease agreement. However, any lease that is for any period of time should be in writing to save you grief and concern later. Otherwise, if you have a problem with your landlord and later file suit, it is always going to come down to your word against the landlord’s word as to what was or was not agreed to in the lease – unless you can support your case with evidence that will stand up in court.
How does a lease agreement become legally binding?
As long as the parties come to an agreement and the terms are clear so that the agreement is not voidable, the lease agreement is legally binding. Further, there should be consideration, meaning a bargained for exchange between the parties.
However, the statute of frauds requires that the contract must be in writing if it is for more than one year, signed by the party to be charged and containing all essential terms. The agreement should also include an adequate legal description of the property, a definite description of the rent, and a description of the term of the lease (including when it begins and what happens after the initial term).
What should I know about lease amendments?
It is always best to memorialize everything in writing, even after the original lease is signed. When it comes to a lease amendment, you want to include the affected sections of the contract, any specific changes, the date of effectiveness, and the initials of the parties.
Arizona Lease Agreement Resources
As a landlord or property manager, you have the options of drafting your own lease or purchasing a template from multiple sources. There are also resources for educating yourself about the lease process and legal requirements.
Legal Advice
The safer option is to use the services of a lawyer, particularly if you are new to the business of renting property. An attorney familiar with AZ Residential Landlord and Tenant Act can advise you on specific requirements pertaining to your lease.
Template Agreements
There are numerous options for purchase online now that the internet has largely taken over. It is vitally important , regardless of what you use the include the following along with the actual rental agreement:
The Arizona Department of Housing has a website that helps tenants know what should be included in leases, what their rights are, and how the rental process should work. You can access these resources at https://housing.az.gov/rentals.
Additional Resources
The Property Management Division of the Arizona School of Real Estate & Business creates and updates valuable, state-specific materials including handbooks, checklists and more that are available at http://schoolofrealestateandbusiness.com/. The School also offers Arizona state-approved continuing education classes for Property Management.