With the increase of properties being sold at trustee’s sale, and the unknown condition that buyer’s are taking them, many owners need to fix up properties before they are habitable as a rentals. Unfortunately, it is often the case that the new owner is unable to afford licensed contractors and the owners are looking for a more affordable way to improve the property. To avoid the cost of hiring licensed contractors, many owners are going online and posting ads to find a handyman willing to fix up a property and rent it for a reduced rate. In these scenarios, the future tenant is to fix up the place and then move in once it is completed. In theory, this sounds like a win-win for the owner and the handyman.
Of course, things never go as planned. We have seen an influx of instances where the handyman simply moves in to the property and refuses to do any work. Clients come to us asking what the quickest way is to get this person out of the unit and whether they can just call the police. Based upon experience, I can tell you that the police likely will not remove a person from a home when the occupant has a key and a good story (whether or not that story is true). Unfortunately, in these circumstances, an owner likely does not have proper documentation explaining why the occupant has keys and what rights the owner retains. The police regularly state that it is a civil matter and they won’t intervene in the matter. Since the police will not remove the occupant, a landlord must give a demand for possession and file an eviction alleging that the person is a trespasser.
The next problem that the owner will face is that at court, these occupants often argue that they have an oral month-to-month tenancy and can not be evicted without a 30 day notice; if the judge agrees, then the owner will have to deal with a rental agreement implied by law. Arizona law provides that when a landlord gave the tenant the key, they gave the tenant possession. When there is no written rental agreement, the law provides that a tenant is to pay the fair rental value and unless rent is paid weekly, the tenant has a month-to-month tenancy. Further, under a month-to-month tenancy, a 30 day notice must be given to terminate the lease.
These situations often create bitterly disputed evictions. The owner is claiming the person is trespassing and the occupant is claiming they have an oral lease. It’s a heated he-said/she-said eviction. Therefore, always enter into a written agreement before giving a person keys to your unit. For example, if you are intending to create a tenancy, enter into a written lease prior to giving possession and do not have the tenant do work in lieu of rent. If you want, enter into a separate agreement to have the person do work. Alternatively, if the person is not a tenant but only a handyman, enter into an agreement specifying that they are only to access the property during regular business hours to do work, they are not allowed to live on property and they are a trespasser and can be removed by the police in the event they breach that agreement. While nothing is going to completely protect an owner, these agreements may save an owner from significant headaches.
Finally, its important to remember that if the agreement for contracting exceeds $1,000, the contractor likely is required to be licensed by the Arizona Register of Contractors, A.R.S. 32-1121(A)(4), and the contract is required to be in writing containing, among other things: identification of the parties, work to be completed, and the amount to be paid.