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January 2023

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Resolving Disputes Between Landlords and Tenants in Arizona
Resolving Disputes Between Landlords and Tenants in Arizona 1773 1182 Gottlieb Law

Residential landlords and tenants may have disputes for a variety of reasons, including issues with the property, the terms of the lease or disagreements about repairs and maintenance. Some common issues that can lead to disputes include non-payment of rent, unauthorized subletting, damage to the property, disagreements over security deposits and other situations. These disputes can arise due to lack of understanding or communication, or due to a lack of trust.

Regardless of why disputes arise, landlords and tenants in Arizona should understand their rights and tread carefully as they look for an appropriate resolution. It is always wise to consult an experienced real estate attorney when navigating any type of controversy with potential legal consequences. In the meantime, this is what Arizona landlords and renters need to know about resolving disputes.

Common Disputes Between Landlords and Tenants

In Arizona, some common disputes between landlords and tenants include issues with rent payments, property damage and violations of lease agreements.

One common issue is non-payment of rent. This can occur when a tenant falls behind on their rent payments, and the landlord may choose to evict the tenant as a result. A.R.S. § 33-1368(B) states that landlords must provide notice to the tenant that rent is late, and the tenant has five days to pay the rent and any applicable late fees as per the terms of the lease. Only after the final day of notice can the landlord file an eviction action if the tenant still has not paid.

Another common dispute is over property damage. Landlords may dispute with tenants over damages caused to the property during the tenant’s occupancy, and may deduct the cost of repairs from the tenant’s security deposit. However, per A.R.S. § 33-1363, landlords who do not address necessary repairs in a timely manner may be required to pay a licensed contractor for work done on the property. A related issue is with security deposit disputes — tenants may dispute the deductions taken by landlords from the deposit, claiming the damages were pre-existing or that the landlord did not properly document the damages.

Violations of lease agreements is also a common reason landlords and tenants quarrel. Tenants may violate the terms of the lease by subletting the property without permission or having unauthorized occupants, or by keeping pets in a pet-free property. Landlords may take action to evict the tenant or impose penalties as a result.

Lastly, disputes over maintenance and repairs are incredibly common. Landlords may neglect to make necessary repairs to the property, or may delay repairs, leading to disputes with tenants.

Landlord Rights in Arizona

As a landlord in Arizona, you have several rights, including but not limited to the following:

  •       The right to collect rent: Landlords have the right to collect rent from your tenants according to the terms of the lease agreement.
  •     The right to access the property: Landlords have the right to access the property for the purpose of inspection, maintenance, or repair, but must give the tenant reasonable  (typically two days) notice before entering the property.
  •       The right to evict tenants: Landlords have the right to evict tenants in violations of the lease agreement terms or fail to pay their full rent. However, they must follow the proper legal procedures for eviction.
  •       The right to retain a security deposit: Landlords have the right to retain a security deposit to cover any damages caused by the tenant or unpaid rent. Keep in mind, the landlord must create a detailed and itemized list of all deductions and promptly provide it to the tenant.
  •       The right to set and increase rent: Landlords have the right to set the rent for the property and increase it as long as it’s done in accordance with the state laws and any lease agreements.
  •       The right to terminate the lease: Landlords have the right to terminate a lease agreement if the tenant violates the terms of the lease or for other reasons as stated in the lease agreement.

It is important to note that all these rights must be exercised within the framework of state laws and regulations, and it is always advisable to seek legal advice before taking any action.

Tenant Rights in Arizona

Residential tenants in Arizona also have their own set of rights detailed in the Arizona Residential Landlord and Tenant Act, including the following:

  •       The right to a safe and livable space: Tenants have the right to live in a property that is safe and in good working order. Your landlord is responsible for making sure that the property is free from hazards and that any necessary repairs are made in a timely manner.
  •       The right to privacy: Tenants have the right to privacy in your rental unit. Your landlord must give you reasonable notice before entering your unit and can only enter for specific reasons, such as emergency repairs or inspections.
  •       The right to a fair and timely return of your security deposit: Tenants have the right to a fair and timely return of your security deposit. Your landlord must return your deposit within 14 days after you move out, unless deductions were made for unpaid rent or damages.
  •       The right to pursue legal action against your landlord: If your landlord violates your rights, tenants have the right to pursue legal action against them to resolve the dispute. This can include filing a complaint with a government agency or filing a lawsuit.
  •       The right to be protected from discrimination: Tenants have the right to be protected from discrimination on the basis of race, color, religion, sex, familial status, national origin, or disability.
  •       The right to quiet enjoyment: Tenants have the right to quiet enjoyment of the rental property, free from undue disturbance from the landlord or other tenants.

