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Fraudulent Misrepresentation in Arizona Real Estate - What Buyers and Sellers Need to Know - Gottlieb Law
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Fraudulent Misrepresentation in Arizona Real Estate: What Buyers and Sellers Need to Know
Fraudulent Misrepresentation in Arizona Real Estate: What Buyers and Sellers Need to Know 1536 1024 Gottlieb Law

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

Every real estate transaction, whether residential or commercial, relies on accurate information and honest communication between parties. When that trust is compromised through fraudulent misrepresentation, the fallout can be costly, stressful, and complex. These situations often go beyond obvious lies, involving strategic omissions, altered records, or statements that are technically true but intentionally misleading. Buyers and sellers alike can find themselves at risk, and the legal consequences are rarely simple.

This article breaks down what fraudulent misrepresentation actually looks like under Arizona law, how key statutes define and penalize deceptive practices, and what remedies are available when a real estate deal is tainted by false information. Whether you’re purchasing a home, selling investment property, or managing a commercial deal, knowing your legal protections is essential. Read on to understand some of the common warning signs, how courts approach these disputes, and how an experienced real estate lawyer can help you prevent or resolve them.

Defining Fraudulent Misrepresentation Under Arizona Law

In Arizona, fraudulent misrepresentation in real estate is far broader than a typical bait-and-switch. It can take many forms, including exaggerated marketing claims, the use of falsified or forged documents, or the deliberate concealment of facts that a reasonable buyer would consider important. What matters under Arizona law is not just whether a statement was made, but whether that statement, or omission, was intended to mislead a party entering into a real estate transaction.

Arizona statutes impose clear obligations on sellers and provide legal remedies for buyers who have been misled. These laws apply to both residential and commercial property transactions and are designed to maintain fairness and integrity in the real estate market.

Consumer Fraud Act (A.R.S. § 44‑1522)

Under the Arizona Consumer Fraud Act, it is illegal to mislead or withhold key facts when promoting or selling real estate, whether through false promises, deceptive claims, or deliberate omissions. The statute is written broadly and may apply to verbal statements, written communications, and even omissions that are likely to affect a buyer’s decision-making process.

Importantly, the law is not limited to traditional sales pitches or formal disclosures. It may apply to online listings, printed materials, and informal representations made during showings or negotiations. If a seller says or implies something with the intent to induce a buyer to act, and that representation is false or misleading, the buyer may have a valid claim under this statute. This protection is especially critical in competitive markets where buyers may be pressured to act quickly and rely on the information provided by the seller.

False or Groundless Recorded Documents Statute (A.R.S. § 33‑420)

This statute addresses a particularly damaging form of misrepresentation: the recording of false or groundless documents against a property. That might include a forged lien, a fraudulent notice of claim, or any document that creates the appearance of a legal interest where none actually exists. When a false document is recorded with the county recorder’s office, it can cloud the title, delay or derail transactions, and create unnecessary legal expenses for the rightful owner.

Under A.R.S. § 33‑420, anyone who knowingly causes a fraudulent document to be recorded can be held liable for statutory or actual damages. This includes a minimum penalty and, in some cases, treble damages, along with recovery of attorney fees. The statute also allows property owners to file a special action to remove the false document and clear title, restoring legal ownership and marketability.

Affidavit of Disclosure Waiver Prohibition (A.R.S. § 33‑422)

In certain real estate transactions, particularly those involving unimproved property outside city limits, Arizona law requires a seller to provide an Affidavit of Disclosure. This document is intended to inform the buyer about issues like access, utility availability, and legal compliance. Some sellers attempt to avoid future liability by including waiver language, suggesting that the buyer accepts the property “as is” or agrees not to hold the seller responsible for errors or omissions.

Arizona law explicitly voids any such waiver. A.R.S. § 33‑422 states that a seller cannot contractually avoid responsibility for misstatements or omissions in the affidavit. Buyers have the legal right to receive full and accurate disclosures, and they may cancel the sale within five days of being provided with the affidavit. This protection is critical, especially in transactions where a lack of infrastructure or other hidden issues may significantly affect the property’s usability or value. Note: even in real estate transactions where A.R.S. § 33‑422 does not apply, Arizona law does not generally allow a party to contract out of fraud.

Elements of a Fraudulent Misrepresentation Claims in Arizona Real Estate Cases

To successfully bring a claim for fraudulent misrepresentation in an Arizona real estate transaction, the plaintiff must establish a specific set of legal elements. These requirements are consistent across both residential and commercial disputes, and each must be proven with credible evidence for the claim to move forward. Arizona courts rely on this multi-part framework to determine whether a misrepresentation has occurred and whether it rises to the level of legal fraud.

1. A Representation or Omission Was Made

The first element involves the existence of a statement, omission, or act that conveyed false or misleading information. This representation may take many forms, including written communication, oral statements, advertising materials, visual presentations, or conduct that implies a certain fact. In the context of real estate, this could be a verbal assurance about a property’s condition, a line in a listing that overstates square footage, or the failure to mention a known defect or legal encumbrance.

2. The Representation Was False

To prove fraud, the plaintiff typically needs to demonstrate that the statement was false, even if it wasn’t an obvious or direct lie. Even a technically accurate statement can be considered false if it is misleading or omits key facts necessary to create a truthful picture. For example, saying a property “has no known issues” while failing to disclose prior water damage may satisfy this element, especially if the seller knew about the problem.

3. The Misstatement or Omission Was Material

Materiality is a critical element in any fraud claim. A misrepresentation is considered material if it involves a fact that would reasonably influence a person’s decision to purchase, finance, or otherwise invest in the property. Mere inaccuracy isn’t sufficient on its own to support a fraud claim. The misstatement must relate to something significant enough that the buyer’s decision might have changed if the truth had been known.

4. The Seller Was Aware the Information Was False or Acted With Reckless Disregard

What matters most is intent. The buyer must show that the seller knew the information was false. It is not necessary to prove that the seller intended to harm the buyer, but it must be shown that the seller had knowledge of the falsity.

5. The Misrepresentation Was Made With the Intent to Induce Reliance

The plaintiff must establish that the misrepresentation was not accidental or incidental. It must have been made with the purpose of influencing the buyer’s behavior. In real estate, this often means the seller made or allowed the misstatement to encourage the buyer to proceed with the transaction, complete the sale quickly, or waive certain protections such as inspections or appraisals.

6. The Buyer Was Unaware of the Truth

To sustain a fraud claim, the buyer must not have known that the representation was false at the time of the transaction. If the buyer had independent knowledge of the truth or learned of the issue before closing and chose to proceed anyway, this element may not be satisfied.

7. The Buyer Reasonably Relied on the Representation

The buyer’s reliance must have been reasonable under the circumstances. This does not mean the buyer was required to conduct exhaustive due diligence, but the court will consider whether the buyer acted prudently in relying on the seller’s statements. Arizona law does not impose a duty on buyers to investigate beyond what is reasonable under the circumstances. Courts will weigh whether the buyer had reason to trust the seller, particularly if the seller held a position of authority or exclusive knowledge.  If the seller was in a position of authority or had special knowledge, the court may give more weight to the buyer’s decision to rely on that representation.

8. The Buyer Suffered Actual Damages

Finally, the plaintiff must prove that they experienced financial harm as a result of the misrepresentation. This may include repair costs, a decrease in the property’s market value, loss of income from a commercial property, or other direct and consequential losses. The existence of damages is often the most heavily contested part of the case, particularly in commercial transactions where valuations and expectations can vary widely.

Generally, all of these factors must be proven for a fraudulent misrepresentation claim to hold up in court. Failing to prove even one can result in dismissal. That’s why it is essential for parties involved in a real estate dispute to seek legal advice early. An experienced real estate lawyer can help determine whether the facts support a viable claim and guide the process of gathering the evidence needed to move forward.

Common Examples and Case Law

Fraudulent misrepresentation in Arizona real estate often involves more than just overt lies. In many cases, the issue lies in what a seller chooses not to say. Silence, especially when it involves facts that could influence a buyer’s decision, can carry the same legal consequences as a false statement. Arizona law recognizes this and imposes a duty on sellers to be forthcoming about material facts that affect a property’s condition, value, or legal status.

Real-World Examples of Misrepresentation

One common scenario involves the intentional concealment of known physical defects. For example, a seller may attempt to cover up water damage or mold in a ceiling, hoping that a routine home inspection will overlook the problem. If the seller had prior knowledge of the issue and chose not to disclose it, this omission can form the basis of a fraud claim.

Boundary misstatements also raise red flags. A seller might market a property as having a larger yard by implying a boundary line that extends beyond the legal property limits. When the buyer later discovers, often through a survey, that part of the land is actually public easement or belongs to a neighboring parcel, the financial and legal implications can be considerable.

Misrepresentations can also occur in commercial transactions. A seller of an office building or retail space might fail to disclose zoning issues, non-compliant improvements, or ongoing environmental concerns that affect the property’s permissible use. In these cases, the failure to disclose can result in costly regulatory issues for the buyer post-closing.

 

Key Case: Hill v. Jones

Arizona case law reinforces the obligation of sellers to disclose material facts, even if the buyer fails to ask the right questions. In the landmark case Hill v. Jones, 151 Ariz. 81 (Ct. App. 1986), the court addressed whether a seller’s failure to disclose a past termite problem constituted fraud. The seller argued that because the buyer did not specifically inquire about termite damage, there was no duty to disclose. The court disagreed.

The court made it clear that sellers are legally obligated to share any known facts that could significantly impact the property’s value or appeal. The ruling made it clear that a seller cannot avoid liability simply because the buyer failed to ask a direct question. If the seller has knowledge of a fact that would reasonably influence a buyer’s decision, withholding that information can be just as deceptive as making a false statement.

The Hill v. Jones case continues to serve as a foundation in Arizona real estate fraud litigation. It is frequently cited in disputes involving nondisclosure and remains a critical reminder that full transparency is not just ethical but legally required.

Statute of Limitations and Defenses

Under Arizona law, the ability to bring a claim for fraudulent misrepresentation is not unlimited. In most cases, a party must file suit within three years from the date the fraud was discovered, or from the date when the party reasonably should have discovered it through the exercise of due diligence. This time limit is set by A.R.S. § 12-543 and applies to both residential and commercial real estate disputes involving fraud.

The “discovery rule” is particularly important in these cases. Unlike some legal claims that are strictly tied to the date of the transaction, fraud claims recognize that the harm may not become immediately apparent. For instance, a buyer may only learn of a misrepresentation about foundation damage or zoning violations months—or even years—after closing. Once the buyer becomes aware of the issue, or once the facts would have put a reasonable person on notice of the fraud, the three-year period begins to run.

Failing to bring a claim within this statutory timeframe can result in dismissal, regardless of the strength of the underlying facts. That is why it is critical for buyers who suspect misrepresentation to consult legal counsel as soon as possible, so that deadlines are not missed and important evidence can be preserved. 

Common Defenses Available to Sellers

While Arizona law imposes clear duties on sellers, it also provides several valid defenses that may be used to contest a fraud allegation. These defenses can be highly effective in shifting liability or weakening a buyer’s claim when supported by the facts.

  1. The Buyer Had Prior Knowledge of the Issue

If the buyer already knew about the alleged defect or misrepresentation before closing, they may be barred from recovering damages. For example, if a seller disclosed a known plumbing issue (or if the buyer learned about it from an inspection report) during escrow and the buyer acknowledged it but chose to proceed with the purchase anyway, the seller may argue that there was no reliance or concealment.

  1. The Misstatement Was Not Material

A seller may also argue that the alleged misrepresentation involved a minor or insignificant detail that would not reasonably affect a buyer’s decision to purchase the property. Courts focus on whether the information would have influenced a prudent buyer’s decision-making, not just whether the buyer personally found it important. If the statement was trivial or had no bearing on the property’s value or desirability, the materiality requirement may not be met.

  1. The Buyer Did Not Reasonably Rely on the Representation

Another common defense is that the buyer failed to act reasonably in relying on the seller’s statements. Arizona law requires that a buyer’s reliance be justified under the circumstances. If the buyer had access to information that contradicted the seller’s claim, or if the issue could have been discovered through a standard inspection or basic walk-through, the seller may argue that the buyer’s reliance was not justified.

In many real estate disputes, the strength of these defenses depends on the buyer’s level of diligence. When a buyer skips important steps such as hiring a licensed inspector, reviewing public records, or asking for clarification on ambiguous disclosures, their claim may be undermined. On the other hand, buyers who act prudently and document their efforts to verify the seller’s statements are often in a stronger legal position.

Understanding both the statute of limitations and the available defenses is crucial for anyone considering or facing a claim of fraudulent misrepresentation. These issues often determine whether a case proceeds or is dismissed before trial.

Remedies Available to Buyers

When fraudulent misrepresentation is established, Arizona law provides several meaningful remedies aimed at restoring the buyer’s position and addressing the harm caused.

While not a common remedy, Buyers may seek to be awarded rescission of the property, which cancels the transaction and returns both parties to their pre-sale positions. This is often paired with restitution, allowing the buyer to recover funds paid or transfer ownership back to the seller.

In cases where the buyer chooses to keep the property, monetary damages may be awarded for loss in value, repair costs, or related financial harm such as lost rental income or business disruption in commercial deals.

