Arizona Landlord’s Deskbook

The definitive reference on Arizona landlord and tenant law!

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Practical Approach to a “Real World” Dilemma


Most books and legal guides tell you what you can/cannot do under the law.  That is all well and good, but a mere recitation of the law does not explain how to apply the law to the facts of the problem you have right now. What most landlords want is a quick, inexpensive and practical answer to their immediate problem.  This book was written with those landlords in mind and with an eye toward “real world” problems that actually happen every day.  


Consider this “hypothetical” situation. Your residential tenant tells you that he has just lost his job, his car has broken down and he has one dollar to his name.  Assume that his rent is paid through the end of the month (one week away). The only thing hypothetical about this situation is the part about the tenant voluntarily telling you this information before his rent is overdue. As we both know, tenants never volunteer any information. In truth, this is a very common “real world” scenario.


Question — How do you handle this all too common occurrence?


Answer — There are two possible solutions:


(1) the legal solution and


(2) the practical solution.



• The Legal Solution: Give the appropriate notices and evict him when he fails to pay next month’s rent.


How long will this really take? You can’t give him a notice to vacate until his rent is overdue; rent is not yet overdue. Rent will again be due on the first of the month, but, let’s face it, most rental agreements provide that rent is not “delinquent” until after the fifth of the month (what does your rental agreement say?).  And most landlords won’t do anything until rent is delinquent. In truth, even if your rental agreement provides rent is delinquent after the fifth of the month, rent is “overdue” (i.e., “unpaid and due”) on the second day of the month, and you may begin the eviction process on that day. As a practical matter, however, most landlords won’t start the process until the sixth day of the month. Early on the sixth day, you give him a Five-Day Notice to Pay or Quit. Five days later (calendar days), not counting the day you served him with the Five-Day Notice, is the eleventh day of the month. On the twelfth day of the month you file your eviction action (actually called a “Special Detainer” action in the Act, but is now referred to as an “eviction action” under the Arizona Rules of Procedure for Eviction Actions, which went into effect in 2009). The justice court (most eviction actions are filed in justice court) gives you a court date not less than three days nor more than six days (business days) away (not including the day you file the action), which will inevitably include a weekend and possibly a holiday, which are not counted. That gives you a court date on approximately the eighteenth day of the month. You go to court on the eighteenth and receive a judgment for possession and past due rent.  The Writ of Restitution, which grants you the right of possession of the premises, however, will not be issued until (you guessed it) another five calendar days has elapsed.  You get your Writ of Restitution on the twenty-fourth. You immediately pay the necessary fee to the constable to go out and “forcibly” evict him. It is your lucky day and the constable gets around to serving him with the Writ the very next day (if you haven’t already guessed, this is an unlikely occurrence). It is now the twenty-fifth. But wait, the constable has learned through experience that once a tenant sees him at the door, s/he will pack-up and leave. So the constable goes to the door, the tenant sees him and “swears” that he will be out tonight. The constable will probably give the tenant twenty-four hours to get out before actually executing the Writ. The next day the tenant is either gone or the constable forcibly removes him. It is now the twenty-sixth day of the month. You are out nearly a month’s rent, plus whatever time it takes to make repairs and get the unit ready for the next tenant. In addition, you are out the cost of filing the eviction action, the fee paid to the constable and any administrative and legal fees. Incidentally, you have made the last thirty days very unpleasant for this tenant; in return, you may anticipate that the amount of repairs that have become necessary during the last thirty days will probably exceed “normal wear and tear.”


• The Practical Solution: Pay him to leave.


Remember, he is paid up through the end of the month. Tell the tenant that if he is out at the end of this month and the unit is reasonably clean, you will refund all his deposits or, if he has no deposits, that you will give him some amount of money (i.e., $100, $200, etc.). “Heresy,” you exclaim! You are offended by the mere notion of paying this deadbeat to get out. Remember, this is business. Take the course of least resistance and the one that is most economical in terms of your time (which I presume is worth something) and your money (don’t forget the court costs, process server, constable’s fee, etc.). Compare the two solutions:


• The legal solution gives you possession of the premises twenty-six days later (maybe), a judgment against a deadbeat, the wonderful opportunity to spend lots of time with those incredibly fast, efficient and courteous people down at the courthouse, and a month of headaches.