It is important to note that all these rights must be exercised within the framework of state laws and regulations, and it is always advisable to seek legal advice before taking any action.

How to Resolve Disputes Between Landlords and Tenants

It’s best to try resolving disputes between landlords and tenants in Arizona without going to court, but legal counsel may be necessary if disputes cannot be easily mediated. Reasons for disputes between landlords and tenants can vary, but having the assistance of an experienced real estate attorney can help settle disagreements fairly and efficiently.  The attorneys at Gottlieb Law are well-versed in landlord and tenant disputes in Arizona.  We can quickly review your dispute and help guide you to a resolution.  Contact our firm today at 602-899-8188 to schedule an initial consultation on your dispute or make an appointment on our contact us page.

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The Impact of Zoning and Land Use Laws on Real Estate Investing in Arizona
The Impact of Zoning and Land Use Laws on Real Estate Investing in Arizona 1773 1182 Gottlieb Law

For real estate investors in Arizona, understanding local zoning and land use laws is crucial for avoiding costly errors and being able to use property for its intended purpose. Zoning and land use laws regulate the types of activities that can take place in different areas of a city or town, and they can have a significant impact on real estate investing. In Arizona, these laws are generally established and enforced by local governments, such as cities or towns, which means investors must do their due diligence whether their desired property is in the Valley or beyond.

Zoning Laws in Arizona

Zoning laws in Arizona divide a city or town into different zones, each of which is designated for a specific type of use, such as residential, commercial, industrial or sometimes mixed use zones. The specific types of activities allowed in each zone (how property can be used, what can be built on it, and where and how it can be built) are typically set forth in the local government’s zoning code or land use plan.

In Arizona, state law provides a framework for local governments to establish and administer their own zoning and land use regulations, meaning cities and towns have the power to regulate the use of land within their boundaries.

Specifically, the Zoning Enabling Act, found in A.R.S. 9-462, sets forth the general principles and procedures that local governments must follow when establishing and enforcing zoning regulations. This statute provides that local governments may adopt zoning ordinances that regulate the use, height, bulk, location, and density of buildings and structures within their boundaries, as well as the use of land for other purposes.

Another important statute to note is related to Arizona subdivision laws, A.R.S. 32-2181. This statute regulates the division of land into smaller parcels, such as for residential or commercial development, and requires developers to submit plans for approval. It also provides for the creation of zoning and land use plans to guide the development of subdivided land and is intended to protect the public safety and welfare.

It is worth noting that these are only examples, and there are many other laws and regulations that may be relevant to real estate investors, depending on the specific circumstances of their investments.

Property owners who wish to use their land for something outside of current zoning restrictions may apply for a “variance,” or an exception to the rule. Zoning laws vary greatly among cities and towns, but use variance cases that protect one’s property rights and do not change the nature of the surrounding area may be granted a variance by the zoning authority. It is wise to apply for any needed variance before construction begins, as penalties for defying zoning laws include civil fines and may result in litigation.

Land Use Restrictions in Arizona

Land use restrictions in Arizona are regulations that limit the way that land can be used and developed. These restrictions are also established by local governments through zoning ordinances or land use plans, or they can be imposed through private agreements, such as covenants, conditions, and restrictions (CC&Rs) that are attached to a property. To differentiate, remember this: Land use refers to how property owners develop land to suit their needs, and zoning is how the land is regulated by the government.

Land use restrictions can take many different forms and can achieve a wide range of objectives, such as preserving open space, protecting the environment, or promoting certain types of development. Some common examples of land use restrictions in Arizona include:

  •       Height limits: Limit the height of buildings or structures on a property.
  •       Setback requirements: Specify the minimum distance that buildings or structures must be set back from property lines or other features, such as roads or waterways.
  •       Building density: Limit the number of buildings or units that can be constructed on a piece of land.
  •       Use restrictions: Set forth the types of activities that can be conducted on a piece of land, such as prohibiting certain types of businesses or prohibiting the use of a property for certain purposes, such as farming or logging.
  •       Environmental protections: Protect natural resources or sensitive ecological areas, such as habitats for endangered species.