If the fraud involves a recorded false document, A.R.S. § 33‑420 allows the court to award treble damages and attorney fees, creating a strong deterrent against false filings.

Violations of the Consumer Fraud Act may also result in civil penalties, further increasing the financial exposure for the seller.

In high-value transactions, these remedies can amount to significant recoveries. Acting quickly with the support of legal counsel helps ensure buyers preserve their rights and pursue the most appropriate course of action.

For more detailed information on your rights if you have been the victim of real estate fraud, check out our article Understanding Your Rights as a Victim of Real Estate Fraud.

We also published an article on how multi-party real estate fraud litigation works in Arizona that can provide some helpful context on why these cases can be time-consuming and complex.

How an Experienced Real Estate Lawyer Can Help

Whether you’re a buyer facing an undisclosed defect, a seller accused of misrepresentation, or a developer tangled in faulty documentation, an experienced real estate lawyer can help protect your interests at every stage. A real estate lawyer can assess whether fraud occurred, help preserve and present key evidence, and pursue or defend legal claims with precision. Legal counsel is also essential in preventative scenarios, including contract drafting, disclosure review, and title verification. Having a knowledgeable lawyer on your side early in the process helps avoid missteps and strengthens your position should a dispute arise.

Avoiding Real Estate Fraud in Arizona: What You Should Know and How Gottlieb Law Can Help

Fraudulent misrepresentation can quietly unravel even the most promising real estate deal. Arizona law takes a strong stance against deception in property transactions, but the burden of uncovering it—and acting in time—falls largely on the buyer or seller who has been affected. Understanding what counts as a material omission, how statutes like A.R.S. § 44‑1522 and § 33‑420 apply, and what timeline governs your legal rights can make the difference between preserving your investment and walking away with significant losses. In both residential and commercial settings, early diligence, clear documentation, and timely legal advice are essential. What many people miss is that fraud isn’t always obvious. Sometimes it’s as subtle as a seller leaving out key details or a listing presenting an incomplete picture.

That’s where Gottlieb Law provides unmatched value. The firm helps clients identify risk factors before they escalate, correct issues like fraudulent liens and flawed disclosures, and pursue appropriate remedies when fraud has occurred. From contract review to title clearing and litigation, Gottlieb Law brings depth, experience, and strategic insight to every case. If you’re navigating a complex transaction, confronting a misrepresentation, or unsure whether your legal rights have been compromised, Gottlieb Law is ready to help you protect your investment and move forward with clarity.

Call Gottlieb Law today at 602-899-8188 or use our Contact Us page here to schedule your initial consultation.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

 

Arizona Commercial Lease Breaches and Dispute Resolution - Gottlieb Law
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Commercial Lease Breaches and Dispute Resolution in Arizona
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Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.


Why Understanding Commercial Lease Disputes in Arizona Matters

In Arizona’s fast-moving commercial market, leases form the foundation of countless business operations, from warehouse spaces in Tempe to storefronts in Scottsdale. And when one side fails to meet their lease obligations, the fallout can be expensive and disruptive. Whether you’re a landlord trying to enforce an agreement or a tenant facing unexpected claims, it’s important to understand what qualifies as a breach, what rights and responsibilities come with it, and how to resolve disputes when they arise.

Lease issues aren’t just paperwork problems. They’re legal matters that can have a serious financial impact. Smart planning backed by the right insight can shield your business from avoidable risks and unnecessary costs.

What Counts as a Commercial Lease Breach in Arizona?

While the terms “breach” and “default” are often used interchangeably, most commercial leases in Arizona define specific defaults that trigger legal remedies—so whether a violation gives rise to immediate consequences often depends on the language of the lease.

Understanding what constitutes a commercial lease breach is the first step in protecting your rights, whether you’re the landlord enforcing the lease or the tenant defending your position. In Arizona, these disputes are rarely black and white. Lease agreements are often packed with complex terms, conditions, and legal language that can make it difficult to determine when a breach has actually occurred—and what happens next.

Defining a Commercial Lease Default or Breach

When either the landlord or tenant fails to follow the terms laid out in the lease, it’s generally a default or violation of the commercial lease. These obligations are laid out in the lease contract and can involve everything from timely rent payments to property maintenance or restrictions on how the space is used.

A default can be either explicit, such as failing to pay rent, or implied, like interfering with the other party’s quiet enjoyment of the premises. Either way, Arizona courts look at the specific language of the lease and the impact of the violation before deciding what remedies are available.

Common Triggers That Lead to Lease Disputes

Some lease violations happen more often than others. Below are the issues that most frequently lead to legal conflict between commercial landlords and tenants:

1. Non-Payment or Late Payment of Rent

This is one of the most common and straightforward reasons landlords pursue legal action. Unless the lease provides a grace period or alternative terms, tenants who consistently pay late—or stop paying altogether—are typically in default.

2. Unauthorized Alterations to the Property

Commercial tenants may want to modify the leased space to better suit their business. However, if they move forward without written approval from the landlord, particularly with structural or electrical changes, it may be considered a violation of the lease.

Even cosmetic alterations can violate the lease if they’re done without consent or if they affect the building’s value, safety, or code compliance. Most leases spell out what’s allowed and require formal approval before any work begins.

3. Violation of Use Clauses

Commercial leases often contain use clauses that restrict the type of business activity allowed on the premises. For instance, a lease may prohibit using the space for food service, manufacturing, or high-traffic retail operations. Tenants that deviate from the permitted use risk violating the lease.

In multi-tenant buildings, these clauses are often used to protect existing tenants and maintain a balanced tenant mix. Landlords may have legal standing to enforce these terms even if the tenant’s new use seems harmless.

4. Failure to Maintain the Premises

Maintenance obligations are typically outlined in the lease and can be shared between the landlord and tenant depending on the lease type (e.g., triple-net vs. gross lease). Failing to handle responsibilities like interior repairs, general upkeep, or HVAC maintenance can put tenants in breach of their lease.

If the lack of maintenance creates safety hazards or reduces the value of the property, landlords may have grounds to terminate the lease or pursue damages, depending on the lease provisions.

Material vs. Immaterial Breaches Under Arizona Law

Not all breaches are equal in the eyes of the law. In Arizona, the courts draw a sharp distinction between material breaches and immaterial breaches when determining legal remedies.

What Is a Material Breach?

When a breach strikes at the main purpose of the lease, it’s considered material. In these cases, the affected party may have the legal right to walk away from the lease or seek compensation. Examples of material breaches include:

  • Long-term non-payment of rent
  • Using the space for a prohibited business
  • Major alterations that affect the structure or safety of the building
  • Repeated violations after warnings or notices

The Arizona Supreme Court affirmed this standard in the case Foundation Development Corp. v. Loehmann’s, where it held that only substantial breaches that go to the heart of the lease justify early termination. Courts are required to assess the actual harm caused, not just whether the contract was technically violated.

What Is an Immaterial Breach?

An immaterial breach is one that, while technically a violation, doesn’t significantly impact the other party’s rights or benefits under the lease. Examples might include:

  • Paying rent a few days late on occasion
  • Making minor improvements with verbal but not written approval
  • Administrative errors in providing notice

While tenants should avoid assuming leniency, Arizona courts may not enforce a lease termination or severe penalties for immaterial breaches unless they become habitual or escalate into larger issues. That said, repeated small breaches can signal noncompliance and build a case for legal action later.

Lease Language Plays a Crucial Role

Arizona law puts significant weight on the exact wording in the lease agreement. The specificity of the terms will often determine whether an issue rises to the level of a breach, what notice is required, and what remedies are available.

For example:

  • Cure provisions may require the breaching party to fix the issue within a certain number of days after receiving notice.
  • Waiver clauses may prevent parties from enforcing certain rights if they’ve ignored breaches in the past.
  • Liquidated damages clauses might predefine the financial consequences of specific breaches.

Because each lease is different, identifying whether a breach has occurred and what options are available requires careful analysis of the contract language.

How to Know If You’re Facing a Breach

If you’re a landlord noticing unusual activity at your property, or a tenant receiving written notices or threats of eviction, it’s essential to take a step back and assess the situation with legal help.

Ask yourself:

  • Has the other party clearly failed to perform a duty defined in the lease?
  • Is the breach impacting your ability to use or benefit from the property?
  • Has the issue been addressed through proper notice or communication?
  • Does the lease include terms that limit or expand your remedies?

When to Seek Legal Guidance on a Commercial Lease Dispute

In many cases, the line between a minor issue and a material breach is thin. One party may believe they’re acting within their rights, while the other sees a serious violation. Arizona courts don’t always side with one party simply because a clause was technically broken—they look at fairness, impact, and legal precedent.

That’s why hiring a skilled real estate law attorney early can save time, money, and complications. Whether you’re negotiating compliance, drafting a cure notice, or preparing for potential litigation, having someone who understands Arizona commercial lease disputes is key to protecting your interests.

What Happens After a Commercial Lease Breach in Arizona

Once a breach of a commercial lease occurs, both parties enter a critical phase where legal obligations, financial exposure, and risk mitigation come sharply into focus. What happens next comes down to the type of breach, the language in the lease, and how each party decides to handle the situation. Arizona law offers several ways to resolve these disputes, but navigating them requires clarity, communication, and often legal guidance.

Legal and Financial Consequences for Tenants and Landlords

Whether you’re a tenant facing claims of noncompliance or a landlord trying to enforce the lease, the aftermath of a breach can carry serious consequences.

If You’re a Commercial Tenant

Tenants on the receiving end of a breach claim may face a range of financial and legal repercussions depending on the lease language and how the issue is handled.

  • Unpaid Rent: In many Arizona leases, landlords can demand unpaid rent and other damages.
  • Legal Fees and Expenses: Lease agreements often include a provision stating that the losing party in any legal dispute must cover the winning party’s attorney’s fees. This can leave tenants footing the bill for both sides of the dispute, adding even more financial pressure.
  • Eviction Proceedings: For serious breaches, landlords may initiate eviction through the court system. Commercial evictions in Arizona follow a legal process that starts with notice and can escalate to formal removal through a court order. Ignoring or delaying response to an eviction notice usually makes the situation worse.  Alternatively, if the lease permits it, a landlord may pursue a lockout remedy.

If You’re a Commercial Landlord

Landlords are often quick to act when a tenant breaches the lease, but it’s just as important for landlords to follow the law carefully to avoid triggering legal claims of their own.

  • Risk of Wrongful Eviction: Acting too aggressively or skipping legal steps can backfire. A landlord who changes the locks or forces a tenant out without following court procedures could be sued for wrongful eviction, which might result in damages, loss of rent, or even punitive awards.
  • Potential Landlord Breaches and Counterclaims: Tenants can also claim that the landlord breached the lease—especially in cases where landlords fail to provide necessary repairs, utilities, or access to the premises. These counterclaims can shift liability and even cancel out amounts the landlord is seeking to recover.

How Commercial Lease Disputes Are Handled in Arizona

Many lease conflicts can be resolved without ever stepping into a courtroom. In fact, Arizona offers several paths to resolve lease conflicts that can save time, money, and preserve business relationships.

Direct Negotiation

Often overlooked, simple communication is the fastest way to resolve many lease disputes. If both sides are willing to talk, a direct and well-documented negotiation may lead to a workable agreement without escalating further. Many breaches occur due to miscommunication or unclear expectations, which can sometimes be resolved with clarification or compromise.

Mediation

Through mediation, a neutral facilitator helps the parties communicate more effectively and explore possible solutions. Since it’s non-binding, both sides stay in control of the outcome. Mediation is often a smart choice when both parties want to resolve the issue without damaging their professional relationship or taking on the expense of a lawsuit. For example, if a tenant falls behind on rent due to a temporary cash flow issue, mediation can give both sides a chance to negotiate new payment terms without heading straight to court.

Arbitration

Arbitration takes a more formal approach than mediation, and whether the outcome is final depends on what the lease agreement allows. An arbitrator reviews the case and issues a decision. While arbitration is faster and less expensive than a court case, the outcome may be final and harder to appeal. 

Litigation

When negotiations break down or one party refuses to comply, litigation becomes the final option. These disputes are handled in courts like the Maricopa County Superior Court, where judges can enforce lease terms, issue eviction orders, or award damages.

Taking a dispute to court requires a well-planned strategy, since it often involves high costs, long timelines, and public records. That said, it may be necessary in high-stakes cases involving large financial losses or repeated lease violations.

Preventing Lease Disputes Before They Happen

The best lease disputes are the ones that never occur. Landlords and tenants alike can lower the risk of future disputes by putting the right measures in place from day one of the lease.

Draft Clear, Detailed Leases

A vague lease is a recipe for conflict. Strong commercial leases in Arizona should clearly define rent amounts, payment schedules, maintenance obligations, permitted uses, insurance requirements, dispute resolution processes, and termination clauses. Ambiguities can lead to disagreements down the line, especially when one party interprets a clause differently than the other.

Establish Ongoing Communication

Disputes often start small and snowball when no one addresses them early. Whether it’s a missed rent payment, a noisy neighbor complaint, or an unexpected repair bill, a quick phone call or formal letter can often stop things from escalating. Building communication protocols into your lease, such as specifying how and when notice must be delivered, also makes resolving minor issues easier.

