Legislative Update

By Mark B. Zinman,
Attorney at Williams, Zinman & Parham P.C.

On May 10, 2017, the Arizona legislature adjourned, thus closing another legislative session. May 22 was the last day for the governor to sign the bills into law, veto them, or take no action which in effect is a veto. As always, there was great debate about what bills would become law, and which others would not make it out of the legislature.
In Arizona, and all across the country, landlord-tenant matters are always hot topics in the legislature. Before discussing what has happened locally, it is worthwhile mentioning a law that was passed in another state – this gives you, the reader, and perspective on the status of our law. This year, the city of Portland, passed a law requiring landlords to pay tenants a relocation fee when terminating the lease for no-cause or when increasing the rent by over 10%. This means that landlords that give a month-to-month termination notice would be liable to the tenant for this relocation cost. This can range from $2,900 to $4,500 per household. Think about the significant detrimental impact this will have on the rental market, when investors are deciding whether to buy rental properties in Portland.

Anyway, back to Arizona. There are a few different laws that were passed that are significant to landlords. First, a law was passed that prohibits courts from mandating landlords and tenants use specific forms and pleadings. (More information in AZREIA April, 2017 newsletter). As many readers know, there was a push to pass a court rule that would require specific forms be used as a precursor to evictions and other landlord-tenant actions. Landlords that have been using the same form for years, would have their evictions dismissed because the form didn’t exactly match the court-mandated form. This was the ultimate example of form over substance. Thankfully, the Arizona legislature recognized the issue and the fact that evictions are statutory in nature and passed law that prohibits such a court rule. Unless something drastic changes, landlords will continue to be able to use the forms that they have for decades.

Another big change dealt with the Arizona version of the Americans With Disability Act. Any business that owns property open to the public, knows about the volume of ADA complaints that were filed against business last year. Over 1,500 lawsuits were filed against countless different business alleging that their properties were not compliant with the ADA because their parking did not meet handicapped requirements. In some cases, the lawsuit was based upon the fact that the handicapped sign was two inches below the ADA mandate. The new law provides that a property owner will have 30 days or more to fix an ADA violation, once they are put on notice, and before suit is filed. The owner is only to be sued if they fail to take appropriate action within the applicable time period. Please note that the ADA only addresses “public accommodations” – these are areas of property that are open to the public and you would want any John Doe being present. This would include retail stores, commercial office buildings, and certain areas of an apartment community such as an office. A single-family rental home has no areas that are for the “public” and thus ADA would not apply, though fair housing laws do apply.

Legislation also passed this year to remove the maximum cap limit that apartments may pay tenants for referrals. This law is an exception to the regular premise that you can’t pay people for real estate services, unless they are licensed real estate agents. Under A.R.S. 32-2176, landlords have been able to pay a tenant for a referral in the amount of $200 up to 5 times in a 12- month period. The new legislation removes the $200 cap, and allows the landlord complete discretion in the amount of the referral fee and the number of times the fee is paid to a tenant. Remember, this only applies to apartment communities paying funds to their own tenants. Owners of single-family homes still cannot give out referral fees unless the recipient is a real estate agent.

For those AZREIA members who own single- family rentals, there has been a law passed regarding towing of cars. This will impact how HOAs can remove cars legally parked in your properties. The law now requires that before a car can be towed, that the property owner or HOA find more evidence of abandonment than just the fact that the car has expired tags. In other words, where the car is authorized to be present, an HOA needs more evidence than just the fact that the car is not properly registered before it can be towed. Things such as flat tires or the fact that the car is inoperable, in addition to expired tags, would seem to support the fact that a vehicle is abandoned and may be towed. If you own a home in an HOA, you know this to be an issue with overaggressive HOAs. While many readers will wonder about the importance of some of these legislative changes, no one should wonder about the importance of those laws that were not passed. For example, there was a proposed law to enact rent control in Arizona.

While this is currently prohibited by law, it is a suggestion that comes up every year. It is because of this that I am always happy to report when no significant legal changes are made in the landlord-tenant world. No news is definitely good news.