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November 2022

Gottlieb Law - Most Common Reasons for Commercial Real Estate Litigation in Arizona

The Most Common Reasons Why Commercial Real Estate Litigation in Arizona Occurs

The Most Common Reasons Why Commercial Real Estate Litigation in Arizona Occurs 624 416 Gottlieb Law

Before things come to litigation, most parties will try to resolve real estate issues beforehand using alternate dispute resolution forums such as mediation that are designed to present a solution to all involved parties without the need for court action. In the event that such an outcome is not possible, however, the dispute will typically need to be escalated to commercial real estate litigation in Arizona.

Regardless if you are the party bringing the litigation, or if you are defending yourself from litigation, the reality is that involving the courts can be time-consuming. In these instances, you’ll want an experienced commercial real estate litigation attorney in Arizona representing your best interests. In particular, you will want an attorney who has plenty of trial experience.

The most common reasons for commercial real estate litigation include things like: boundary disputes, breach of contract, breach of duty, financial disputes, breach of fiduciary duties owed, land use disputes, lease disputes, negligence of duties owed, fraud, disputes over joint ventures, insurance disputes, easement disputes, and even things like specific performance.

Finance Disputes

A common cause for commercial real estate litigation in Arizona are financial disputes. These can include elements such as disputes over escrows, sales and purchases, rescission, claims of fraud, lender claims and more. The reality is that financial disputes that are real estate related can hinder a company’s growth and footprint. Such disputes may be unavoidable and it is advisable to address these matters with urgency and with the right Arizona commercial litigation attorney, so you can get a swift and favorable outcome.

Commercial Lease Disputes

A dispute over a commercial lease can involve things like lease terminations, lease disputes, breach of contract or breach of lease, and even things like first right of refusal. Since commercial leases are typically for longer terms and higher amounts than residential lease agreements, these types of issues have complexities that will require the insight and experience of a seasoned commercial real estate lawyer in Arizona to resolve.

Breach of Duty & Negligence

Breach of duty and negligence generally occur when real estate actors do something wrong, for instance by failing to represent the best interests of a party that is owed a fiduciary duty. Breach of duty or negligence or contract can also apply to landlords or tenants that have not followed the obligations detailed in the lease agreement or expressed under state law. In some cases, this can result in litigation, if it can be established that breach resulted in a financial loss or a disadvantage.

Specific Performance

Litigation regarding specific performance takes place when one of the signers of a real estate contract fails to perform the obligations agreed to in contract. For instance, a property owner that executes a contract to sell a building attempt to back out of the deal without providing valid or legal reasons for the cancellation. In these cases, litigation can be brought forth to seek a court remedy for these actions and to ensure that the obligations of the contract are fulfilled by all parties involved. Specific performance is an attainable but difficult remedy to obtain in court.

Boundary Disputes

A boundary dispute takes place when property lines are not properly accounted for in between different properties. In many cases, these issues are resolved without a costly and time-consuming court action. A land survey and demand letter can typically suffice. But in some cases, they are a result of the failure to hire an experienced Arizona commercial real estate attorney to research and clearly identify property lines before a purchase takes place.

Breach of Contract

One of the most common causes of commercial real estate litigation in Arizona is breach of contract involving sales and leases. While each contract comes with its own set of enforceable terms and conditions, commercial real estate leases require that the party seeking the remedy establish that duties were breached resulting in failure to fulfill the terms and conditions of the contract. If you believe that you have been the victim of breach of contract, it is important to properly document the details of the breach and work with a commercial real estate attorney to properly notify the offending party before attempting to pursue litigation. Generally, the breach of contract clause in any lease agreement will detail the requirement for notification and the time period for curing the breach.

Find a Commercial Litigation Attorney in Arizona

The attorneys at Gottlieb Law have significant experience with commercial real estate litigation in Arizona. Our attorneys can assist you with any issues and help you understand your rights. If you anticipate a lawsuit, our attorneys can assist you in protecting your reputation and business. Contact us today at 602-899-8188 to schedule an initial consultation or Contact Us online.

Gottlieb Law Founder Benjamin Gottlieb on AZ Big Media’s Real Estate Pulse Showcase

Gottlieb Law Founder Benjamin Gottlieb on AZ Big Media’s Real Estate Pulse Showcase 150 150 Gottlieb Law

Reposted from AZ Big Media:

Ben Gottlieb, one of the most successful real estate attorneys in the Valley and founder of Gottlieb Law, says there are plenty of things buyers and sellers and developers should keep their eyes on heading into 2023. 

“We are in an interesting, evolving real estate dynamic right now,” Gottlieb says. “The law is a serious field, there are always a lot of moving parts. With that being said, there are a lot of real estate trends with legal implications that people should watch heading into 2023.”

In this episode of “Real Estate Pulse with Ben Gottlieb,” the law industry leader talks about some of the legal issues people need to know about heading into 2023 when it comes to all things real estate.

Gottlieb, 37, has racked up an impressive list of accomplishments during his 12-year career, a sampling of which includes:

• Selected to the Southwest Super Lawyers Rising Stars list for the past six years, a designation given to no more than 2.5 percent of the attorneys in any practice area;

• Named to the Top 100 Lawyers in Arizona list (2020-2022);

• AZ Big Media’s Arizona Business Leaders list (2020-2022);

• Arizona Business Magazine’s People to Know in Commercial Real Estate (2021);

• Best Lawyers List (2022).

“We will continue to use state-of-the-art technology to help solve legal problems faster,” Gottlieb says. “And by combining legal talent that has decades of successful experience in the law with its high-caliber collaborative approach and top-of-the-line technology, Gottlieb Law will continue to deliver superior legal services and outcomes for its clients.”  