Have Legal Review from the Start

Before signing any commercial lease, both parties should have a qualified real estate law attorney review the terms. Arizona law gives significant power to what’s written in the lease, so making sure the contract is fair, balanced, and enforceable is critical. A good legal review can spot problematic clauses, negotiate better terms, and avoid costly litigation in the future.

Experienced Legal Guidance for Commercial Lease Disputes in Arizona

Commercial lease disputes in Arizona often go beyond basic contract enforcement, whether they stem from non-payment, unauthorized use of the property, or complex material breach claims. These issues can impact nearly every part of a business’s financial stability and daily operations. As this article details, the difference between a manageable disagreement and a costly legal battle often comes down to timing, documentation, and clarity of lease terms. Proactively structuring strong agreements, maintaining open communication, and knowing when to escalate through negotiation, mediation, or legal channels can save both landlords and tenants considerable time and money. And when disputes arise, understanding Arizona’s legal thresholds for enforcement or termination is key to making smart, strategic decisions.

That’s where Gottlieb Law delivers real value. Our experienced legal team understands Arizona real estate law and applies it with precision, foresight, and a strong commitment to protecting what matters most to their clients. From enforcing lease terms and pursuing damages to defending tenants facing wrongful claims, Gottlieb Law brings decades of hands-on experience with commercial lease breaches, dispute resolution, and litigation.

Call Gottlieb Law today at 602-899-8188 or use our Contact Us page here to schedule your initial consultation.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

Construction Defect Litigation in Arizona - Gottlieb Law
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Arizona Construction Defect Litigation: What Property Owners Need to Know
Arizona Construction Defect Litigation: What Property Owners Need to Know 1536 1024 Gottlieb Law

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.


Construction defect litigation in Arizona isn’t just about a crack in the wall or a leaky pipe. It’s about protecting one of the biggest investments you’ll ever make—your property. Construction defects can cause serious damage over time and lead to costly repairs if left unaddressed.

In Arizona, there’s a specific legal framework that deals with these issues, and it’s designed to balance the rights of homeowners, contractors, and developers. But here’s the catch: you’ve got to know the rules before you can enforce your rights.

Common Types of Construction Defects

Construction defects can range from minor inconveniences to major structural failures. Some are apparent right after the project is completed, while others remain hidden for years, quietly causing damage beneath the surface. Understanding the specific categories of defects can help property owners in Arizona figure out what they’re facing, how serious the issue might be, and what kind of response is needed. It also helps when communicating with contractors, inspectors, and legal professionals.

Design Deficiencies

Design deficiencies are problems that begin long before construction even starts. These issues come from errors or oversights in the architectural or engineering plans. In some cases, the design may fail to meet local building codes. In others, it may include unrealistic or unsafe structural specifications. For example, if an engineer miscalculates the load-bearing requirements for a roof or balcony, the result could be sagging supports, premature wear, or even partial collapse. Identifying design flaws typically requires expert evaluation from engineers or architects who can analyze plans and compare them to the actual construction.

Material Deficiencies

Material defects occur when the products used during construction are substandard, deteriorate too quickly, or were never appropriate for the job in the first place. These defects can stem from manufacturers, suppliers, or even from the contractor’s decision-making. Common examples include siding that warps under normal weather conditions, tiles that crack easily, or insulation that fails to provide the promised energy efficiency. In Arizona, where intense heat and seasonal monsoons are factors, improper materials can lead to faster-than-expected breakdowns. Even high-quality construction work can be compromised if the materials themselves are flawed or poorly matched to the local climate.

Construction or Workmanship Deficiencies

This category covers a wide range of problems tied directly to how the building was put together. Workmanship issues are caused by poor execution during construction, whether due to inexperience, rushed labor, or a lack of supervision. Signs of workmanship defects include crooked framing, uneven flooring, faulty electrical systems, misaligned doors or windows, and leaky plumbing. These defects may be visible right away or may only become noticeable after regular use begins. In some cases, the outward appearance looks fine, but improper installation causes long-term damage behind the walls or under the floors.

Subsurface or Geotechnical Problems

Issues beneath the ground are often the most costly and dangerous. Subsurface defects involve problems with the soil or the way the foundation interacts with the land it sits on. These problems can result from poor site analysis, failure to follow geotechnical recommendations, or shortcuts during soil compaction and grading. Arizona’s desert soil composition can pose unique challenges, including expansive clay that swells with moisture and then contracts during dry spells. If these conditions aren’t properly addressed before construction, the result can be shifting slabs, cracked foundations, or major structural instability. These issues usually require input from geotechnical engineers and may lead to extensive and expensive remediation work.

Legal Framework Governing Construction Defects in Arizona

Navigating Arizona’s construction defect laws requires a clear understanding of how the legal system treats these cases. The rules are structured, the timelines are strict, and any misstep can seriously impact your ability to pursue compensation. If you’re a homeowner, knowing how the legal framework works is essential.

Statute of Limitations and Statute of Repose

Arizona law sets specific deadlines for when a construction defect claim must be filed. Property owners generally have eight years from the date the construction was substantially completed to take legal action. If a defect is discovered during that eighth year, the law allows one additional year to file a claim. That extends the window to a maximum of nine years, but only under very specific circumstances. These timelines are not flexible. Once they pass, it becomes extremely difficult—if not impossible—to bring a successful claim, no matter how serious the defect is.

Implied Warranty of Workmanship and Habitability

In Arizona, there’s a built-in legal protection for homeowners that doesn’t need to be written into a contract. This is known as the implied warranty of workmanship and habitability. It guarantees that a new home was built with reasonable care and is fit for habitation. Importantly, this warranty extends beyond the original buyer—even second or third homeowners can bring a claim. Arizona courts do not require a direct contract between the buyer and the builder for this warranty to apply. However, claims involving subcontractors or material suppliers may be more complex and are often pursued under different legal theories, such as negligence or product liability.

The Economic Loss Doctrine

Arizona applies the economic loss doctrine to construction defect claims, which limits when a property owner can sue for negligence. If the only harm is financial—such as the cost to repair a defective roof or faulty plumbing—then the claim must usually be brought under contract or warranty law, not negligence. This doctrine draws a clear line between tort claims (like negligence) and contract disputes.

However, there are important exceptions. If a construction defect causes personal injury or damages property outside the scope of the original construction contract, then a tort claim may still be available.

For example, if faulty electrical work causes a fire that spreads beyond the home addition covered in the contract, the owner may have a valid negligence claim for damage to the rest of the property.

Understanding where your case falls under this doctrine is critical—and something an experienced Arizona construction defect attorney can evaluate right away.

Pre-Litigation Procedures: Arizona’s Purchaser Dwelling Act (PDA)

Before filing a lawsuit over construction defects, Arizona law requires property owners to follow specific pre-litigation steps. These procedures are outlined in the Arizona Purchaser Dwelling Act and are meant to create an opportunity for resolution before the legal system gets involved. The goal is to give the builder a chance to correct the issue and possibly avoid a drawn-out court case.

Notice Requirements

To start the process, homeowners must provide the contractor with a written notice that clearly describes the alleged defects. The notice must be specific enough to identify what parts of the home are affected and what type of defect is being claimed. General complaints or vague statements won’t meet the requirements of the Act. This written notice triggers the rest of the timeline and is an essential part of preserving your right to file a lawsuit if the issue is not resolved.

Contractor’s Right to Repair

After receiving the notice, the contractor has the legal right to inspect the property. They are also allowed to propose a solution, which could involve repairs, financial compensation, or both. The contractor does not have to accept blame to make an offer. However, they must make a good-faith effort to respond to the claims. Ignoring the notice or failing to take reasonable action could open the door to litigation. At this stage, keeping records of communications and contractor visits can be critical for building a case if the issue proceeds to court.

Tolling of Statutory Periods

During the pre-litigation process, Arizona law temporarily pauses the countdown on the statute of limitations. This is known as tolling. While it doesn’t give an unlimited extension, it does provide extra time while both sides engage in the notice and repair phase. This pause allows homeowners to pursue resolution without risking their right to file a claim simply because time is running out. Once the process concludes, the clock resumes, so it’s important to keep track of dates and deadlines throughout.

Dispute Resolution Mechanisms for Construction Defects

When pre-litigation efforts under the Arizona Purchaser Dwelling Act fail to bring a resolution, property owners must turn to the next phase. What happens next will largely depend on the language in your original construction contract. Some agreements spell out a clear dispute resolution process, while others leave that door wide open. Understanding your options is key to choosing the right path forward and avoiding unnecessary delays or costs.

Alternative Dispute Resolution (ADR)

Many construction contracts include mandatory alternative dispute resolution provisions. These often require the parties to attempt mediation or arbitration before filing a lawsuit. These methods are designed to be more efficient than traditional court proceedings and can offer a private setting to work through disagreements.

Mediation involves a neutral third party who helps both sides negotiate a resolution. The mediator does not make a binding decision but instead facilitates discussion in hopes of reaching a mutual agreement. It is typically less formal, less expensive, and faster than a courtroom battle.

Arbitration, on the other hand, is more structured. A neutral arbitrator hears evidence from both sides and then makes a decision, which is often binding. This means the outcome can be enforced like a court judgment. Arbitration can resemble a mini-trial, though the procedures are usually more streamlined than litigation. Some contracts may even dictate which arbitration service must be used or specify the number of arbitrators involved.

Before beginning either process, it’s important to carefully review your contract. Some clauses may require you to engage in ADR before you can even consider taking legal action. Failing to follow those terms can delay your claim or result in dismissal altogether.

Litigation

If alternative dispute resolution is not included in your contract, or if it fails to produce a satisfactory outcome, then the next step is filing a lawsuit in civil court. Litigation is a more formal and often lengthier process, but in some cases, it is the only way to resolve deeply contested or complex construction defect issues.

Pursuing litigation means entering Arizona’s civil legal system, which comes with procedural rules, filing deadlines, and evidentiary standards. You will likely need expert witnesses who can speak to the nature of the defects, the quality of the construction, and the appropriate method and cost of repair. Courts in Arizona expect detailed documentation, including inspection reports, correspondence with contractors, and repair estimates.

While litigation may take longer, it provides the structure of a courtroom setting and allows a judge or jury to determine liability and award damages. For major defects or high-stakes claims, it may offer the clearest path to a meaningful resolution.

What Property Owners Should Do When Facing Construction Defects

If you’re a homeowner dealing with a newly discovered crack, for example, construction defects require immediate and informed action. Addressing the issue the right way from the start can strengthen your position, help preserve your legal rights, and improve the chances of a successful resolution.

This section breaks down what property owners need to do in Arizona construction defect claims.

Step One: Gather and Organize All Documentation

Strong documentation is the foundation of any successful construction defect claim. From the moment you notice something that seems off, start creating a record. Photos of the damage, copies of repair estimates, builder warranties, inspection reports, and even casual emails with contractors can all become key evidence.

Be specific with dates and keep a running log of any communications related to the defect. If a contractor visits your home or promises a fix, make a note of what was said and when. If you send a formal notice under the Arizona Purchaser Dwelling Act, save a copy and record when and how it was delivered.

The more organized your documentation, the easier it will be for an attorney or expert to evaluate your case.

Step Two: Review Your Construction Contract and Warranties

Before you contact the builder or bring in outside help, take a close look at your original construction or purchase contract. Many agreements include specific provisions that affect how disputes must be handled. You may find mandatory arbitration clauses, warranty exclusions, or deadlines for reporting problems.

Understanding what your contract says about defect resolution can help you avoid procedural mistakes that might weaken your claim. If something isn’t clear, this is a good time to reach out to a construction defect attorney for guidance.

Step Three: Seek Input from Legal and Technical Professionals

No matter how much research you do, there’s no substitute for professional insight. A qualified construction defect attorney, such as the team at Gottlieb Law, can review your documentation, explain your legal options, and ensure that you meet all required deadlines under Arizona law.

Alongside legal help, you’ll likely need a licensed contractor, structural engineer, or home inspector to provide an independent assessment of the defect. Their expertise can confirm whether the problem was caused by poor workmanship, faulty materials, or a more serious design or subsurface issue.

Bringing in both legal and technical professionals early in the process gives you a much clearer path forward and helps you avoid delays that can cost you later.

Final Thoughts: Acting Early Makes All the Difference

Identifying construction defects early and taking informed action is the best way to protect your property investment. From documenting the damage and understanding your contract, to seeking advice and knowing your legal rights, each step matters.

If you’re unsure how to move forward, the attorneys at Gottlieb Law can help you understand your options and develop a strategy that makes sense for your situation. Their team handles both individual claims and large-scale HOA litigation, making them a trusted resource for property owners across Arizona.

Protecting Your Property from Construction Defects in Arizona

Construction defect claims are rarely straightforward. From tight deadlines under Arizona’s statute of limitations to mandatory pre-litigation steps outlined in the Purchaser Dwelling Act, there’s a lot to navigate. Whether you’re dealing with structural flaws, material failures, or workmanship issues, knowing where your responsibilities begin and how Arizona law supports your rights is essential. The earlier you document problems, understand your contract, and consult with professionals, the stronger your position will be.