In short, land use restrictions give communities a uniform look and feel, and they keep everything organized by separating areas with varying noise levels, crime levels and pollution. They also create more desirable neighborhoods and areas of town, which can mean higher ROI for real estate investors.

Therefore, investors should be aware of any land use restrictions that may apply to a property they are considering purchasing, as these restrictions can significantly impact the value and use of the property.

How Zoning and Land Use Laws May Impact Your Arizona Real Estate Investment

As a real estate investor, it is important to understand the zoning and land use laws in the area where you are considering buying property. These laws can affect the types of properties you can purchase and the types of activities you can do on them. For example, if you are interested in buying a property to turn it into a rental property, you will need to make sure that the property is in a zone that allows for rental units or that there are no other restrictions preventing the property from being utilized as a rental property. Similarly, if you are considering buying a piece of land to build on, you will need to ensure that the land is zoned for the type of development you have in mind and that you comply with any relevant land use regulations.

It is also worth noting that zoning and land use laws can change over time, so it is important to stay up-to-date on any changes that may affect your investment.

Find an Experienced Arizona Real Estate Attorney

Navigating zoning and land use laws during the due diligence process can be difficult, especially in a fast-paced real estate market. It is important to work with experienced attorneys that can help guide you through the process and make sure you can use your property for your desired purpose.

If you are looking to invest in real estate in Arizona, the experienced attorneys at Gottlieb Law can represent your interests throughout the entire process. Contact us today at 602-899-8188 to schedule an initial consultation or make an appointment on our contact us page.

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The Importance of a Thorough Real Estate Due Diligence Checklist for Successful Investors
The Importance of a Thorough Real Estate Due Diligence Checklist for Successful Investors 2160 1412 Gottlieb Law

Due diligence is an important concept for any real estate investor to understand. It is the process of researching and evaluating a potential investment opportunity to determine if it is a wise investment. This includes researching the property itself, the local market, and the legal and financial aspect of any potential deal. Good due diligence requires a comprehensive and thorough evaluation of the investment opportunity to ensure that the investor is making a responsible and informed decision. 

When evaluating a potential investment, the investor must consider all the costs associated with the purchase and any potential issues that may arise. It is important to consider the condition of the property, any zoning or tax issues, and the current market value of the property. Furthermore, it is advisable for investors to conduct thorough investigations into the local market conditions to ascertain whether the property is situated in a region poised for substantial value growth.

Proper due diligence involves researching the seller, the property, and any potential tenants. It is crucial to confirm that the seller possesses the legitimate authority to transfer the property and that there are no unresolved claims, liens or encumbrances. Having an experienced real estate attorney and a good title company will help with this aspect of the process.  Every investor ought to examine the property to ensure its satisfactory condition and determine if any repairs or enhancements are required. Finally, the investor should research potential tenants to make sure that they are financially stable and will be able to pay rent.

Thorough and meticulous due diligence is imperative for every real estate investor in each transaction. This encompasses in-depth research into the property, the surrounding market, as well as the legal and financial facets of the deal. Real estate investors must be prepared to research the seller, the property, and any potential tenants. Taking the time to do due diligence can help ensure that the investor is making a responsible and informed decision.

Benefits of Thorough Due Diligence 

Due diligence is an important concept for all real estate investors to understand and execute. By investing the time and effort necessary to conduct thorough due diligence, a real estate investor can significantly reduce their risk, increase their efficiency, gain an improved negotiation position and maximize their potential return on real estate investments. 

One of the primary benefits of due diligence is that it reduces the risk associated with any real estate investment. By carefully investigating the details of a proposed transaction, an investor can identify potential issues that could have a negative impact on the investment. This acquired knowledge can subsequently be employed to facilitate wiser decision-making and prevent costly errors.

Establishing a detailed due diligence checklist for all real estate investments also increases the efficiency of the transaction process. By thoroughly researching the details of a potential investment, an investor can make decisions faster and more confidently, allowing them to capitalize on profitable opportunities when they arise. Moreover, diligent research can aid in the early detection of potential concerns, averting them from evolving into costly predicaments, thereby enabling investors to concentrate their resources on the most lucrative opportunities.

Due diligence also gives investors improved leverage in the inevitable negotiations that take place with real estate transactions. By having a detailed understanding of the proposed transaction, an investor can negotiate the best possible deal for themselves, ensuring that they are getting the most value out of their investment.  Completing a thorough analysis of the property will make the contracting process more efficient and help avoid common pitfalls that lead to legal and financial issues down the road.

