By Mark Zinman | Zona Law
Question: I have been approached by a vendor to add smart home features to my rental home. This will provide features including smart door locks, smart lights, and even leak detection. It usually costs $99, but they are offering it at $59 now if I sign up for a year contract. I am in the middle of the lease, but can I make the tenant pay that $59 fee since it isn’t much money?
Answer: The general rule is that you can’t charge a new fee during the term of a lease, as the tenant doesn’t have a chance to reject it or move. That would be the “substantial modification,” which is prohibited by Arizona law. There are a few statutory exceptions to that rule, but none would apply here (e.g., utility charges and taxes when those are in the lease and provided by law). The reality is that providing a new service and charging less than $100 isn’t much, but if you could do that mid-lease, there would be nothing stopping a landlord from charging $1,000, and the tenant would be similarly stuck. Therefore, put it in the lease and charge it on new move-ins. For your current resident, you can offer it and try to get them to opt-in if they want the service and make them pay for it, but you can’t force them to join mid-lease.