• The practical solution, on the other hand, gives you possession of the premises on the first day of the month; with luck, the unit is even clean. In any event, the deadbeat is gone and you can immediately put in a paying tenant.


The decision is yours, as it should be. I will endeavor to give you guidance as to what you may or must do under the law, but I will also tell you about other options available to you (which are also in accordance with the law) that I have learned through time, practice and experience, that usually produce the best result. Nevertheless, you, as the landlord, must make the ultimate decision.

PROLOGUE
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TABLE of CONTENTS

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CHAPTER


1. PRELIMINARY MATTERS

A. HOW TO GET THE MOST BENEFIT FROM THIS BOOK

B. WHAT THIS BOOK COVERS

C. WHAT THIS BOOK DOES NOT COVER

D. CONVENTIONS

E. CAVEAT FROM THE AUTHOR AND PUBLISHER

F. COMMENTS AND SUGGESTIONS; ERRORS


2. PREPARATION

A. GENERAL GUIDELINES FOR DOING BUSINESS

B. LEGAL ADVICE TO LANDLORDS

C. APPLICABILITY/SCOPE OF THE ACT AND THE LANDLORD AND TENANT STATUTES

D. REVIEW/CREATE YOUR RESIDENTIAL RENTAL AGREEMENT

E. PREPARE YOUR OTHER FORMS


3. GETTING TENANTS

A. PREPARE UNIT FOR NEW TENANTS

B. ATTRACT APPLICANTS — ADVERTISING

C. SHOW THE PROSPECTIVE TENANTS THE UNIT

D. HAVE THE TENANTS FILL OUT THE APPLICATION

E. SELECT THE BEST TENANT; REJECT ALL OTHERS

F. TERM OF TENANCY


4. MANAGING TENANTS EFFECTIVELY

A. THE ART OF EFFECTIVELY HANDLING TENANT PROBLEMS

B. COMMONLY RECURRING TENANT PROBLEMS

C. PROBLEM TENANTS


5. TERMINATING TENANTS AND EVICTIONS

A. NORMAL TERMINATIONS

B. EVICTIONS


6. CIVIL JUDGMENTS AND COLLECTION

A. LAWSUIT FOR DAMAGES

B. COLLECTION OF JUDGMENTS


7. COMMERCIAL LEASES

A. OTHER RELEVANT MATERIAL

B. PREPARATION

C. TENANTS AND TENANT PROBLEMS

D. TERMINATING TENANTS AND EVICTIONS

E. APPENDIX OF COMMERCIAL FORMS


QUICK REFERENCE SECTION

I.  QUESTIONS AND ANSWERS

II. PROCEDURES


APPENDICES

APPENDIX A — CHECKLISTS

APPENDIX B — FORMS

APPENDIX C — STATUTES

APPENDIX D — JUSTICE COURTS OF ARIZONA


GLOSSARY


INDEX


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Below is a reprint of the "Prologue" from the

Sixth Edition of the Arizona Landlord's Deskbook.