Creating a Reliable Real Estate Due Diligence Checklist for Your Investments

Real estate due diligence can be time-consuming and complex, so it is important to have a thorough checklist to make sure nothing is overlooked. Any thorough real estate due diligence checklist should include a detailed financial analysis of the potential deal, an assessment of the property’s legal status, a review of the title and deed, an examination of the zoning regulations, an evaluation of the physical condition of the property, a review of the local market conditions, and an assessment of the potential risks associated with the property. Each of these topics is important and should be carefully researched before any real estate transaction is finalized. Here are some of the most important things to include in your due diligence checklist:

  • Research and Analysis

Research and analysis should be at the top of the list for any real estate due diligence checklist. Market research is an essential part of the due diligence process and should include researching the local economy and housing market. Property research should involve looking at the physical and legal aspects of the property in detail. It should also include inspecting the condition of the property, obtaining an appraisal, looking at zoning regulations, understanding the deed and title, and researching any potential environmental issues. Financial scrutiny should also be performed to gain insights into the economic feasibility of the property. This could include looking at financial statements, analyzing cash flow, and understanding the projected return on investment. While there are many other items to consider when completing a due diligence checklist, research and analysis should be at the top of the list. Investopedia put together a fantastic breakdown of the best real estate valuation method you can utilize in the financial analysis.

  • Documentation Review

When conducting due diligence on real estate, it is essential to review all relevant documentation. This includes title documentation, property documentation, and legal documentation. Title documentation should include all documents pertaining to the title of the property, such as the deed, title insurance policy, and any easements or restrictions in place. Property documentation should include any documents related to the physical property, such as survey maps, appraisal reports, and inspection reports. Lastly, legal documentation should include documents related to the laws and regulations that affect the property, such as zoning ordinances, land use restrictions, and enforceable covenants. Each of these documents is necessary to review in order to get a full understanding of the property and its associated risks. It is important to obtain copies of all documents to ensure that they are accurate and up to date. Furthermore, it is important to consult with an experienced real estate attorney who can review the documents and provide guidance on any potential risks associated with the property.

  • Property Inspection

When it comes to real estate due diligence, one of the most important things to include in your checklist is a property inspection with a professional real estate inspector in your area. This should include an exterior inspection to make sure the condition of the property is as advertised and that there are no issues that need to be addressed. The interior inspection should include a thorough examination of all fixtures, systems, and appliances, as well as any potential health and safety concerns. Lastly, it is essential to carry out a comprehensive structural assessment to verify the property’s structural integrity. This assessment should encompass an examination of the foundation, roof, walls, and all other significant structural elements of the building to confirm their good condition and absence of potential concerns. Taking the time to properly inspect a property prior to purchase is essential and should always be included in your real estate due diligence checklist.

How an Arizona Real Estate Attorney Helps with Due Diligence

Due diligence is a critical component of any real estate investment. It involves researching the property, understanding its current and potential value, and learning about the local market. The due diligence process also includes evaluating the financials, such as operating expenses and anticipated return on investment. It is vital to gain a thorough comprehension of any potential hazards, such as zoning regulations and the possibility of legal actions. As with all real estate deals, assessing the property location and surrounding area is a key part of the process too. Finally, it is essential to have a thorough understanding of the contract and any other legal documents related to the transaction.  Savvy investors understand they need a team of experienced professionals to assist with this process.  Professional real estate agents, mortgage brokers, inspectors, title companies and experienced real estate attorneys are crucial to developing an effective real estate due diligence checklist and executing on it efficiently as you consider each potential deal.  Gottlieb Law specializes in Arizona real estate law and works with real estate investors of all types to make sure that each potential deal goes through the proper due diligence process.  Contact our firm today at 602-899-8188 to schedule an initial consultation or make an appointment on our contact us page.

