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.