COMPLETE TABLE OF CONTENTS


Foreword


The Author


Introduction


PROLOGUE: Practical Approach to a “Real World” Dilemma


CHAPTER 1. PRELIMINARY MATTERS

A. HOW TO GET THE MOST BENEFIT FROM THIS BOOK

B. WHAT THIS BOOK COVERS

C. WHAT THIS BOOK DOES NOT COVER

D. CONVENTIONS

E. CAVEAT FROM THE AUTHOR AND PUBLISHER

F. COMMENTS AND SUGGESTIONS; ERRORS


CHAPTER 2. PREPARATION

A. GENERAL GUIDELINES FOR DOING BUSINESS

1. Be honest

2. Be straightforward

3. Keep it simple

4. Be businesslike

5. Be authoritative

6. Stay up-to-date

7. Err conservatively

B. LEGAL ADVICE TO LANDLORDS

1. Avoid litigation

(a) Get a lawyer

(b) Get the right lawyer

(c) Have your lawyer prepare your forms

2. Asset protection

C. APPLICABILITY/SCOPE OF THE “ACT” AND THE LANDLORD AND TENANT STATUTES

1. Preemption

2. Which state law applies?

3. Where does the “Act” apply?

4. Does application of the “Act” vary depending on the number of units?

5. Does the “Act” apply to you?

6. Exclusions from the “Act.”

(a) Exclusion #5 and the case of the on-site manager

(b) Exclusion #7 – Public Housing

D. REVIEW/CREATE YOUR RESIDENTIAL RENTAL AGREEMENT

1. Rental Agreement MUST’s

(a) Disclosure of manager and owner or owner’s agent; out-of-state owners must have statutory agent; and registration of all residential rental property

(b) Deliver a signed copy of the written rental agreement to the tenant

(c) The written rental agreement must be complete

(d) The purpose of nonrefundable fees/charges must be stated in writing

(e) Rental agreements longer than one year must be written

(f) Give notice that the Act is available on the Arizona Secretary of State’s web site

(g) Give the tenant a move-in inspection form

(h) Give notice that tenant may be present during the move-out inspection

(i) Give the tenant a pool safety notice

(j) Must disclose real estate license, but not law degree

(k) Provide for rental tax increases

(l) Give the tenant notice about lead-based paint

(m) Give the tenant notice and information about beg bugs

(n) Give the tenant notice about impending foreclosure

(o) Licensees must state in lease the type of earnest money received HUD/EPA Form

2. Rental Agreement SHOULD’s

(a) The rental agreement should be written

(b) The written rental agreement should be comprehensive

(c) The rental agreement should provide for abandonment

(d) The rental agreement should provide for payment of expenses incurred to bring legal action

(e) The rental agreement should provide for payment of “other expenses” incurred by the landlord

(f) The rental agreement should provide for the Tenant’s maintenance obligations

(1) Lawn care

(2) Pool care/maintenance

(3) Pest control

(4) Light bulbs and other “expendables”

(5) Air filters

(6) Repairs and modifications

(g) The rental agreement should provide for regular inspections

(h) The rental agreement should address “reasonable” modifications and alterations

(i) The rental agreement should provide how partial payments (if accepted) are applied to amounts due

(j) The rental agreement should provide for a reasonable late fee

(k) The rental agreement should provide for rental tax increases

(l) The rental agreement should include a liquidated damages provision

(m) The rental agreement should include a jury trial waiver

(n) The rental agreement should address release of the tenant’s personal property if the tenant dies

(o) The rental agreement should include various miscellaneous provisions

(1) Holdover rent

(2) Tenant disconnecting utilities

(3) Parking

(4) Vehicle maintenance and/or repairs

3. Rental Agreement CANNOT’s

(a) The landlord cannot require the tenant to waive the tenant’s rights, agree to pay attorneys’ fees, agree to limit the landlord’s liability, agree to waive or limit the tenant’s right to summon police or emergency services, or to charge or penalize the tenant for summoning the police or emergency services

(b) The landlord cannot collect a security deposit equal to more than one and one-half month’s rent

(c) The landlord cannot include provisions contrary to the Act

4. Deposits

(a) Deposit cannot exceed one and one-half month’s rent

(b) Nonrefundable fees/charges must be stated in writing

(c) The purpose of all nonrefundable fees/charges must be stated in writing

(d) Refund or itemized list within fourteen days

(e) No requirement to pay interest on deposits

(f) Security deposits, as addressed by the Act

E. PREPARE YOUR OTHER FORMS

1. Tenant Applications

2. Tenant Information Sheet

3. Property Inspection Checklist

Sample form

4. Personal Property Inspection Checklist

5. Notice to Terminate Tenancy

Sample form

6. Disposition of Deposits

Sample form

7. Five-Day Notice to Pay or Quit

Sample form

8. Parking Violation

Sample form

9. Miscellaneous Notices

10. Federal Debt Collection Practices Act Notices

11. Option Agreement

(a) “Lease agreement with an option to purchase”