Benjamin L. Gottlieb is the founding partner of Gottlieb Law. He has an unblemished trial record and is recognized as one of the top real estate attorneys in Arizona. He earned his bachelor’s degree in finance from the Eli Broad College of Business at Michigan State University, with high honors and his Juris Doctor from the Sandra Day O’Connor College of Law at Arizona State University where he was a Pedrick Scholar and served as the managing editor of the Arizona State Law Journal. In the latter capacity, Benjamin was the recipient of the Outstanding Managing Editor award. Gottlieb also is an Arizona Department of Real Estate-approved instructor and teaches continuing education courses on real estate law to realtors.

Gottlieb Law - Arizona Commercial Landlord Tenant Laws

A Useful Guide to Arizona Commercial Landlord Tenant Laws

A Useful Guide to Arizona Commercial Landlord Tenant Laws 1773 1182 Gottlieb Law

Commercial landlords and tenants owe each other certain responsibilities under Arizona law.  Likewise, commercial landlords and tenants owe each other certain obligations per the lease agreement as well.  A real estate attorney will generally start with the lease agreement itself when evaluating a potential case or dispute, then evaluate the client’s overall matter in the context of Arizona’s statutory and common laws.  To assist with understanding which party is responsible for what in a commercial lease, we put together this useful guide to Arizona commercial landlord and tenant laws.

Use and Adequacy of the Premises

Because the law presumes that commercial tenants are sophisticated contracting parties, commercial landlords generally do not have the same responsibilities as residential landlords and are at more liberty to freely contract with the tenant.  When it comes to acceptability and adequacy of the premises for the tenant, a court will resort to the lease agreement.  Many commercial leases have provisions regarding how a tenant can use the premises.  A commercial tenant should ensure that the premises are suitable for its needs and intended use and ready for occupancy when it signs a lease.  Both commercial landlords and tenants will benefit from clarity around this point in the lease agreement, including terms regarding which party will take responsibility for things like zoning and compliance with local laws to ensure the premises can be used as intended by the parties.  A commercial landlord has a responsibility to deliver the premises per the lease terms on the agreed-upon start date, although sometimes the parties will allow for a delayed commencement date.

Tenant Quiet Enjoyment of the Premises

Commercial landlords in general have a responsibility to provide tenants with quiet enjoyment of the premises, which means the landlord cannot unreasonably disturb the tenant’s intended use of the premises.  Simply put, landlords cannot cause any interruption to the beneficial use of the leased premises throughout the entire lease term.  This typically only applies to disturbances caused directly by a landlord, not those caused by a government agency or third party.  Some possible violations of this covenant may include entering the premises too frequently, restricting or interfering with essential services provided to a tenant, or allowing or causing the premises to become uninhabitable.

Handling Repairs and Defects

Commercial tenants generally have a duty to repair or replace items that were not defective at the time of occupancy unless the lease agreement states otherwise.  Both parties should carefully consider which party is responsible for fixing things like bathrooms, HVAC, windows or doors if they become defective during the lease.  If these items are not expressly included in the agreement, these responsibilities will likely fall on the commercial tenant assuming the landlord fulfilled its obligations in providing the premises in good condition.

Tenant’s Right to Assignment or Sublet in Arizona

Restraints on whether a tenant can sublease the premises is generally controlled by the lease.  Because commercial parties are deemed sophisticated by courts, a court will defer to the lease.  Some leases will allow a tenant to freely sublease the premises, other leases will require the landlord’s consent which shall not be unreasonable withheld.  Other leases may have more restrictive language for assignment or subletting the premises.  Some concerns of the landlord may include wanting valid evidence of financial irresponsibility, illegal or detrimental activities, and general unsuitability of the premises for a new intended use.

When Tenants Can Terminate Early in Arizona

The fact that a high percentage of businesses fail leads to a lot of potential reasons why a commercial landlord might want to terminate a lease agreement early.  These issues typically are detailed in the break clause of any lease agreement.  This is an important provision of the lease contract which details under what circumstances the landlord or tenant may terminate the lease prematurely.  These provisions may include an ability for a tenant to terminate the agreement when the landlord can find a replacement tenant.  Commercial landlords in Arizona have a duty to make all reasonable efforts to find a new tenant at fair market value when requested by a tenant.  It is also common for landlords to assess some penalty in a lease agreement for early termination, like loss of deposit or some additional payment term.  A tenant that wants to terminate its lease agreement can generally avoid or limit these penalties if they proactively find a suitable tenant to take over their lease.

Delinquent Rental Payments and Commercial Lockout Notices in Arizona

It should not be a surprise that failure to pay rent will result in the lease termination for commercial lease agreements.  Under Arizona Revised Statute 33-361, commercial tenants have the right to enter the premises and lock out a tenant when they are more than five days delinquent on rental payments if it is not expressly prohibited in the lease agreement.  Tenants should be aware that landlords even have the right to place a landlord lien on any personal property in the premises until full payment on past due amounts and penalties have been made.

Value of a Leading Commercial Real Estate Law Firm in Arizona

Commercial real estate law can be complicated for landlords and tenants.  Since lease agreements are typically for longer periods of time and higher rental payments than residential, it is especially important to utilize the representation of an experienced commercial real estate attorney before executing any commercial lease agreements.  Gottlieb Law was founded to deliver industry-leading expertise to our commercial real estate clients.  Our firm routinely works with commercial landlords and tenants to draft and review lease agreements, resolve disputes, and, when necessary, pursue litigation in our clients’ best interests.  Call us today at 602-899-8188 to schedule an initial consultation or make an appointment online here.

Gottileb Law published this article for information purposes only and it should not be considered as creating an attorney-client relationship.  Contact our firm if you need specific assistance on a related matter.