 

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Forming an Arizona Limited Liability Company for Real Estate Investing
Forming an Arizona Limited Liability Company for Real Estate Investing 2560 1707 Gottlieb Law

A limited liability company (LLC) is a business structure designed to give certain limited liability protections to owners under state law. An LLC is a popular choice for real estate investors because it provides a means of protecting their personal assets from legal liabilities that may arise from the operation of the business. Forming a limited liability company in Arizona for real estate investors offers a range of benefits, including asset protection, tax advantages, and flexible organizational structures. LLCs provide their owners with the same limited liability protection as a corporation, but with the added benefit of pass-through taxation, meaning the business’s profits and losses are passed through to the owners and reported on their personal tax returns. Real estate investors can gain significant tax advantages with an LLC. Additionally, LLCs offer a more flexible organizational structure than corporations, allowing the owners to customize their internal operations and management. Arizona LLCs offer their owners the ability to manage and operate their businesses remotely, which is an obvious benefit for those looking to invest from out of state.  Here are some of the key things to understand if you are considering the formation of a limited liability company for your real estate investments.

Benefits of Forming a Limited Liability Company in Arizona

Forming a limited liability company in Arizona is an attractive option for real estate investors due to its ability to protect their personal assets, provide certain state and federal tax benefits, and offer a flexible organizational structure.  The benefits of forming an LLC in Arizona for real estate investors are numerous. One of the most obvious is the protection of personal assets. LLCs provide a layer of protection for investors by generally limiting their liability exposure to only the assets held by the LLC. This means that investors have the assurance that their personal assets are safe if the LLC faces any legal or financial issues. Another benefit of forming an LLC is the tax benefits they provide. LLCs are able to pass profits and losses through to the individual investors, allowing them to pay taxes on their personal returns at the individual rate. Lastly, LLCs offer flexibility to investors. LLCs are not required to have a fixed number of members, which allows investors to easily add or remove members as needed. Additionally, LLCs can be structured to provide for different levels of management and decision making, which allows investors to customize their LLCs to suit their particular needs. All of these factors make LLCs an attractive option for real estate investors in Arizona.

Arizona’s Laws for Limited Liability Companies 

Forming a limited liability company in Arizona for real estate investors can offer many benefits that can help to protect personal assets and provide certain state and federal tax benefits. The formation requirements for an LLC in Arizona are relatively uncomplicated and can be completed with just a few steps. The combination of these fees helps to ensure that the LLC remains in compliance with Arizona laws and regulations. In addition to the fees, real estate investors should also be aware of the other responsibilities that come with forming an LLC, such as keeping accurate records and filing annual tax returns. By understanding the formation requirements, initial fees, and ongoing fees associated with forming an LLC in Arizona, real estate investors will be able to take advantage of the many benefits that come with this type of business structure.

Considerations for Forming a Limited Liability Company 

As detailed, there are many benefits to forming an LLC for real estate investments.  However, there are some potential disadvantages to consider before deciding to form an LLC in Arizona. The main disadvantage is that LLCs are subject to certain restrictions under Arizona law, including limits on the number of members and the types of business activities that may be conducted. Additionally, LLCs may be subject to additional filing requirements, including the need to register with the Secretary of State, file annual reports, and pay taxes or fees. Therefore, real estate investors should seek professional advice to ensure that forming an LLC in Arizona is right for their investment plans and goals. An experienced real estate attorney can help ensure that the LLC complies with Arizona law and can provide guidance on the various tax and other benefits that come with LLC ownership. Ultimately, forming an LLC can be a great way for real estate investors to protect their personal assets and take advantage of certain state and federal tax benefits, but it is important to weigh the potential advantages and disadvantages before making a decision.

Moving Forward with Forming an LLC for Real Estate Investments in Arizona

Most real estate investors understand that property investments can be lucrative, but they also come with significant costs and risks.  Purchasing residential or commercial real estate with plans to lease the property means there will be risks of issues with the tenants or facility that can create legal exposure for the investor.  Setting up the appropriate legal structure can help shield your personal assets from those risks, create flexibility for operations and make it easier to add strategic partners.  A limited liability company in Arizona will typically be the best structure to take advantage of the benefits and provide protection against personal liabilities in the future.  Additionally, LLCs provide certain state and federal tax benefits, including the ability to file taxes as a pass-through entity, which means LLC members can deduct business expenses from their personal taxes. Furthermore, LLCs can help investors save money due to the LLC’s simplified accounting and reporting requirements. Finally, LLCs provide investors with the flexibility to choose how the business will be managed and structured.

The attorneys at Gottlieb Law routinely represent real estate investors in Arizona and assist with strategic planning, company formation, asset management, and real estate transactions.  Our firm is also prepared to represent your interests if any legal issues arise.  Contact our firm today at 602-899-8188 to schedule a consultation on any Arizona real estate needs or make an appointment on our contact us page.

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