(b) “Lease/purchase agreement”

12. Rental Hold and Option Agreement


CHAPTER 3. GETTING TENANTS

A. PREPARE UNIT FOR NEW TENANTS

1. Curb appeal

2. Interior appearance

3. Compliance with the law

(a) Safety

(b) Taxes

(1) Federal and state income tax

(2) Rental tax – commercial and residential

4. Disclosure

(a) Disclose “obvious” things

(b) Superfund sites must be disclosed

(c) Disclose high voltage power lines

(d) Disclose poor water quality

(e) Disclose potential flooding/water damage

(f) Disclose known radon gas

(g) Disclose “pests”

(h) Disclose noise

(i) Disclose odors and noxious fumes

(j) Disclose proximity to “attractive nuisances”

(k) Disclose known criminal activity

(l) Disclosed “stigmatized” properties

(m) Disclose properties used to make drugs

(n) Sale of apartments

(o) Lead-based paint

(p) Other hazards/conditions

(q) Why all the disclosures?

5. Landlord Representations

B. ATTRACT APPLICANTS — ADVERTISING

1. Free advertising

(a) Sign

(b) Appearance of property

(c) Current tenants

(d) Word of mouth

2. Paid advertising

(a) Newspaper

(b) Billboards and specialized magazines

(c) Real estate brokers/agents

C. SHOW THE PROSPECTIVE TENANTS THE UNIT

D. HAVE THE TENANTS FILL OUT THE APPLICATION

1. The First Application – Step 1 (The Form)

2. The First Application – Step 2 (Ask Questions)

3. The Second Application

E. SELECT THE BEST TENANT; REJECT ALL OTHERS

1. Discrimination

(a) More about familial status

(b) More about handicap

(c) More about the Americans with Disabilities Act

(d) Cohabitation

(e) Liability for the discrimination of others

2. Saying No

Sample form

3. Compliance with the Fair Credit Reporting Act

4. Saying Yes

5. Material Falsification of Information by the Tenant

F. TERM OF TENANCY

1. Exclusive, high dollar rental units

2. Low priced rental units

3. Mid-range units


CHAPTER 4. MANAGING TENANTS EFFECTIVELY

A. THE ART OF EFFECTIVELY HANDLING TENANT PROBLEMS

1. Prevent tenant problems

2. Quickly and fairly resolve tenant problems

3. Tenant survey

Sample form

B. COMMONLY RECURRING TENANT PROBLEMS

1. Continually late rent payments

(a) Month-to-month tenant

(b) Long-term lease

2. “One time” or occasional past due rent

3. Noisy tenants

4. Neighbor conflicts

5. Parking problems

(a) Tenants/guests improperly parked or taking too many spaces

(b) Parking in areas not designated for parking

(c) Parking of commercial vehicles

(d) Disabled and/or unregistered vehicles

(e) Vehicle maintenance

6. Security

7. Accidents and incidents

8. Returned (bounced) checks

C. PROBLEM TENANTS


CHAPTER 5. TERMINATING TENANTS AND EVICTIONS

A. NORMAL TERMINATIONS

1. Adequate notice

2. Damage to the unit

B. EVICTIONS

1. What CAN’T I do to evict a tenant?

2. What MAY I do, under the Act, to evict a tenant?

3. What notice must I prepare?

(a) Material noncompliance with rental agreement

(1) Material falsification of information

(2) General material noncompliance

(b) Noncompliance with the rental agreement materially affecting health and safety