Gottlieb Law provides experienced legal guidance for property owners and homeowners’ associations facing construction defect disputes in Arizona. Their team understands the complexities of this area of law and works closely with clients to assess claims, enforce repair obligations, and recover damages. Whether it’s a single-family home or a community-wide issue involving an HOA, Gottlieb Law is equipped to help you move forward with clarity and confidence.

Call Gottlieb Law today at 602-899-8188 or use our Contact Us page here to schedule your initial consultation.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

 

Multi-Party Real Estate Fraud Litigation in Arizona - Gottlieb Law
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How Multi-Party Real Estate Fraud Litigation in Arizona Works and Why These Cases Are So Complex
How Multi-Party Real Estate Fraud Litigation in Arizona Works and Why These Cases Are So Complex 1651 1101 Gottlieb Law

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.


When fraud happens in real estate, it’s often more than just one rogue agent or shady investor. The recent Arizona v. Cameron Jones et al case made that crystal clear, exposing a coordinated effort involving multiple players and institutions allegedly targeting vulnerable homeowners.

This follow-up article breaks down how multi-party real estate fraud unfolds in Arizona, why these cases are so difficult to untangle, and how the legal system is working to address them. If you’ve been affected by suspicious property transactions or think something wasn’t right in a past deal, this is essential reading.

Recent Real Estate Fraud Cases in Arizona: The March 2025 Foreclosure Scheme

To understand just how serious multi-party real estate fraud has become in Arizona, take a closer look at the lawsuit filed in March 2025 by the Attorney General. Known formally as Arizona v. Cameron Jones et al., this case marked a turning point in how the state is confronting coordinated property fraud. We broke down the key claims in our recent article detailing the landmark foreclosure fraud lawsuit in Arizona, which outlines what every homeowner, investor, and real estate professional needs to know.

According to the lawsuit, several individuals and corporate entities targeted homeowners who were already in financial distress and at risk of losing their homes. These defendants claimed to represent charitable organizations offering help to stop foreclosure, but the real goal was to transfer title and drain any remaining equity from the property. In many cases, the homeowners believed they were signing documents to save their homes, only to find out they had unknowingly signed them away.

What sets this case apart is the structure behind the fraud. It wasn’t a single person running a con. It was a coordinated effort involving real estate operators, title companies, and connected entities that allegedly worked together to create the appearance of legitimacy. Every part of the process was designed to mislead, from the initial contact to the final property transfer.

The lawsuit points to violations of the Arizona Consumer Fraud Act and the Arizona Racketeering Act, both of which provide the legal tools needed to pursue cases involving widespread deception and organized schemes. This is exactly the kind of situation where multi-party real estate fraud litigation becomes necessary. It allows the state to bring legal action against everyone involved, not just the face of the operation.

As real estate markets continue to fluctuate, bad actors are finding new ways to exploit distressed homeowners. That’s why legal professionals, lenders, and property owners alike need to stay alert and informed.

The Legal Framework Behind Real Estate Fraud Cases in Arizona

Arizona’s legal system is built to handle the kind of complex, multi-layered real estate fraud seen in cases like the foreclosure equity stripping scheme alleged to have occurred by the defendants in the State of Arizona v Cameron Jones, et al.. The state has long-standing statutes that are specifically designed to bring order to property transactions and hold fraudulent actors accountable when things go wrong.

Arizona’s Statute of Frauds (A.R.S. § 44-101)

At the foundation is the Statute of Frauds, codified under A.R.S. § 44-101. This law requires that certain types of agreements, including nearly all contracts involving real estate, must be documented in writing to be legally valid unless an exception applies. Verbal agreements or handshake deals simply don’t generally hold up under this statute.

Its purpose is straightforward. When a real estate transaction involves large sums of money, property rights, and long-term commitments, written documentation becomes critical. This requirement not only protects buyers and sellers but also serves as a key tool in identifying and prosecuting fraudulent activity. When there is no paper trail, it becomes easier for deceptive individuals to manipulate the process. The Statute of Frauds helps eliminate that ambiguity and creates a clear standard of proof.

Arizona Consumer Fraud Act and Racketeering Act

Two other statutes that frequently come into play in fraud cases are the Arizona Consumer Fraud Act and the Arizona Racketeering Act. Both are central to the Attorney General’s case against the defendants in the March 2025 lawsuit.

The Consumer Fraud Act is designed to protect Arizona residents from deceptive practices in the marketplace, including those that occur during real estate transactions. It addresses any misrepresentation, omission of material facts, or other dishonest conduct that may mislead consumers into making financial decisions under false pretenses. This applies to homeowners who may be tricked into signing over property rights, investors misled about a property’s value, or buyers lured into illegitimate deals.

The Racketeering Act comes into play when fraud isn’t limited to one individual. It provides legal grounds for the state to pursue civil remedies or criminal charges against groups of people or businesses engaged in coordinated fraudulent activity. This is especially important in multi-party real estate fraud cases, where different entities—such as title companies, real estate operators, and shell corporations—may each play a role in an organized scheme.  It is important to note that broad financial penalties and remedies can be sought if such a claim is brought.

When these laws are used together, they allow Arizona prosecutors and civil lawyers to address the full scope of the wrongdoing and pursue meaningful legal consequences. For homeowners and investors, understanding these protections is the first step toward taking action if fraud is suspected.

The Real Challenges of Multi-Party Real Estate Litigation

When fraudulent activity involves multiple individuals and entities working in coordination, the legal complexity increases exponentially. These cases are rarely resolved through a simple lawsuit against a single bad actor. Instead, the courts must unravel a network of roles, responsibilities, and overlapping conduct that often spans months or even years.

What makes these cases especially difficult to prosecute or defend comes down to three key areas.

Overlapping Legal Strategies and Conflicting Interests

Each party named in the lawsuit is likely to have its own legal counsel, and with that comes competing strategies, shifting blame, and motions that can conflict with one another. What one defendant wants to settle, another may want to fight. This dynamic creates a procedural maze that slows down litigation and requires the court to constantly manage the flow of filings, deadlines, and discovery requests across multiple parties.

Disentangling Individual Responsibility from Group Conduct

In a coordinated fraud scheme, not every participant plays the same role. One person may have drafted the misleading paperwork, while another facilitated the transfer of title or handled the funds. Courts must parse out who did what, whether they acted knowingly, and how much each individual’s actions contributed to the harm. This evaluation isn’t always straightforward, especially when some defendants claim they were unaware of the broader scheme.

Information Gaps and Fragmented Evidence

Evidence in multi-party cases is often spread across different platforms, offices, and data systems. Communications may be buried in emails, transaction records, or internal documents held by separate companies. Establishing a timeline, proving intent, and connecting the dots between parties demands an intense level of investigation. In many cases, digital forensics and subpoenaed records become essential tools.

Even professionals who appear to have played minor roles—such as escrow agents or document preparers—can be drawn into the proceedings. While some may ultimately be cleared of wrongdoing, their involvement must still be examined under the same scrutiny.  Courts have held that not all participants in a transaction owe the same legal duties—especially escrow agents, whose role is often limited by contract. 

Navigating the intricacies of a case involving multiple defendants and interrelated claims requires legal strategy, procedural discipline, and a deep understanding of real estate law. Without that, the process can spiral into delays and dead ends before it ever reaches resolution.

Importance of Hiring an Experienced Real Estate Litigation Attorney

Multi-party real estate fraud cases are rarely straightforward. Whether you’re pursuing a claim or defending against one, the legal and factual issues involved can be incredibly complex. These disputes often involve multiple parties, overlapping transactions, and conflicting narratives—all of which need to be carefully unraveled.

An experienced real estate litigation attorney plays a critical role in managing these challenges. Effective legal counsel can:

  • Coordinate with investigators and financial professionals to uncover key details
  • Construct detailed timelines to establish who knew what and when
  • Address the nuances of joint liability and manage parallel legal strategies
  • Identify opportunities for resolution or, when necessary, prepare for litigation

At Gottlieb Law, our experienced attorneys have handled real estate cases involving disputed ownership, fraud claims, and multi-party conflicts. We understand how Arizona courts evaluate evidence, assign liability, and apply state statutes in these matters.

If you believe you’ve been affected by real estate fraud or are facing allegations, it’s important to speak with an attorney who can assess the specifics of your situation. Every case is unique and must be reviewed on its own facts.

Staying Informed and Taking Action Against Real Estate Fraud

The most effective defense against real estate fraud is staying alert to how these schemes work and recognizing when something doesn’t feel right. Fraud in today’s market isn’t always obvious. It often hides behind formal paperwork, seemingly legitimate entities, and offers that appear helpful on the surface. The harm is rarely immediate, which is why so many people don’t realize what’s happened until long after the documents are signed.

Whether you’re a homeowner, investor, or part of the real estate industry, being proactive is critical to combating real estate fraud. Review every document before signing. Research any organization or individual offering financial assistance or foreclosure relief. Ask questions, keep records, and rely on professionals who are properly licensed and transparent about their role in the transaction.

If you believe fraud may have occurred, take it seriously. The consequences extend beyond the financial loss. Property ownership disputes, damaged credit, and long-term legal battles often follow. Addressing concerns early can help prevent these outcomes and may give you more options for resolution.

When real estate fraud involves multiple parties, the legal process becomes more demanding. These cases need careful legal review and a strategy that fits the unique facts involved. 

If you’re unsure whether your situation involves fraud or suspect something is off in a transaction, don’t wait. A legal review can clarify your rights and help determine the next steps.

Arizona Real Estate Fraud Cases: Why Legal Guidance Is Essential

As fraud schemes continue to surface across Arizona, it’s more important than ever to understand how these cases unfold and what protections are available under state law. These schemes often involve a range of players working together in ways that make detection and prosecution difficult. Staying informed, documenting every step in your transactions, and knowing when to seek help can make all the difference when something feels off. The complexity of these cases calls for decisive action.

Gottlieb Law represents clients on both sides of high-stakes real estate litigation, including cases involving fraud, disputed ownership, and multi-party liability. Our attorneys understand how Arizona courts assess these claims and what it takes to move a case forward with precision and clarity. If you suspect fraud, or if you’ve been named in a real estate dispute, we can help you evaluate your options and build a plan that fits your situation.

Call Gottlieb Law today at 602-899-8188 or use our Contact Us page here to schedule your initial consultation.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

Arizona Foreclosure Fraud and Equity Stripping Case - Gottlieb Law - Real Estate Attorneys
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Arizona’s Landmark Foreclosure Fraud Lawsuit: What Homeowners, Businesses & Real Estate Professionals Need to Know
Arizona’s Landmark Foreclosure Fraud Lawsuit: What Homeowners, Businesses & Real Estate Professionals Need to Know 938 942 Gottlieb Law

This article is intended to educate—not alarm. If you’re unsure whether a past transaction is valid, now is the time to review it with legal counsel.  Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.


Arizona’s Attorney General just filed a landmark civil suit in State of Arizona v. Cameron Jones et al. The case targets a sophisticated network accused of stealing millions of dollars in home equity from Arizona homeowners facing foreclosure. The alleged fraud began as unsolicited offers of foreclosure relief and grew into an organized scheme of deceptive contracts and rapid property flips. Arizona homeowners and families lost their hard-earned equity in their most valuable asset while shell companies profited off those quick flips of the property.

This lawsuit matters to every corner of Arizona’s real estate market. Homeowners need to recognize warning signs of real estate fraud and protect their rights. Title companies, lenders, and brokers could face serious liability if they overlook suspicious transactions. Investors must sharpen due diligence to avoid unknowingly participating in fraudulent deals. To help make sense of the news and potential ramifications for everyone impacted, let’s dive into why every homeowner and real estate professional in Arizona needs to pay attention to how this case unfolds.

Arizona Foreclosure Rescue Scam Lawsuit: State of Arizona v. Cameron Jones

In March of 2025, Arizona Attorney General Kris Mayes filed a civil complaint in Maricopa County Superior Court (Case No. CV2025‑008402) against more than 40 affiliated individuals and entities for orchestrating an “equity‑stripping” scheme targeting homeowners in pre‑foreclosure. According to the State’s complaint, the defendants identified distressed homeowners by monitoring public Notice of Trustee’s Sale filings and immediately dispatched agents to offer “foreclosure relief” that was actually a high‑pressure pitch to transfer property title for grossly inadequate consideration.

Under the Arizona Consumer Fraud Act (A.R.S. § 44‑1522(A)), it is unlawful to employ “deception, false promise, misrepresentation or concealment” in connection with the sale of real property. The complaint cites numerous cases where defendants falsely labeled contracts as leaseback or charitable “rescue agreements,” pressuring homeowners to surrender their equity for only 20% to 30% of the home’s fair market value.

Beyond consumer fraud, Arizona’s Racketeering Act (A.R.S. §§ 13‑2301–2315) provides civil remedies for a “pattern of racketeering activity,” defined as two or more predicate offenses (including theft by deception) within a five‑year span. The AG’s suit seeks to treat the network of shell limited liability companies, such as A‑Z Homes LLC, Invest in AZ LLC, and dozens of address‑named entities, as a single enterprise designed to conceal illicit gains through rapid property flips and false filings (including fraudulent bankruptcy petitions) to stall foreclosure auctions.

