Many investors find the prospect of commercial real estate attractive. A well-managed commercial structure with trustworthy, long-term tenants may be quite lucrative for the landlord, and it is almost certainly a route to financial security. But, despite its many benefits, there are a few things to think about for real estate investors considering a purchase when it comes to commercial real estate law in Arizona and the non-contractual obligations of a landlord to a commercial tenant.
This article is designed to assist commercial property owners and lessees understand what they can anticipate when they take on the responsibility of managing a commercial property. This piece may also help citizens recognize their commercial tenant rights in Arizona.
Eviction Laws for Arizona Commercial Business Owners
A month-to-month business tenancy may be terminated by the landlord after a ten-day written notice. The notification should be sent by certified mail.
If a business tenant fails to pay rent or any other breach of the lease, the landlord or his representative may re-enter the premises and take possession without warning. However, it is often prudent to issue a written demand for payment of rent or for correction of the violation.
The landlord may choose to take possession of the property himself or begin legal action to have the tenant evicted. The hearing on a forcible detainer must be held within thirty days of the filing of the action, and hearings are fast-tracked and must be completed in 30 days.
Following the landlord’s acquisition of possession, he has a lien on all non-exempt personal property on the premises belonging to all business tenants. If rent is not paid within sixty days after it becomes past due, the owner may sell the property to pay off the debt.
Maintaining Livable Premises in Arizona
Under Arizona law, landlords must make all necessary repairs and take other steps to maintain the property in a fit and inhabitable condition, according to Arizona 33-1324. Custom work or modifications, on the other hand, are not the responsibility of the landlord and must be mentioned in the lease.
Arizona 33-1324 also states landlords must adhere to building codes, make repairs where necessary, keep common areas clean and safe (where applicable), maintain and repair systems like plumbing and electrical, ensure running, hot water, air conditioning, and heating.
Real estate developers in Arizona should use the services of an experienced real estate law firm to make sure any leases signed before the project’s completion are realistic and obtainable, as the state’s Residential Landlord and Tenant Act divides responsibilities between landlords and tenants.
The Quiet Enjoyment Law in Arizona
In the same vein as decent living conditions, Arizona landlords are obliged to allow their tenants’ quiet enjoyment of the leased premises. A covenant prohibiting the landlord from disturbing or restricting the tenant’s use of the property in any manner is included in every rental agreement or tenancy.
The Landlord and Tenant Agreement, which is a legal document, usually includes a quiet enjoyment clause. Because this is a state-specific issue, it’s critical to work with an experienced real estate attorney who can explain all of the ramifications of this presumed right for commercial renters in Arizona.
American Disabilities Act Adherence
All businesses that are open to the public or have more than 15 employees must ensure that their facilities are accessible to disabled people, according to the Americans with Disabilities Act (ADA).
Make sure you and your landlord agree on who will pay for any necessary modifications, such as adding a ramp or increasing door widths to accommodate wheelchairs.
Landlords Required to Remedy and Repair
A landlord in Arizona is typically not required to make repairs or improvements to the property that are not expressly stated in the lease agreement unless they are specified in the lease. Except for “reasonable wear and tear,” most leases demand the tenant to return the rental property to the landlord in good order at the end of the lease term.
However, if the renter causes damage to the property, the landlord may sue a tenant for compensation if those flaws or repairs were caused by long-term damage to the real estate. This is known as “waste.”
Subleasing Commercial Properties in Arizona
A commercial landlord in Arizona must be aware that a commercial tenant has the ability to sublease or assign the lease to any person (subject to certain state conditions) unless they are expressly prohibited from doing so.
If you don’t have any contracts that prohibit or require landlord consent, this could come as a surprise. You may find yourself with an undesirable business or tenant on the premises if you haven’t prepared agreements to prevent it or necessitate landlord approval.
Although most landlords would rather have a sublease or assignment than no tenant at all, they may not regard this as an essential legal provision. However, simply including a clause that states that landlord approval is necessary for any sublease or assignment can provide you peace of mind and keep the choice in your hands.
Material Breaches in Arizona
A material breach of the lease is one that has a “substantial,” “material” impact on the tenant. The State of Arizona classifies breaches into two categories: “material” and “immaterial.” The law recognizes that some minor breaches in a lease are insignificant and should not be considered grounds for eviction or legal action.
Following the Irrevocable Mutual Waiver, under the Reinstatement of (Second) Contracts § 241, there are certain non-legal standards to assist streamline the process of determining a significant breach in a commercial real estate lease.
Premises Liability for Business Owners in Arizona
Business owners are responsible for the safety of everyone on and around their property. Inaction or careless disregard for hazards, as well as a lack of constant upkeep, amounts to business owner negligence, which creates a dangerous environment for visitors, staff, and others.
Commercial and residential property owners are both obligated to keep their premises safe. Anything less than a full fulfillment of this obligation can result in accidents that may be expensive to repair.
While the bulk of premises liability is focused on property owners, maintenance contractors, management firms, and lessees are similarly connected to any potential litigation resulting from personal injuries at a specific location.
Need Some More Assistance?
If Arizona commercial real estate laws are not adhered to, tenants may have the right to compensation, Arizona commercial lease cancellation, and more. If you have any questions regarding your commercial property as a business owner, you’ll want to get in contact with real estate and law professionals who know the law.