Commercial Real Estate Attorney in Arizona

Gottlieb Law - Understanding Commercial Real Estate Law in Arizona

Growing and Protecting Your Portfolio: Understanding the Complexities of Commercial Real Estate Law in Arizona

Growing and Protecting Your Portfolio: Understanding the Complexities of Commercial Real Estate Law in Arizona 1773 1182 Gottlieb Law

Commercial real estate in Arizona can be a lucrative investment, but navigating the legal landscape can be challenging. There are a number of laws and regulations that property owners and tenants must follow, which govern everything from zoning and building codes to tenant rights and environmental regulations. It is important to understand these laws to avoid legal disputes, ensure compliance, and protect your portfolio.  That being said, the law takes a relatively “hands-off” approach to commercial real estate, assuming that commercial real estate investors, landlords, and tenants are sophisticated parties. 

In this guide, we will provide an overview of some of the key commercial real estate laws in Arizona that property owners and tenants need to know. Whether you are a landlord, tenant, or real estate investor, this information can help you maneuver the legal complexities of commercial real estate in Arizona. 

Lease Agreement

The lease agreements executed with tenants is the key, operative legal document that must be reviewed carefully.  The lease agreement will generally contain provisions relating to the security deposit, intended use of property by the tenant, commencement date, rental rate, length of tenancy, rights of renewal, maintenance obligations of the tenant and landlord, insurance, default, and remedies.  

Property owners and real estate developers in Arizona should work with an experienced real estate attorney to ensure any leases signed before a project’s completion are realistic and attainable and contain necessary provisions.

Right to Quiet Enjoyment

Many commercial leases have provisions pertaining to the right of quiet enjoyment, which in Arizona is a legal principle that protects tenants from having their peaceful enjoyment of the property disturbed by their landlord or anyone else who might interfere with their use and enjoyment of the property. If a landlord violates a tenant’s right to quiet enjoyment, the tenant may be able to take legal action against the landlord.  It’s important to note that the right to quiet enjoyment is not absolute and may be limited in certain circumstances, such as when the landlord needs to enter the property to make repairs or address an emergency situation.

Subleasing Commercial Property in Arizona

Commercial tenants in Arizona can typically sublease or assign their lease to another party, unless expressly prohibited by the landlord in their lease agreement. The landlord should be aware of this right and the lease should contain provisions protecting the landlord’s interests if the landlord does not want the property subleased.  

The addition of a clause requiring landlord approval for any sublease or assignment can give the landlord peace of mind and keep the decision in their hands. While most landlords may prefer to have a tenant through subletting or assignment rather than no tenant at all, it is important to be aware of this right and take the necessary steps to protect their property and interests.

Arizona Commercial Evictions

Regrettably, those who have owned or invested in property may have encountered tenants who have not fulfilled their obligation of paying rent. In such cases, landlords should review their lease to determine if a lockout is permissible, and if so, ensure they adhere to the necessary protocol. According to state law, and if not provided any further rights in the lease agreement, tenants have a period of five days to pay rent once due, and upon the expiration of that timeframe, the landlord may lawfully enter and regain possession of the premises, in accordance with A.R.S. § 33-361.

In the event that the landlord takes possession of the premises, it shall possess a lien on all of the tenant’s personal property and may hold it as a means of demanding payment.  The landlord generally provides notification prior to a lockout or sale taking place, and the majority of lease agreements necessitate notification. 

Landlords should consider each situation on a case-by-case basis and may want to seek advice from an experienced commercial real estate attorney.

Find an Experienced Arizona Real Estate Attorney

These are just a few of the main commercial real estate laws in Arizona that property owners should be aware of. It is important to consult with a qualified attorney to ensure compliance with all applicable laws and regulations.

The attorneys at Gottlieb Law have provided industry-leading legal representation to our clients in all things real estate law in Arizona. We work with individuals and businesses on everything from their first home purchase to complex development projects.  Contact our firm today at 602-899-8188 to schedule an initial consultation or make an appointment on our contact us page.

Gottlieb Law - Arizona Commercial Landlord Tenant Laws

A Useful Guide to Arizona Commercial Landlord Tenant Laws

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

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

Use and Adequacy of the Premises

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

Tenant Quiet Enjoyment of the Premises

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

Handling Repairs and Defects

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

Tenant’s Right to Assignment or Sublet in Arizona

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

When Tenants Can Terminate Early in Arizona

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

Delinquent Rental Payments and Commercial Lockout Notices in Arizona

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

Value of a Leading Commercial Real Estate Law Firm in Arizona

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

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