(c) Material and irreparable breach

(d) Nonpayment of rent

(e) “Second occurrence” of the same or similar nature

(f) “Holdover” tenant

4. How do I serve the notice?

5. Where do I file the eviction action?

6. How do I actually file the eviction action?

Sample form

7. FINAL STEPS — What to do AFTER the eviction process

(a) Inspection

(b) Security deposit

(c) Lawsuit for damages

(d) Obtain a Judgment

8. Appeals

(a) Appeal by the landlord

(b) How to oppose the tenant’s appeal

Sample form


CHAPTER 6. CIVIL JUDGMENTS AND COLLECTION

A. LAWSUIT FOR DAMAGES

1. Which court?

(a) Civil lawsuits

(b) Distinctions between the three courts

2. File the lawsuit

3. Service of the Summons and Complaint

4. Answer or default

5. Counterclaim

6. Disclosure statement

7. Alternative Dispute Resolution (ADR)

8. Trial date

9. Judgment

B. COLLECTION OF JUDGMENTS

1. Writs of Garnishment

2. Writs of Execution

3. Other states — “full faith and credit”


CHAPTER 7. COMMERCIAL LEASES

A. OTHER RELEVANT MATERIAL

B. PREPARATION

1. Review Your Business Practices

2. Controlling Law

3. Review/Create Your Lease

4. Review/Create Your Other Forms

(a) Application, Tenant Information, Property Inspection Checklist

(b) Balance Sheet, Profit and Loss, Guaranty

(c) Five-Day Notice to Pay or Quit and similar forms

C. TENANTS AND TENANT PROBLEMS

D. TERMINATING TENANTS AND EVICTIONS

1. Notices

(a) Service of the notice

(b) Five-Day Notice to Pay or Quit

Sample form

(c) Lock-out

Sample form

(d) Notice of Default

Sample form

(e) Lawsuit for Possession

2. Eviction Procedure

(a) Where to file the eviction action?

(b) How to file and serve the eviction action

Sample form

(c) The eviction process — step-by-step

(1) Notice of default

(2) Tenant pays

(3) Tenant moves

(4) File the eviction action

(5) Have tenant served

(6) “Hearing Date” / “Return Date”

(7) Tenant enters plea

(8) Tenant requests and court grants continuance/postponement

(9) Trial

(10) Letter to tenant

(11) Writ of Restitution issued

(12) Writ of Restitution: service and execution

(13) Additional Important Notes

(d) FINAL STEPS — What to do AFTER the eviction process

(1) Inspection

(2) Security deposit

Sample form

(3) Abandoned/seized personal property

(4) Lawsuit for damages

(5) Obtain a Judgment

(e) Appeals

E. APPENDIX OF COMMERCIAL FORMS

FORM 1 — Notice of Default

FORM 2 — Notice of Termination

FORM 3 — Five-Day Notice to Pay or Quit

FORM 4 — Disposition of Deposit(s)



QUICK REFERENCE SECTION


I. QUESTIONS AND ANSWERS


A. THE ARIZONA RESIDENTIAL LANDLORD AND TENANT ACT

• Does the Act apply to me?

• Where does the Act apply?

• Does the Act apply to my on-site manager?

• Can I call all my tenants on-site managers and have the Act not apply?

• Must an out-of-state owner/landlord have a local property manager?


B. THE APPLICATION

• How do I get good tenants?

• May I discriminate against certain people when evaluating whether or not to accept an applicant as a tenant?


C. FORMS

• What are the most important forms?

• Where do I get forms?


D. THE RENTAL AGREEMENT

• Is an oral rental agreement binding?

• What must, should and cannot be in a written rental agreement?

• Should I insist on a long-term lease or is month-to-month better?

• What if the tenant signs the rental agreement, but fails to move-in?


E. DEPOSITS

• What is the maximum security deposit I can collect?

• Must I pay the tenant interest on his/her security deposit during the time that I hold it?


F. COMMON TENANT PROBLEMS

• What legal advice can you offer landlords?

• What business advice can you offer landlords?

• How do I handle a noisy tenant?

