Becoming a landlord can be confusing when you factor in all the property legislation and regulations you must follow. Not to mention, each state is different, so if you haven’t invested in a rental property in one particular state before, it can take a minute to get to know the laws and regulations in that area. You may have questions like, what can I withhold a portion of the security deposit for? Or, are background checks illegal? Below are the answers to those questions alongside some other important information that you need to know when investing in property in Arizona.
Rent and Fees
In Arizona, there is no statewide rent control or application fee regulation. However, according to Arizona late fee laws, landlords can charge $5 for every day their tenant’s rent is late. “Late” is defined as after the legal grace period in Arizona, which is five days. That is, landlords must wait at least five days after rent is due before charging a late fee.
If you neglect to repair something in your tenant’s unit that you are obligated to maintain, the tenant can either withhold half of their monthly rent payment, or withhold up to $300, whichever amount is greater. The tenant must tell the landlord that they are planning to repair and deduct, and if the landlord does not comply within 10 days of receiving the notice, the tenant can arrange for a licensed contractor to conduct the repair and then deduct the cost from rent. Of course, if the repair was needed due to tenant negligence, the tenant cannot withhold rent.
Evictions
Eviction laws in Arizona specify three different notices that landlords need to issue their tenants if they’re considering eviction.
If the tenant has unpaid rent or fees, they have five days to either pay the amount due or be evicted. If they committed a lease violation besides nonpayment, they have ten days to either fix the violation or be evicted. However, if the behavior involved in the violation is a threat to health and safety, the landlord can send a notice saying the lease will be terminated in just five days. Also, if the tenant commits what state law calls a “material and irreparable act” on the premises, they can be issued an unconditional notice to quit, which does not offer any opportunity to fix the behavior. A “material and irreparable act” can include homicide, prostitution, illegal drug activity, assault, or any other serious and harmful behavior.
Tenant Protections
As in most states, background checks can be used as a part of your tenant screening procedure. According to Arizona criminal background check laws, landlords can discriminate based on convictions due to the illegal distribution or manufacture of drugs. However, to stay in line with the HUD recommendations for fair usage of criminal background checks, it’s important that you avoid using blanket policies for denying people with prior criminal convictions. You should only deny an applicant if they have shown they may pose a risk to the safety of other residents or of your property.
Required Disclosures
Required disclosures are information that landlords are legally required to tell their tenants about the property. In Arizona, landlords must provide tenants with a move-in checklist that details all existing damage to the property, bedbug educational materials and prevention information, and a notice explaining pool safety measures, along with some other required disclosures. Make sure you are informed on what the law expects you to tell your renters.
Security Deposits
Landlords have specific responsibilities when it comes to collecting and returning tenants’ security deposits. The deposit limit in Arizona is capped at 1.5 months’ rent, and landlords are not required to pay interest on them. Landlords must return the deposit within 14 days of the tenant vacating the unit, excluding Saturdays, Sundays, and other legal holidays. Anything that you withhold from the security deposit must be itemized in a list that you give with the reminder of the security deposit, though you can only withhold funds due to unpaid rent or any other things specified in the lease.
Conclusion
Make sure you conduct your own research regarding real estate legislation in Arizona before making a definite decision about any of your lease terms or conditions. Real estate laws can be tricky to navigate, and becoming familiar with them will pay off in the long run to avoid lawsuits and tenant conflict.
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