The State seeks injunctive relief dissolving each fraudulent entity, full restitution to defrauded homeowners, disgorgement of ill‑gotten profits (tripled under A.R.S. § 13‑2314.04), and civil penalties totaling $10,000 per violation. By combining Arizona’s consumer fraud and racketeering statutes, the AG’s complaint establishes a powerful legal framework for dismantling the scheme and recovering any stolen equity for Arizona families.

 

Arizona Equity‑Stripping Scam Warning Signs for Homeowners

The allegations in this case reveal a sophisticated scheme that robs homeowners of their hard-earned equity just as foreclosure looms. Recognizing the warning signs is crucial to ensuring you don’t fall prey to such deceptive tactics when dealing with foreclosure or selling your property.

1. Unsolicited “Foreclosure Relief” Visits or Calls

Legitimate foreclosure assistance comes from your lender, a HUD-approved counselor, or a licensed attorney. Scammers can show up unannounced at your door or call claiming to offer immediate help with your mortgage, invoking urgency by saying the foreclosure sale is “imminent” to pressure you into making quick decisions.

2. Contracts Disguised as “Leaseback” or “Rescue Agreements”

Read every document closely. Equity‑stripping schemes typically use contracts that appear to be short‑term rental or loan agreements but secretly transfer title or grant excessive control over your property. If a contract requires you to sign away ownership rights in exchange for vague promises of “future purchase” or “charitable assistance,” treat it as a major red flag.

3. High‑Pressure Signing Without Legal Review

Arizona law (A.R.S. § 44‑1522) prohibits deceptive practices in real estate transactions. Fraudsters exploit homeowners’ fear by demanding signatures on the spot, often late at night or immediately after a foreclosure notice appears online. Never sign any real estate document without taking the time to review it with a trusted attorney.

4. Sale Prices Far Below Market Value

If someone offers to buy your home for substantially less than comparable market values, especially when your mortgage balance is lower, pause immediately. Legitimate investors still need to clear your loan balance and closing costs. An offer that leaves you with little to no proceeds likely conceals hidden fees or fraudulent terms.

5. Promises to Cancel or Delay Foreclosure for a Fee

Beware of anyone who claims they can stop a foreclosure sale for an upfront payment. While filing false bankruptcy petitions or probate cases to stall trustee sales is not specifically mentioned in the Arizona Revised Statutes, they provide a framework for defining and penalizing racketeering activities, including a range of fraudulent or deceptive practices. For example, the statute defines “racketeering activity” as including certain predicate offenses such as theft, fraud, forgery, and other acts of deception committed as part of an enterprise over a period of time.

These types of real estate scams can fall under predicate offenses like fraud or theft by deception if it is shown to be part of a broader, organized effort to defraud creditors or homeowners. In other words, if these filings are used intentionally to delay foreclosure sales and facilitate the transfer of property under false pretenses, they could be prosecuted under the racketeering provisions as part of a pattern of illegal behavior. Keep in mind that courts have interpreted these provisions broadly to cover various forms of fraudulent schemes.  

If you need a deeper legal analysis or guidance on how this applies to a specific situation, consult with an attorney experienced in Arizona real estate laws and fraud.

Your Rights Under Arizona Law

If you recently signed a suspicious agreement, you should immediately seek counsel to determine if you can cancel a foreclosure rescue agreement.  

Immediate Steps if You’ve Been Targeted

  1. Preserve All Paperwork and Communications. Keep copies of contracts, business cards, and any recorded conversations.

  2. Contact an experienced Arizona real estate attorney. Have an experienced real estate attorney review your documents and advise you on rescission, restitution, or litigation options.

  3. File a Complaint with the Arizona Attorney General’s Consumer Fraud Division. Call 602-542‑5763 or submit online at azag.gov/report.

Time is of the essence if you believe you have been a victim of real estate fraud. If you suspect you’ve been targeted by a foreclosure rescue scam or equity‑stripping operation, review your case with an Arizona real estate attorney as soon as possible.

Arizona Foreclosure Fraud Lessons for Title Companies, Lenders & Real‑Estate Professionals

This suit shines a spotlight on critical compliance failures across the real‑estate industry. Title companies, mortgage lenders, brokers, and investors will likely need to sharpen due‑diligence practices now to potentially avoid the same racketeering liability and treble‑damages exposure faced by defendants in this high‑profile equity‑stripping case. Here are some important things for individuals and companies in the real estate industry to consider:

These simple, common-sense suggestions are not an exhaustive list of best practices, nor do they replace the need to review any specific case, transaction, or business practices with legal representation.

1. Flag Distressed‑Property Transactions Immediately

Monitor county recorder filings for Notices of Trustee’s Sale. Any off-market sale of a home in active foreclosure, especially to an LLC buyer at a price dramatically below Zillow estimates, should trigger a “red flag” review under Arizona’s Consumer Fraud Act. Maintain a log of flagged transactions and require enhanced scrutiny before moving forward on any flagged transactions.

2. Mandate Independent Seller Counsel

Arizona’s racketeering complaint alleges defendants used deceptive contracts to strip title. Protect all parties by insisting that sellers facing foreclosure secure independent legal representation before signing any sale or leaseback agreement. Document proof of counsel in transaction files to demonstrate good‑faith compliance.

3. Establish Formal Verification Protocols

Implement a written checklist that confirms:

  • Buyer and seller identities via government‑issued ID verification
  • Chain‑of‑title integrity (review all prior transfers for suspicious rapid flips)
  • Fair market valuation analysis against county assessor data
  • Verification that no foreclosure‑rescue or leaseback contract is disguised as a sale

Consider using advanced software solutions to automate alerts for transactions that meet distress criteria (e.g., purchase price < 70% of market value) to protect your business and provide the most value to clients/customers.

4. Train Staff on Foreclosure Rescue Scam Indicators

Provide quarterly training on common equity‑stripping tactics, including unsolicited “help” visits, misleading contract language, and rushed closings. Require staff to escalate any suspicious deal to your compliance or legal department for immediate review.

5. Document Every Step — And Every Decision

Arizona’s Racketeering Act allows civil suits against professionals who “knowingly facilitate” fraud. Maintain a detailed audit trail for every distressed‑property transaction, including emails, due‑diligence checklists, valuation reports, and signed attestations from seller counsel to document your internal procedures and protocols in case any legal issues arise.

Consequences and Next Steps for Industry Professionals

Title agencies, lenders, and real estate professionals must understand that non‑compliance carries severe risks. Firms implicated in the equity‑stripping lawsuit may face civil penalties of $10,000 per violation under Arizona’s Consumer Fraud Act and treble damages on all illicit profits. Such financial penalties can accumulate quickly, while reputational damage can endanger licenses and erode client trust.

The evolving legal landscape demands proactive measures. If your business deals with foreclosure properties, you need to act swiftly and decisively. Consider these additional steps to ensure compliance and protect your business:

  • Conduct Comprehensive Compliance Audits: Engage experts to meticulously review your due diligence protocols for all foreclosure transactions. Ensure that your processes align with Arizona’s anti‑fraud statutes and that every step, from verifying seller identity to confirming market value, is thoroughly documented.

  • Implement Rigorous Risk‑Management Counseling: Develop training programs that empower staff to spot red flags, such as transactions with unusually low purchase prices or rushed closings lacking independent legal review. Elevate internal standards by requiring formal verification and documentation for every deal.

  • Establish Enhanced Verification Procedures: Adopt written protocols that demand independent seller representation before any transaction. Utilize automated systems to monitor distressed‑property filings and flag suspicious activity, ensuring that every case is reviewed by a compliance officer before proceeding.

Arizona Equity‑Stripping Case Lessons for Attorneys & Regulators

Every attorney, regulator, or policymaker reviewing the Arizona equity‑stripping lawsuit should see it as more than a single enforcement action, it is a blueprint for preventing and prosecuting sophisticated real‑estate fraud. The State’s use of both consumer‑fraud and racketeering statutes creates a roadmap of actionable lessons that can safeguard homeowners and strengthen legal compliance across the industry.

Lesson 1: Early Detection Saves Equity

The alleged acts behind State of Arizona v. Cameron Jones et al. started with the involved individuals/companies monitoring publicly filed notices of foreclosure sales and sent workers to these homes within hours of posting, obviously hoping to catch homeowners before they had time to investigate their options. This hyper‑speed approach shows that conventional reactive processes are not working well enough. To help with early detection, legal teams and government agencies should consider:

  • Implementing automated alerts tied to county recorder data to flag filings immediately

  • Creating centralized dashboards that aggregate foreclosure notices by address or owner

These proactive measures can intercept fraudulent outreach before a deed is signed away and preserve homeowner equity.

Lesson 2: Professional Facilitation Carries Severe Liability

Arizona’s Racketeering Act holds title agents, attorneys, and escrow companies accountable when they knowingly facilitate fraudulent transactions. The complaint specifically names law firms and title companies for notarizing and closing deals that blatantly violated statutory protections for distressed sellers. To limit exposure, legal and title professionals should consider the following actions:

  • Institute a mandatory conflict‑check process for all transactions involving LLC buyers purchasing foreclosed property

  • Require documented proof of independent seller counsel before any deed transfer

  • Maintain a transaction file that includes a market‑value appraisal, identity verification, and a compliance attestation signed by a senior partner

Lesson 3: Enforcement Will Intensify—Nationwide Ripples Ahead

Arizona’s civil racketeering suit sets a precedent likely to inspire similar actions in other states. The AG’s strategy demonstrates that consumer‑fraud enforcement can target entire enterprises rather than isolated actors, increasing both financial risk and reputational damage for anyone involved in foreclosure‑related transactions. Attorneys and policymakers could consider the following improvements to existing legislation:

  • Monitor emerging case law around equity‑stripping and foreclosure rescue scams, including developments in State of Arizona v. Cameron Jones et al.

  • Update firm compliance manuals to include specific protocols for identifying and reporting foreclosure‑rescue red flags

  • Advocate for statewide registries of foreclosure consultants and mandatory disclosures for distressed‑property transactions

As regulatory scrutiny escalates, staying ahead of enforcement trends isn’t optional, it’s essential to protect clients, preserve market integrity, and avoid costly litigation. Every lesson from Arizona’s landmark equity‑stripping case underscores the need for rigorous controls, rapid response capabilities, and unwavering commitment to ethical practice. Legal professionals who embed these insights into their standard operating procedures will not only shield their firms from liability but also play a pivotal role in preventing predatory schemes that devastate homeowners across the nation.

Why This Arizona Equity‑Stripping Lawsuit Matters to Your Business

Arizona’s unprecedented civil suit against Cameron Jones et al. is a seismic event for any organization involved in real‑estate transactions, lending, or investment. The lawsuit exposes how quickly a well‑organized fraud can infiltrate the market, undermine consumer trust, and inflict crippling financial and reputational damage on businesses that fail to detect or report suspicious activity, even if they did not knowingly participate in the fraud.

Lenders and Title Companies at Risk

Even businesses with established compliance programs can fall victim when fraudsters exploit loopholes in distressed‑property workflows. This case highlights critical vulnerabilities in many service providers, professionals and companies in the real estate industry. Beyond the extensive legal and financial penalties, forced dissolution of shell entities and receivership proceedings can freeze assets, derail transactions, and clog internal resources. Being named in a high‑profile foreclosure fraud suit will likely undermine client confidence and can trigger licensing investigations.

Arizona Foreclosure Fraud & Equity‑Stripping Legal Issues

This case underscores the urgent need for homeowners, title professionals, lenders, and investors to understand their rights and risks. From deceptive door‑to‑door offers to racketeering claims that can seek treble damages, this case illustrates how quickly predatory practices can strip away equity, damage reputations, and expose businesses to crippling liability. Whether you’ve already been targeted by a foreclosure fraud scam or you simply want to ensure your real‑estate transactions are bulletproof, Gottlieb Law stands ready with the experience and proven strategies you need.

If you need representation relating to an equity stipping situation, feel free to reach out to our qualified team at Gottlieb Law.  Don’t wait until a fraudulent deed or enforcement action jeopardizes your equity, license, or bottom line. Schedule your consultation with Gottlieb Law today to assess your exposure, protect your assets, and build a compliance plan tailored to Arizona’s evolving enforcement landscape.

Call Gottlieb Law at 602-899-8188 or use our contact us page to schedule an initial consultation with our firm.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

 

Resolving Boundary Disputes in Arizona - Gottlieb Law
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Resolving Boundary Disputes Between Properties in Arizona
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Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

Arizona’s real estate market is as competitive as it is complex. Ongoing urban development, property redesigns, and evolving legal precedents have contributed to a rise in boundary disputes between commercial properties. Issues such as unclear property lines, unmapped borders, misplaced fences, under-marked boundaries, and conflicting surveyor reports can lead to significant operational disruptions—and, in many cases, costly legal disputes.

In the eyes of the law, prevention is the most effective strategy. Proactively implementing legal safeguards and addressing potential conflicts early can help prevent minor disagreements from escalating into full-blown litigation.

Here’s what Arizona property owners should understand about boundary disputes, their legal consequences, and the most effective ways to resolve them.