• What are some other common problems and how do I handle them?

• What if I drive by the rental and see the front door standing open?

• What if a tenant bounces a check?


G. NONPAYMENT OF RENT

• What do I do when rent is late?

• How do I handle a tenant that repeatedly pays rent late?

• May I shut off the tenant’s utilities for nonpayment of rent?

• May I lock a tenant out of his/her unit and/or seize his/her personal property for nonpayment of rent?

• Can a tenant legally make repairs to the unit and deduct the cost of repairs from his/her rent?


H. EVICTION

• How do I serve a notice to the tenant?

• When can I serve the Five-Day Notice to Pay or Quit?

• What must be contained in the Five-Day Notice to Pay or Quit for the notice to be legally sufficient?

• What other basis is there for eviction?

• How do I know whether a noncompliance is: a material noncompliance, a noncompliance that materially affects health and safety, or an immediate and irreparable breach?

• How do I evict a tenant?

• In which court do I file my eviction action: small claims, justice or superior court?

• Which court has personal jurisdiction over the tenants?



II. PROCEDURES


• What are the procedural steps for evicting a tenant?

Flowchart 1

1. Eviction Process for Nonpayment of Rent

Flowchart 2

2. Eviction Process for: (1) Material Noncompliance with the Rental Agreement; (2) Noncompliance with the Rental Agreement that Materially Affects Health and Safety; and (3) Material and Irreparable Breach of the Rental Agreement

• What do I do AFTER the eviction process?

• What are the procedural steps for issuing Five-Day and Ten-Day Notices to tenants?

• What are the procedural steps for reclaiming an abandoned rental unit?

• What are the procedural steps for conducting a public sale of abandoned personal property?

• What are the procedural steps for collecting money from tenants?

• What if the tenant files bankruptcy?


APPENDICES


APPENDIX A — CHECKLISTS

1 – What to do when you have finished reading this book and are ready to rent your units

2 – Review your rental agreement

3 – “Quick Start” for new landlords and “Checklist” for existing landlords

4 – Getting Tenants

5 – Collection of online resources


APPENDIX B — FORMS

FORM 1 – Tenant Application

FORM 2 – Tenant Information Sheet

FORM 3 – Property Inspection Checklist

FORM 4 – Rental Hold & Option Agreement

FORM 5 – Pool Safety Notice

FORM 6 – Lead-Based Paint Disclosure for Rental Housing

COPY    – EPA/HUD Lead-Based Paint Pamphlet

FORM 7 – Option to Purchase Agreement

FORM 8 – Lease Guaranty

FORM 9 – Adverse Action Notice

FORM 10 – Partial Payment Agreement

FORM 11 – Notice of Parking Violation

FORM 12 – Multiple Purpose Notice Form

FORM 13 – Immediate Termination (Material and Irreparable Breach)

FORM 14 – Five-Day Notice (Pay or Quit)

FORM 15 – Five-Day Notice (Health & Safety)

FORM 16 – Ten-Day Notice (Material Noncompliance)

FORM 17 – Notice of Termination (by landlord)

FORM 18 – Notice of Termination (by tenant)

FORM 19 – Demand for Possession

FORM 20a – Disposition of Deposit(s) (form)

FORM 20b – Disposition of Deposit(s) (notes to attorney)

FORM 21 – Post-Judgment Notice to Tenants

FORM 22 – Judgment Information Statement

FORM 23 – Notice of Abandonment

FORM 24 – Notice of Sale of Personal Property (Ten-Day Notice)

FORM 25 – Notice of Sale of Personal Property (Five-Day Notice)

FORM 26 – Multiple Purpose Notice Form 2


APPENDIX C — STATUTES

Arizona Residential Landlord and Tenant Act

Residential Rental Inspection Programs

Landlord and Tenant Statutes

Slumlord Statutes

Forcible Entry and Detainer Statutes

Abatement of Crime Property Statutes


APPENDIX D — JUSTICE COURTS OF ARIZONA


GLOSSARY


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