It is an understatement to say that there are a lot of new landlords in Arizona. While many new landlords are quick to get a lease in front of a tenant just to get it signed, they don’t read the terms of the lease and don’t know what are their rights and obligations. I see this most often with new landlords using standard internet leases that have no bearing on Arizona law. I even see internet leases that are supposed to be “tailored” to Arizona, but violate basic principles in the Residential Landlord Tenant Act. To provide some reference, here is a list of oldie-but-goodie lease terms to be included:
- List the signing tenants, and all authorized occupants by name
- Term of lease – start date and expiration – whether month to month or yearly
- What happens upon expiration – does lease automatically renew on month to month, or does it automatically expire and the tenant has to move without notice?
- Rental amount per month, plus prorated rental amount for first month.
- Identify where and how the rent is to be paid. Indicate that if the rent is put in a drop box or sent via mail, the tenant assumes the risk of loss until the rent is actually received by the landlord. What about Late fees – $/per day. When do late fees start? Do you have grace period? If so, lease must state that rent is still late on the 2nd, but the late fees don’t start till later.
- Charges for serving 5 day notice?
- Charge for NSF for returned rent checks?
- Addresses for landlord and tenant for all notices to be sent. Are you going to make notices deliverable via email?
- If the property is owned by a legal entity (e.g. LLC) or if the owner isn’t managing the property, list the person who is authorized to manage the property and to whom all legal notices should be directed.
- Address who is to pay all utilities. If landlord is to pay, and tenant to reimburse, state that utilities are due and owing as rent.
- Refundable v. non-refundable. Deposits cannot exceed 1.5 times the monthly rent.
- Statement that security deposit can not be used for last months rent.
- Statement that if taxes increase during the term of the lease, that the tenant is liable for that amount, and the rent will increase accordingly.
- Consider requiring the tenant to have renter’s insurance and potentially name the owner as an additional insured.
- If the home is in an HOA, the lease should reference the HOA, incorporate the CC&R’s and state that a breach of the CC&R’s and HOA rules is a violation of the lease. Tenant is liable for any HOA violation fees.
- Jury trial waiver in the event of litigation
- Consider including a statement that any personal property abandoned in the home after the landlord has obtained possession, are considered abandoned and may be disposed of at the landlord’s discretion if the value is not worth conducting a sale.
- Pets – what kind and how many – be specific. Consider including an additional deposit for having a pet, but be sure not to exceed the total amount of deposits permissible. Alternatively, simply charge a flat administrative fee associated with the pet. Remember, assistive animals are not pets, and you can not charge a pet deposit for a disabled tenant with an assistive animal.
- Include a provision wherein the Tenant designates a person that the Landlord may release the Tenant’s property to in the case of an emergency or if the Tenant dies. A.R.S. § 33-1314(F).
Addendums that should be considered:
- Where the tenant may obtain the applicable laws governing their rights (Effective 1/1/13, it’s the Arizona Department of Housing)
- Mold information
- Pool information, if applicable
- Lead paint disclosure
- Statement that Tenant has had an opportunity to view the home prior to entering into the agreement. That the home is in good and clean condition and will be returned in the same manner, less reasonable wear and tear.
- Specify who is to maintain the property. In general, most repairs are the Landlord’s responsibility as they own the home. However, under Arizona law some responsibilities may be transferred to the Tenant for proper consideration in single family home rentals. See, A.R.S. § 33-1324(C).
These are, of course, not all of the terms to be included in the leaseand some may or may not apply given your specific circumstances. However, it’s important to remember that your lease is one of the most important parts of running a landlord’s business. Make sure it’s comprehensive and up-to-date.