Disagreements About Boundaries

Ambiguous or Unclear Dividing Lines for Land

The division between two neighboring properties or businesses is not always clear-cut. Boundary disputes arise from:

  • Conflicting surveys/maps – Historical surveys/maps can often differ or be outdated, which can create confusion.
  • Misleading deed boundaries – Ambiguous or incorrect statements in property deeds or recorded documents can cause problems regarding who owns what.
  • Mistaken boundaries – parties may have been operating under a different belief as to the true boundaries of the properties at issue.

Property owners may find themselves in lengthy legal fights over land they thought they owned when these discrepancies occur.

Unpermitted Use and Gain of Ownership by Possession

An encroachment occurs when a neighboring landowner uses or builds on another party’s land, such as erecting fences, extending driveways, planting landscaping, or constructing structures beyond the recorded property line. If left unaddressed, encroachments can lead to legal disputes or ownership claims over time.

Arizona law also recognizes adverse possession, which allows a person to claim ownership of land if they have openly, continuously, and exclusively used it without the owner’s permission for over 10 years. 

Additionally, under Arizona law, as recognized in Beck v. Neville, property ownership may be established through boundary by acquiescence. This doctrine does not require hostility but instead applies when both property owners have silently accepted a specific boundary as the property line over an extended period—even if it differs from the legally recorded boundary.

Title and Deed Problems

Mistakes on property lines within official records may result in conflicting claims to the same boundary line. Some common issues include:

  • Overlapping legal descriptions in adjacent deeds
  • Title defects that obscure legitimate ownership
  • Discrepancies between recorded boundaries and actual land use

Landowners are often unaware of these issues until after a neighboring property owner makes a claim.  At that point, the dispute may require an extensive title search or professional survey to accurately determine the true boundary lines.

Regulatory and Zoning Considerations

Legal descriptions and surveys are not the only sources that can trigger boundary disputes—local zoning laws, easements, and redevelopment plans may also play a role. Arizona municipalities enforce zoning regulations that include specific requirements such as:

  • Minimum setback requirements, which dictate how far structures must be from property lines
  • Easements, which may limit how land can be used or developed
  • Redevelopment plans, which may impact historically understood property boundaries

Longstanding boundary conflicts may surface due to zoning changes, easement enforcement, or redevelopment efforts—potentially affecting property value and commercial operations.

Financial and Operational Impacts

The financial implications of boundary disputes can be significant—and the longer they remain unresolved, the more costly they tend to become. Common examples include:

  • Property devaluation – Losing a portion of land can reduce a property’s overall market value and limit future development.
  • Business disruption – If commercial property, access is restricted or existing structures require modification, business operations may be delayed or impaired.

Addressing boundary disputes early can help avoid escalating costs and minimize the impact on property value and operations.

Arizona Laws on Boundary Disputes

Boundary by Acquiescence and Adverse Possession

Arizona recognizes the legal doctrine of boundary by acquiescence, which allows a long-accepted boundary between two neighboring properties to become the legal property line—even if a later survey shows otherwise. This typically applies when both property owners have treated a specific boundary as the true line for an extended period, generally ten years or more, without objection.

Similarly, adverse possession allows an individual to acquire ownership of land if they have openly, continuously, and exclusively occupied it without the legal owner’s permission for a period of at least ten years under Arizona law. 

The Importance of Surveys and Title Records

Arizona law relies on recorded legal descriptions and surveys to define property boundaries. In boundary disputes, professional land surveys are often the most reliable and persuasive evidence, as they provide legally recognized and objective measurements of property lines.

Implications of Zoning and Land Use

Even if a boundary is altered through legal action—such as a quiet title judgment or a boundary by acquiescence ruling—zoning restrictions and land use regulations still apply. This means that certain structures or uses may remain prohibited on the newly defined property. It is essential to review local zoning codes before initiating or finalizing any legal action involving boundary lines.

Legal Issues and Title Insurance

Title insurance can protect property owners from financial risks tied to boundary disputes. Many policies cover legal expenses and potential losses if a boundary-related claim arises. This makes title insurance a valuable safeguard in both residential and commercial real estate transactions, especially where boundary clarity is critical.  

It’s important to consult with the title company to understand exactly what the policy covers, as not all boundary issues may be included under standard terms.


Shifts With Consequences for Boundary Disputes

Technology’s Role in Resolving Disputes

The rise of GPS-based boundary surveys and drone imaging has significantly improved boundary accuracy. These tools provide clear, objective evidence, helping to resolve disputes more efficiently and with greater precision.

Increased Use of Alternative Dispute Resolution (ADR)

Many property owners are turning to mediation or arbitration to settle boundary disputes. ADR allows for resolution through neutral third parties, often resulting in faster, more cost-effective, and legally binding outcomes—without going through the traditional court process.

Geographic and Development Trends in Arizona

Arizona’s rapid urban expansion and rise in mixed-use developments have added complexity to boundary issues. With more properties sharing walls, parking lots, and access roads, the potential for disputes has increased. In this environment, clear boundary definitions and proactive legal planning are more essential than ever.

 

Resolving Methods for Boundary Disputes

Proactive Steps to Prevent Disputes

Property owners can reduce the risk of boundary conflicts by taking the following steps:

  • Conducting a professional land survey before purchasing or developing property
  • Reviewing title records and local zoning regulations prior to finalizing any agreements
  • Establishing written boundary agreements with neighboring property owners when appropriate

Effective Dispute Resolution Options

  • Negotiation – Often the most efficient and cost-effective approach. In many cases, a direct and respectful conversation between neighbors can resolve the issue without legal escalation.
  • Mediation or Arbitration – A neutral third party can help facilitate a resolution. Mediation encourages compromise, while arbitration can result in a legally binding decision outside of court.
  • Litigation – In complex or high-value disputes, court intervention may be necessary. Success often depends on the strength and clarity of the evidence, including surveys, deeds, and historical property use.

Financial and Legal Precautions

Protecting your property from boundary disputes requires strategic financial planning and proactive legal safeguards. One of the most effective protections is investing in title insurance, which may be able to shield you from claims challenging your property’s boundaries. This coverage acts as a crucial safety net, helping to prevent unexpected legal expenses from draining your resources.

In addition, setting aside dedicated funds for legal fees, filing costs, and professional surveys is a smart way to ensure you can respond quickly and confidently if a dispute arises. A well-prepared budget enables you to engage expert assistance without delay, rather than postponing resolution due to financial constraints.

Most importantly, working with an experienced real estate attorney is essential for assessing potential risks and crafting a strategy for dispute prevention and resolution. A knowledgeable lawyer can (a) conduct detailed property evaluations, (b) review deed and title records, and (c) guide negotiations to prevent minor issues from escalating

Whether your matter involves mediation, arbitration, or litigation, having the right legal counsel ensures your commercial property interests are protected—and that boundary disputes are handled efficiently and effectively.

Preserve Your Interest in Property

Real estate boundary disputes in Arizona can be complex and time-consuming. Understanding legal parameters, taking proactive steps, and using mediation or legal agreements can help avoid major financial losses.

For property owners facing boundary issues, seeking expert legal assistance is crucial. Skilled real estate lawyers can guide negotiations, mediation, or litigation, ensuring that property rights remain protected.

Call Gottlieb Law at 602-899-8188 or use our Contact Us page to schedule an initial consultation with our firm.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

 

What Arizona Landlords and Tenants need to Know About Triple-Net NNN Leases - Gottlieb Law
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What Arizona Commercial Landlords and Tenants Need to Know About Triple-Net (NNN) Leases
What Arizona Commercial Landlords and Tenants Need to Know About Triple-Net (NNN) Leases 1841 1229 Gottlieb Law

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

 

Signing a commercial lease in Arizona comes with important decisions, and one of the biggest is whether to agree to a Triple-Net (NNN) lease. While NNN leases can offer lower base rent, they also require tenants to cover expenses that might otherwise fall on the landlord. If you’re considering leasing a retail, office, or industrial space, here’s what you need to know before committing.

What Is a Triple-Net (NNN) Lease?

A Triple-Net (NNN) lease is a commercial rental agreement where tenants pay more than just their base rent—they also cover certain property-related expenses. This arrangement transfers financial obligations from the landlord to the tenant, making it an attractive option for property owners who want to reduce their costs and limit financial risk. While this lease type is most common in retail spaces, it’s also used for office buildings, industrial properties, and even standalone corporate locations, although office leases are more commonly structured as gross or modified gross leases.

In an NNN lease, tenants pay for:

  • Property Taxes – Each tenant covers their proportionate share of property taxes, typically based on the amount of space they occupy within a multi-tenant building or assumes full responsibility in a single-tenant property. Tax rates can fluctuate, and any increases are typically passed onto the tenant, so it’s important to consider potential increases over time.
  • Insurance – The tenant contributes to the cost of insuring the property, ensuring coverage for risks like fire, natural disasters, and liability claims. The exact expenses tenants are responsible for will depend on the terms outlined in the lease agreement and the type of property being rented.  Tenants may also carry their own liability and business insurance separate from the landlord’s property insurance policy.
  • Maintenance & Repairs – Unlike other lease structures where landlords handle property upkeep, NNN tenants often take responsibility for repairs, general maintenance, and, in some cases, structural elements like roofing and HVAC systems. That said, structural components are typically still the landlord’s responsibility unless specifically negotiated otherwise.  The overall expense can be substantial, especially if the building requires frequent repairs or major upkeep.

Because tenants take on these additional costs, landlords typically set a lower base rent than they would with other lease structures. While this can be appealing to tenants looking for reduced upfront costs, the long-term financial obligations of taxes, insurance, and maintenance should be carefully considered before signing an NNN lease. Understanding the scope of these responsibilities and factoring them into the overall business budget is essential for tenants looking to avoid unexpected financial strain.

 

What Sets an NNN Lease Apart from Other Lease Agreements?

The way costs are divided between landlords and tenants can differ significantly across various commercial lease agreements. The main difference with an NNN lease is that tenants take on additional financial responsibilities beyond rent, and while other lease structures may include some shared expenses, an NNN lease places a greater financial burden on the tenant. Understanding these distinctions is crucial for businesses deciding which lease type best aligns with their budget and long-term goals.

Here’s how an NNN lease compares to other common lease agreements:

  • Gross Lease – A simple lease structure in which the tenant pays a set monthly rent while the landlord handles all major property expenses, such as taxes, insurance, and maintenance. It provides predictability for tenants, as they won’t face fluctuating operating costs or increases. However, because the landlord assumes more financial responsibility, the base rent is typically higher than in an NNN lease.
  • Modified Gross Lease – A hybrid lease structure that combines elements of both a gross lease and a Triple-Net (NNN) lease. The tenant and landlord negotiate how expenses are divided, often with the tenant paying for utilities, janitorial services, and minor maintenance while the landlord continues to cover larger expenses like property taxes, insurance, and major repairs. This structure offers flexibility, as tenants can take on some costs while avoiding full responsibility for the entire property.
  • NNN Lease – This lease structure requires the tenant to take on property taxes, insurance, and maintenance costs, rather than the landlord covering these expenses. Because the tenant bears these additional expenses, the base rent is often lower than in Gross or Modified Gross Leases.  That said, tenants must budget for potentially fluctuating expenses, which can add up over time. This lease type is common in standalone retail locations, shopping centers, and multi-tenant office spaces.

Choosing between these lease types depends on the tenant’s financial strategy, risk tolerance, and desire for control over the property. While a gross lease provides cost certainty, an NNN lease offers potentially lower upfront rent but requires careful financial planning due to variable expenses.

 

Why Do Landlords Offer NNN Leases?

NNN leases are a strategic choice for landlords because they reduce financial risks and operational responsibilities. By transferring property-related expenses to tenants, landlords can maintain steady income without the unpredictability of fluctuating costs.

Here’s why many landlords prefer NNN leases:

  • Predictable Revenue – Since tenants cover property taxes, insurance, and maintenance, landlords receive a consistent income stream without unexpected deductions for property expenses.
  • Lower Management Burden – With tenants handling maintenance and repairs, landlords don’t have to oversee day-to-day property upkeep, making it a more hands-off investment strategy.
  • Attractiveness to Investors – Commercial properties with NNN leases are appealing to investors because they provide stable, long-term income with minimal landlord involvement. This structure is especially appealing to real estate investment trusts (REITs) and private investors looking for a steady income with minimal management responsibilities.
  • Risk Reduction – Property tax increases, insurance premium hikes, and routine maintenance costs are the tenant’s responsibility, shielding landlords from rising expenses that could otherwise eat into their profits. However, in some leases, landlords may still be responsible for major structural repairs (e.g., roof or foundation) unless otherwise negotiated.

Because of these benefits, NNN leases are widely used in retail properties, fast-food chains, corporate office spaces, and industrial buildings. While tenants must carefully assess the financial implications, landlords view this structure as an effective way to maximize investment returns with fewer responsibilities.

The Benefits of an NNN Lease for Tenants

While NNN leases are often seen as landlord-friendly, they also offer key advantages for tenants—especially businesses looking for a long-term location with lower base rent. Here’s why an NNN lease might be worth considering:

  • Reduced Base Rent – Because tenants cover costs such as property taxes, insurance, and maintenance, landlords typically offer lower base rent than in a gross lease. This structure can make it easier for businesses to secure prime commercial space in high-demand areas, though tenants should carefully evaluate the total cost of occupancy rather than just the base rent.
  • Steady Location – NNN leases are often structured as long-term agreements (typically 5 to 20 years), allowing businesses to establish themselves in a consistent location without frequent lease renegotiations. This stability is particularly beneficial for franchises, retail businesses, and corporate offices that depend on long-term location security. However, tenants should review escalation clauses and renewal terms to fully understand their financial commitments.
  • Greater Control Over the Property – With maintenance responsibilities shifting to the tenant, businesses have more say in how the property is managed. Instead of relying on a landlord’s maintenance schedule, tenants can address repairs promptly and ensure the space aligns with their operational needs and brand standards. This is especially valuable for businesses that rely on customized environments, such as restaurants, medical offices, and retail stores.
  • Predictable Operating Environment – Unlike some lease structures where landlords can increase rent unpredictably to offset rising costs, NNN leases provide tenants with direct oversight of operating expenses. However, because costs like property taxes, insurance, and maintenance can fluctuate, tenants must carefully analyze historical cost trends and budget for potential increases over time.

For the right tenant, an NNN lease offers a mix of affordability, stability, and control—key factors in building a long-term business strategy.

The Risks and Responsibilities of an NNN Lease

Despite its advantages, an NNN lease comes with added financial obligations that tenants must evaluate carefully. These responsibilities can lead to unexpected expenses, making it crucial to assess potential risks before signing.

  • Unexpected Costs – Property taxes and insurance premiums are subject to change, and tenants must be prepared for possible increases. A sudden tax reassessment or a rise in insurance rates could significantly impact a business’s budget. Unlike fixed-rent agreements, NNN leaseholders bear the burden of these fluctuations.
  • Maintenance Responsibilities – In an NNN lease, maintenance obligations extend beyond routine repairs—tenants are often responsible for HVAC servicing, plumbing, and parking lot upkeep. However, responsibility for major structural elements like the roof and foundation varies by lease agreement. If a property requires frequent repairs or significant upkeep, these costs can accumulate rapidly. Without proper budgeting, a tenant could face substantial, unplanned expenses.
  • Long-Term Commitment – Many NNN leases span 10+ years, limiting a business’s ability to relocate, downsize, or expand. Breaking an NNN lease can be costly, often requiring a lease buyout or subleasing (if permitted by the landlord). Businesses should carefully align lease terms with their long-term growth strategy before committing.
  • Complex Lease Agreements – NNN leases tend to be more complex than standard lease structures, often containing detailed clauses outlining tenant responsibilities and expense breakdowns. Without careful review and negotiation, tenants could agree to unfavorable terms that significantly increase their financial burden. Key areas to assess include expense caps, maintenance obligations, and escalation clauses. Seeking legal and financial guidance before signing can help avoid costly surprises.

For businesses considering an NNN lease, understanding both the financial and operational commitments is essential. What may seem like a cost-effective option upfront can become a major burden if expenses aren’t managed properly.

 

What Arizona Tenants Should Consider Before Signing an NNN Lease

Arizona’s commercial real estate market, particularly in Phoenix, Scottsdale, and Tucson, offers many NNN lease opportunities. Before committing to a lease, tenants should carefully review all terms and financial obligations to prevent unexpected expenses.

  • Breakdown of Costs – It’s not enough to focus on the base rent—tenants need a complete financial picture. Request an estimate of property taxes, insurance premiums, and expected maintenance costs. If possible, review historical tax and insurance data for the property to anticipate future increases.
  • Maintenance Responsibilities – Clearly define which maintenance tasks fall under the tenant’s obligations. Is the tenant liable for significant structural repairs, or do those fall under the landlord’s responsibilities? Are maintenance costs shared among multiple tenants, or is each business solely responsible for its space? Clarifying these points in advance can help avoid surprise expenses down the road.
  • Future Tax & Insurance Increases – Commercial properties in Arizona are subject to tax reassessments, usually triggered by a property sale or major improvement.  Additionally, insurance rates can fluctuate due to market conditions. Tenants should factor in potential increases over the course of the lease and negotiate terms that prevent excessive cost spikes. Some leases may allow for cost caps or limit increases to a certain percentage per year—these protections can be crucial.
  • Lease Negotiations – A commercial lease attorney can help tenants identify unfavorable terms and negotiate better conditions. Whether it’s securing a cap on tax increases, reducing liability for structural repairs, or clarifying unclear clauses, professional legal review ensures tenants don’t get locked into an agreement that could become financially unmanageable.

An NNN lease can be a great opportunity for businesses, but only when the terms align with their long-term financial strategy. Taking the time to analyze costs, assess risks, and negotiate favorable terms will set tenants up for success in Arizona’s competitive commercial real estate market.

 

Need Legal Guidance for Your NNN Lease? Gottlieb Law Can Help

Signing an NNN lease in Arizona is a major financial commitment. Before committing to a lease, it’s crucial to evaluate potential risks and work out terms that protect your financial and legal interests. Gottlieb Law has substantial experience in commercial lease agreements, helping tenants secure fair contracts that align with their business goals.

Contact Gottlieb Law today at 602-899-8188 to schedule your initial consultation or use our Contact Us page. Our experienced commercial real estate attorneys routinely assist commercial landlords and tenants with commercial lease agreements in Arizona.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.
Navigating Partition Actions: Resolving Disputes in Jointly Owned Arizona Properties
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Navigating Partition Actions: Resolving Disputes in Jointly Owned Arizona Properties
Navigating Partition Actions: Resolving Disputes in Jointly Owned Arizona Properties 1029 685 Gottlieb Law
Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

When Property Co-Ownership Becomes a Problem

Owning property with family members, friends, or business partners can be a smart investment—until disagreements arise. Whether it’s an inherited home, a jointly purchased rental, or land acquired for development, co-owners often reach a point where their interests no longer align. One owner may be ready to sell, while the other insists on keeping the property. Others may argue over maintenance costs, rental income, or use of the property.

When negotiations fail, Arizona law provides a legal solution: a partition action. This process gives a co-owner the right to request a court-ordered division or sale of the property under certain circumstances. But navigating a partition action isn’t always straightforward, and understanding your rights is critical.

What Is a Partition Action?

A partition action provides co-owners of real estate with a legal solution when they can’t agree on managing, using, or selling a shared property. When discussions stall and no voluntary agreement can be reached, a partition action allows one or more owners to petition the court to divide or sell the property. Arizona law recognizes that no co-owner should be indefinitely bound to a property arrangement that no longer serves their best interests or causes financial strain.

Partition actions are particularly useful in cases where emotions run high, such as disputes among siblings who inherit property, former romantic partners who co-own real estate, or business partners who no longer see eye to eye. Without this legal mechanism, co-owners would have little recourse aside from costly and drawn-out negotiations that may never lead to a resolution.

Types of Partition Actions in Arizona

There are two primary ways an Arizona court can partition a property:

Partition in Kind (Physical Division of Property)

This type of partition results in the property being physically divided among the co-owners, with each person receiving a portion that aligns with their ownership interest. Although this might appear to be the simplest solution, it only works in certain situations.

Partition in kind is typically only granted for large tracts of undeveloped land—such as farmland, desert acreage, or vacant lots—where the property can be equitably split without significantly reducing its value. For example, if two siblings inherit a 100-acre ranch in Arizona, a court may divide it into two equal 50-acre parcels, allowing each sibling to take ownership of a distinct section.

However, for homes, commercial buildings, or other developed properties, dividing the asset physically is often impractical. You can’t split a house in half or divide a single commercial building into separate, legally distinct parts in most cases. That’s why most partition actions in Arizona result in partition by sale.

Partition by Sale (Court-Ordered Sale of Property)

If a property can’t be divided without reducing its value or if it’s impracticable to do so, the court orders its sale, with the proceeds distributed among the owners based on their ownership shares, subject to contribution claims by the co-tenants (if applicable).

Partition by sale is the most common outcome in Arizona, especially for:

  • Residential homes where co-owners can’t agree on selling, renting, or who should live in the home.
  • Commercial properties shared by business partners with differing interests.
  • Rental properties where one owner wants to sell but the other prefers to continue renting.
  • Homes passed down to heirs who disagree on whether to sell, keep, or rent the property.

The court may mandate that a special commissioner – a licensed realtor – sell the home through a private sale, resembling a traditional real estate transaction.

Why a Partition Action May Be the Only Solution

Ideally, co-owners should try to resolve disputes through negotiation, mediation, or a buyout agreement before turning to the courts. In certain situations, a partition action becomes the only practical solution when:

  • One owner refuses to sell or won’t agree to a fair buyout.
  • Financial burdens (such as unpaid property taxes, mortgage payments, or maintenance costs) are unfairly placed on one owner.
  • Disagreements become unmanageable, and no progress is made toward a solution.
  • Co-owners become unresponsive, making it impossible to move forward with the property’s sale or use.

While partition actions provide a legal pathway to resolve these disputes, they can be legally complex and emotionally charged. Before heading to court, it’s crucial to understand the legal process, potential costs, and how to best protect your interests.

When Do You Need a Partition Action in Arizona?

Partition actions are needed when real estate co-owners reach a deadlock over the property’s future. Some common scenarios include:

  • Inherited Property Disputes – Siblings or other heirs inherit a home and disagree on whether to sell, rent, or keep it.
  • Business Partnerships Gone Wrong – Real estate investors or business partners can’t agree on selling or managing a property.
  • Divorced or Separated Couples – Unmarried couples who purchased property together but now want to part ways.
  • Disputes Over Property Expenses – One owner refuses to contribute to taxes, maintenance, or repairs, creating financial strain on the other(s).

If co-owners can’t reach a voluntary resolution—such as one party buying out the other’s interest—a partition action may be the only way to break the deadlock.

The Partition Process in Arizona

Initiating a partition action in Arizona requires navigating several legal steps. Though each case differs, the typical process includes:

  1. Filing the Lawsuit – A co-owner files a partition complaint in the appropriate Arizona court, outlining their ownership interest and the need for partition.
  2. Legal Notice to Co-Owners – All other owners are served with notice of the lawsuit and given an opportunity to respond.
  3. Court Evaluation of the Property – The court determines whether a physical division is possible or if a sale is necessary.  The court may also determine each co-owner’s ownership percentage and adjudicate any contribution claims, such as reimbursement for mortgage payments, property taxes, maintenance expenses, or investments made by a co-tenant to improve the property.
  4. Appointment of a Special Commissioner – In some cases, the court appoints a special commissioner – usually a realtor – to oversee the sale or division of the property.
  5. Property Sale (if Required) – When the court determines that selling the property is the best option, it will usually be placed on the market through a private sale. Once sold, the proceeds are divided among the owners according to their respective ownership percentages and rulings by the court.
  6. Distribution of Proceeds – After accounting for outstanding property-related debts as well as contribution claims by the co-tenants, the remaining funds are generally divided among the owners.

The timeline can range from several months to more than a year, depending on factors like case complexity, disagreements over ownership shares, financial contributions, or property valuation.

Challenges and Legal Considerations

Partition actions can be complex and contentious, especially when co-owners disagree on key issues. Some common challenges include:

  • Contribution Claims – If one owner claims they contributed more to the mortgage, taxes, or repairs, they may seek a larger share of the proceeds.
  • Opposition to the Sale – Some co-owners may attempt to object to the demand to sell the property, requiring court intervention.
  • Disagreement Over Property Value – Establishing the property’s fair market value can lead to disputes, particularly when co-owners have conflicting opinions on appraisals or market assessments.
  • Emotional and Family Conflicts – In cases involving inherited property, emotions often run high, making an already complex legal process even more difficult.

Having an experienced Arizona real estate attorney can help protect your interests, negotiate potential settlements, and ensure the process moves forward efficiently.

Avoiding a Partition Action: Are There Alternatives?

Going to court isn’t always the best or fastest solution. If co-owners are willing to negotiate, there are alternatives to a partition action:

  • Buying Out a Co-Owner – One or more owners purchase the other’s share, allowing them to retain full control of the property.
  • Mutual Sale Agreement – All co-owners agree to sell the property and split the proceeds without needing court intervention.
  • Mediation – A neutral mediator facilitates discussions to help co-owners negotiate a fair resolution without litigation.
  • Property Agreement Before Purchase – If you’re planning to co-own property, having a legally binding agreement in place can help avoid future disputes.

While these alternatives can reduce costs, time, and stress, they only work if all parties are willing to collaborate.

Protect Your Rights in a Partition Action

If you’re involved in a jointly owned property dispute in Arizona, you don’t have to navigate the legal process alone. Whether you’re seeking to initiate a partition action or defending your rights in one, Gottlieb Law can provide the guidance and legal expertise you need.

Our experienced Arizona real estate attorneys can evaluate your situation, explore potential solutions, and represent you in court if necessary. Don’t let a property dispute disrupt your finances or peace of mind—contact Gottlieb Law today at 602-899-8188 to schedule your initial consultation or use our Contact Us page.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.
Arizona's New Exclusive Property Engagement Agreement Laws - Gottlieb Law
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Arizona’s New Exclusive Property Engagement Agreement Laws: What Homeowners Need to Know
Arizona’s New Exclusive Property Engagement Agreement Laws: What Homeowners Need to Know 1536 1536 Gottlieb Law

The following links provide access to blogs and articles that contain general legal information.  The information provided in the blogs and articles is not specific legal advice, does not create an attorney-client relationship, and you should not take any actions in reliance on the information without first retaining an attorney and establishing an attorney-client relationship. Laws change over time and you should seek legal counsel if you have a specific legal situation that you need advice on.


Arizona’s real estate market is experiencing a legal shift with the implementation of Senate Bill 1218 (SB 1218). Designed to combat predatory Exclusive Property Engagement Agreements, this legislation introduces new protections for homeowners. Under the new rules, Exclusive Property Engagement Agreements must meet specific guidelines, ensuring fair and transparent terms while safeguarding homeowners’ rights.

Some real estate contracts have historically included unfair or deceptive clauses, particularly those attempting to tie a property to long-term agreements or impose burdensome restrictions on its sale. SB 1218 directly addresses these issues, preventing predatory practices and offering homeowners more control over their property transactions.

It’s crucial for Arizona homeowners to get up to speed on the new rules governing real estate to navigate their property transactions effectively. This article breaks down the details of SB 1218, its implications for homeowners, and what steps you should take before signing an Exclusive Property Engagement Agreement.

What Is an Exclusive Property Engagement Agreement?

An Exclusive Property Engagement Agreement is a “contract or agreement that provides an exclusive right to a person to list or sell residential real estate, including a contract or agreement to enter into any listing agreement or arrangement in the future or any memorandum recognizing the existence of an exclusive property engagement agreement.”  

While these contracts are common and beneficial in most cases, some versions have exploited loopholes to include unreasonable restrictions. Examples of predatory agreements include excessively long durations, binding future property owners to previous contracts, and even clouding property titles with recorded claims.

The enactment of SB 1218 introduces limits and new regulations to ensure Exclusive Property Engagement Agreements serve their intended purpose without infringing on homeowner rights.

Key Provisions of SB 1218

Arizona’s new law establishes clear boundaries for Exclusive Property Engagement Agreements. Here’s what SB 1218 covers and how it protects homeowners:

1. Duration Limits

Exclusive Property Engagement Agreements now have a maximum term of 12 months. This provision prevents the homeowner from being locked into long-term contracts that may hinder their ability to sell or manage their property effectively.

Predatory agreements often included clauses that extended the contract indefinitely, sometimes without the homeowner’s clear understanding. Under SB 1218, any Exclusive Property Engagement Agreement exceeding 12 months will be considered void and unenforceable.

2. No Covenants Running with the Land

Covenants running with the land—clauses that bind future owners to an agreement—are no longer allowed. Previously, real estate professionals could make agreements that ran with the land, impacting future owners as well as the current one. For example, a new buyer might unknowingly inherit a binding contract.

SB 1218 ensures that Exclusive Property Engagement Agreements apply only to the original homeowner who signed the contract. Future buyers are not obligated to honor previous Exclusive Property Engagement Agreements.

3. Recording Restrictions

Real estate professionals are now prohibited from recording Exclusive Property Engagement Agreements with the county recorder’s office. Recording these agreements created a situation where these contracts could cloud property titles, causing delays or complications in future sales.

This restriction protects homeowners from unexpected encumbrances that could devalue or complicate the sale of their property.

4. Prohibition of Liens or Encumbrances

Exclusive Property Engagement Agreements cannot authorize the placement of liens or other encumbrances on the property. SB 1218 prohibits the recording of Exclusive Property Engagement Agreements, ensuring they do not create encumbrances on a home’s title. This practice often surprised homeowners when attempting to sell or refinance their homes.

Under the new law, such liens are prohibited, ensuring the property remains unencumbered by unfair claims.

5. No Unauthorized Assignments

Exclusive agreements can’t be transferred or assigned to anyone else without the homeowner’s explicit approval. Unauthorized assignments were a common issue in predatory contracts, leaving homeowners in agreements they had no prior relationship with.

Homeowners now have full control over selecting who represents them when selling their property.

Why Were These Changes Necessary?

Predatory real estate contracts have become a growing concern in Arizona and other states. Unscrupulous real estate professionals often took advantage of legal loopholes to lock homeowners into restrictive and long-term agreements. These contracts frequently included:

  • Excessively Long Terms: Some agreements lasted decades.
  • Recorded Encumbrances: Recorded agreements that operated as liens, clouding property titles and making it difficult to sell or refinance homes.
  • Hidden or Misleading Clauses: Homeowners sometimes unknowingly signed contracts with unreasonable terms.

The result was frustration, financial loss, and unnecessary complications for Arizona homeowners. SB 1218 addresses these issues, providing stronger protections and ensuring real estate transactions remain transparent and fair.

Implications for Homeowners in Arizona

SB 1218 introduces a range of benefits and protections that will have a significant impact on how homeowners engage with real estate professionals. Here’s what you need to know:

1. Greater Control Over Contracts

Homeowners can now feel more confident when entering into Exclusive Property Engagement Agreements, knowing the law limits their duration and scope. Exclusive Property Engagement Agreements must adhere to the 12-month limit, providing homeowners with more flexibility.

2. Clean Property Titles

Preventing the recording of Exclusive Property Engagement Agreements ensures property titles remain free of unwanted encumbrances. Homeowners won’t encounter unexpected surprises when trying to sell or refinance their homes.

3. Protection Against Long-Term Liability

Future property owners are no longer affected by prior exclusive agreements. Homeowners selling their homes can offer clean transfers without concerns about lingering obligations.

4. Improved Transparency

The law promotes greater fairness and transparency in real estate transactions. Homeowners now have a clear understanding of what to expect in Exclusive Property Engagement Agreements, reducing the risk of hidden or deceptive terms.

Steps Homeowners Should Take Before Signing an Exclusive Property Management Agreement

While SB 1218 introduces significant protections, homeowners must still exercise caution when signing real estate contracts. Here are key steps to ensure you enter a fair and legal agreement:

1. Read the Contract Thoroughly

Carefully review every detail of the Exclusive Property Engagement Agreement, including the duration, obligations, and any fees involved. Make sure the contract complies with SB 1218’s provisions.

2. Ask Questions

Don’t hesitate to require an explanation of any part of the agreement. Ensure you understand all terms before signing.

3. Consult a Real Estate Attorney

Legal counsel can provide invaluable guidance when reviewing real estate contracts. An Arizona real estate attorney will help you identify potential issues and confirm the agreement aligns with the law.

4. Negotiate Terms

If you’re uncomfortable with specific terms, negotiate changes. Remember, you have the right to modify the agreement to suit your needs.

5. Avoid Signing Under Pressure

Take your time when reviewing contracts. You should not be pressured into signing an agreement on the spot.

How Real Estate Professionals Must Adapt

Violating SB 1218 can result in contracts being declared void, legal penalties, and damage to professional reputations.

Legal Recourse for Violations

Homeowners who encounter Exclusive Property Engagement Agreements violating SB 1218 have legal options. The law declares non-compliant agreements void and unenforceable, meaning homeowners are not bound by their terms.

If you believe your rights have been violated under SB 1218:

Final Thoughts

These new laws represent a significant step forward in protecting homeowners from predatory practices. SB 1218 establishes clear limits on contract duration, eliminates harmful clauses, and ensures property titles remain clean and unencumbered.

Homeowners now have greater control, transparency, and peace of mind when engaging with real estate professionals. It’s important to understand these new protections if you’re considering signing an Exclusive Property Engagement Agreement.

Protect Your Real Estate Rights with Gottlieb Law

Understanding real estate laws can be complex, especially when navigating new legislation like SB 1218. Gottlieb Law focuses on Arizona real estate law and is committed to protecting homeowners from unfair or predatory contracts.

Whether you’re reviewing an Exclusive Property Engagement Agreement, disputing a contract, or simply seeking advice, our experienced attorneys are here to help. Contact our team today at 602-899-8188 to schedule a consultation or use the Contact Us page of our site.

The following links provide access to blogs and articles that contain general legal information.  The information provided in the blogs and articles is not specific legal advice, does not create an attorney-client relationship, and you should not take any actions in reliance on the information without first retaining an attorney and establishing an attorney-client relationship. Laws change over time and you should seek legal counsel if you have a specific legal situation that you need advice on.

Arizona's Changing Laws on Accessory Dwelling Units (ADUs): What Property Owners Should Know
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Arizona’s Changing Laws on Accessory Dwelling Units (ADUs): What Property Owners Should Know
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Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

Arizona has addressed its housing shortage by legalizing and regulating Accessory Dwelling Units (ADUs), often called casitas or guest houses.  These self-contained living spaces—either attached to or separate from a primary residence—offer homeowners a practical solution for multi-generational living, rental income, or increased housing availability.

With the passage of House Bill 2720, the state has mandated that many municipalities allow ADUs in single-family residential zones. If you’re considering adding one to your property, understanding the new regulations and local policies is crucial.

Statewide ADU Legislation: What You Need to Know

On May 21, 2024, Governor Katie Hobbs signed House Bill 2720, providing statewide uniformity regarding ADUs across Arizona. House Bill 2720 mandates that municipalities with populations over 75,000 must allow at least one attached and one detached ADU per lot in single-family residential zones. Additionally, for lots or parcels that are one acre or larger, municipalities must permit at least one additional detached ADU if at least one of the ADUs is designated as a restricted-affordable dwelling unit.

Here’s what the law outlines:

  • Homeowners can build one attached, detached, or internal ADU per lot.
  • Size limits may vary by municipality. Homeowners should confirm ADU size allowances with their local planning department. 
  • Municipalities must allow ADUs if they fall within the state law, but they can impose certain design and location regulations.

This statewide policy makes it easier for homeowners to expand their living spaces, whether for family use or rental purposes. But what about local city regulations? Let’s take a look.

How Arizona Cities Are Adapting

With the new law in place, municipalities like Phoenix and Tucson have quickly updated their zoning codes to reflect state requirements.

Phoenix ADU Rules

Consistent with the new law, Phoenix permits up to two ADUs per lot in single-family residential zones (one attached and one detached). A third ADU is allowed on lots measuring at least one acre, provided that at least one of the ADUs qualifies as affordable housing. Here’s what to keep in mind:

  • Each ADU shall not exceed 75% of the main house’s gross floor area, and for lots up to 10,000 square feet in net area, 1,000 square feet; for lots over 10,000 square feet in net area, the lesser of 3,000 square feet or ten percent of the net lot area.
  • The maximum size depends on the lot size and zoning restrictions.
  • Off-street parking requirements may apply, depending on the location.

Tucson’s ADU Updates

Tucson permits at least one ADU per lot. The maximum size is 75% of the gross floor area of the primary dwelling, up to a maximum of 1,000 square feet. All lots qualify for an ADU of at least 650 square feet, however, regardless of dwelling size. Additional considerations may apply based on historic or designated overlay zones.  

For homeowners in other Arizona cities, it’s best to check with local planning departments to ensure compliance with specific municipal requirements.

Key Considerations for Homeowners

While the new law makes ADU construction more accessible, there are still important factors to consider before breaking ground.

HOA Rules & Restrictions

While state law mandates that municipalities allow ADUs, it does not override private covenants or restrictions set by HOAs. Therefore, even if local zoning permits an ADU, your HOA may have rules that restrict or prohibit their construction.

Zoning & Lot Coverage

Not all properties are automatically eligible for ADUs.

  • Confirm your zoning classification using tools like Phoenix’s “My Community Map” to ensure compliance.
  • Check your lot coverage limits—some zoning districts restrict how much of the land can be covered by structures, including ADUs.

Rental & Occupancy Considerations

Arizona’s ADU law provides flexibility for homeowners looking to rent out their units. However, local ordinances may still impose short-term rental restrictions or require owner occupancy on the property – owners should confirm any potential restrictions.

Permits & Building Codes

Before constructing an ADU, homeowners must obtain the necessary permits and comply with local building codes. Municipalities may have specific requirements related to:

  • Structural safety (foundation, roofing, etc.).
  • Utility connections (plumbing, electricity, sewage).
  • Fire and emergency access (fire sprinklers, exit pathways).
  • Setback and height restrictions (distance from property lines, max height limits).

Failure to obtain proper permits can lead to fines, legal issues, or even forced removal of the ADU. Homeowners should consult with qualified legal counsel, zoning officials, and contractors before proceeding with construction.

Why ADUs Matter for Arizona’s Housing Market

The legalization of ADUs is more than just a win for homeowners—it’s a game changer for Arizona’s housing market. With rising housing costs and increasing demand for affordable living spaces, ADUs offer a practical and cost-effective solution.

Whether you’re looking to accommodate aging parents, generate rental income, or simply increase your property’s value, ADUs provide an accessible housing option without the need for large-scale developments.

Ready to Build an ADU? Here’s Your Next Step

If you’re thinking about building an ADU on your property, Gottlieb Law can help you navigate the legal and zoning complexities. From ensuring compliance with state and local regulations to addressing HOA restrictions and rental agreements, our team provides the legal guidance you need to move forward confidently.

Contact Gottlieb Law to discuss your ADU plans and ensure you’re fully prepared to take advantage of Arizona’s new housing opportunities.

Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation.  Laws change over time and you should seek counsel to discuss any specific legal questions.

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