The Cities of Tempe and Gilbert have increased their transaction privilege tax rate. Landlords are required to collect tax on all monies paid by tenants (including rent payments, repair charges, pet fees, and nonrefundable deposit fees). Landlords are required to send the tenants notification of the tax increase 30 day prior to the new tax effective date. The City of Buckeye had this issue on the ballot for July and it passed. A quick review of the written lease term can easily resolve the issue. The lease needs to state the rent plus tax (regardless of what the tax rate is that is listed on the lease) before the tenant is liable for the higher tax amount.
As a side issue, SB 1239 attempted to cap all rent taxes at their current levels and would have required a vote by the people to increase them. This will likely be raised again since only a few states even have this type of tax.
Everyone in Arizona knows about this law, unless you have been living under a rock during the past two months. This law provides authority for the state law enforcement to inquire into the legal status of anyone they have probable cause to stop and believe that may be in the country illegally. It also gives state law enforcement authority to transport a person in the country illegally directly to ICE instead of waiting for ICE to come to the state facility to transport that person. It is illegal for law enforcement to base their decision to check legal status on race, color or national origin. The way the new law is worded, it is illegal to knowingly provide housing to a person who is in the country illegally which may leave landlords exposed to some liability if they don't ask for documents that prove the prospective tenants are legally in the USA. However, this issue was defeated the last time the Arizona legislature attempted to require a landlord to determine the legal status of a prospective resident before they rented to them. It should be noted that this law is currently under appeal so watch for changes but it is unclear whether the Justice Courts will be impacted any time soon and whether the changes will affect landlord tenant issues.
This law increased the finder fee referral payment a landlord may give a tenant who is not a licensed realtor to $200 rental credit for a maximum of five times in any twelve month period ($1,000 total rent credit). It also clarified that the tenant shall not show the property for the owner, discuss terms of the lease on behalf of the owner, nor negotiate the lease terms on behalf of the owner. The Rules of Eviction Actions makes it clear that no other type of cases (including employment claims) may be combined with an eviction case. See RPEA Rule 8(c).
This law requires an Owner to notify a tenant in writing if the rental agreement is entered into after the foreclosure action was initiated. There is specific language required in the notice (a sample form is available at www.doctorevictor.com). This law exempts residences that are four or more connected units. There is a substantial penalty for violating this provision. Specifically, this new law states that if an owner fails to provide the statutory notice pursuant to this new law, the tenant may deliver a written notice pursuant to ARS §33-1361 (10 day breach notice) and can recover damages and obtain injunctive relief, essentially terminating the lease. Additionally, the security deposit must be itemized pursuant to ARS §33-1321.
This law prohibits cities from requiring a landlord of residential property of four units or less to pay the tenant's unpaid water or waste bill before they will reinstate service unless the landlord has signed a contract agreeing to be responsible for the bill along with the tenant. This law is not retroactive.
There was a companion bill, the Solid Waste Private Enterprise bill, which was not passed that purported to make it illegal for a municipality from entering into exclusive contracts with waste haulers and preventing competition between private waste haulers. Watch for that bill to be revived in the next session.
The changes to the definition of domestic violence now include some categories that most people thought were already encompassed by the previous definition: first and second degree murder, manslaughter and sexual assault. This new law added additional offenses that were surprising: intentional or knowing cruelty or neglect or abandonment of an animal that results in serious physical injury to an animal and preventing or interfering with the use of the telephone by another in an emergency. Arizona landlords are required to allow victims of domestic violence to be released from their lease if those tenants meet certain criteria. See ARS §33-1318. This issue frequently comes up in the Justice Court in two ways. The landlord can sue the alleged perpetrator of the domestic violence for any money damages the landlord experiences due to the early termination of the contract (lost rent, lease break fees, rent concessions and damages to the unit if they were caused by the perpetrator). The issue will also come up as an issue by the tenant in a civil action post possession for money damages or return of the security deposit (but not in an eviction action because the tenant is required to pay rent for 30 days past the notice to early terminate the lease and turn over possession within 30 days).
The changes in these two statutes restrict HOA's from prohibiting open house signs, for sale or lease signs in most circumstances. However it does allow certain limitations regarding the time of the open house, the placement of the signs, and the size of the signs.
This law was just extended to December 2014 and the federal government now included a definition for the date of the "notice of foreclosure" to be the date the title changes to the new owner. This law has impacted Justice Courts because there are some occupants of a foreclosed property which may be "bonafide tenants". Those people may have some additional protections under this federal law but they are required to exercise those rights prior to the eviction action by paying the rent to the new owner (from the date of the sale), producing a lease and proof of payment during the alleged lease term, and proving that they are a bonafide tenant (see restrictions in the law). With the new definition, the argument is that any person who is otherwise a bonafide tenant and enters into a lease with the previous owner 90 days prior to the actual sale has rights under the law. Previously, the argument was that the lease had to be entered into 90 days before the Notice of foreclosure was recorded (which is usually 90 days before the actual sale).
If a potential bonafide tenant receives a written notice from the new owner that demands proof of a bonafide lease that is not in default (ie: failure to pay previous rent) within a certain period of time and demand for payment of rent that has accrued since the purchase at foreclosure, AND that person fails to meet those requirements BEFORE the initial court date, the person has probably failed to protect any alleged rights they may have had under the federal law and will likely be evicted.
A. SB1303-Failure to Register Penalties: Recently tenants have argued that they are not liable for rent because the landlord was not properly registered with the state and that the lease was therefore invalid and that they are entitled to a full refund of all rent they ever paid. SB1303 purported to given a reward or a percentage of the penalty the state may have imposed to anyone who reports that a property was not listed with the county as a rental property. That bill died early in the session. However, the law that the tenant is actually referring to is ARS §33-1902. This law requires a landlord to register as a landlord but only the state has any monetary enforcement rights. This statute does provide for some remedies by the tenant if the landlord violates this requirement. The tenant may give the landlord a written 10 day breach notice and terminate the lease without future penalty (ie: lease break fee, rent concession payback) if the landlord fails to register the property within the ten days following receipt of the notice. The security deposit time frame is shorted to 10 days from general requirement of ARS §33-1321 which gives the landlord 14 business days. Additionally, the tenant is entitled to a refund of all PREPAID rents, not rents paid during their occupancy of the unit.
B. HB2210-Bed Bug Bill: The bill had difficulty in the Senate because all parties were attempting to carefully craft language that would protect both the landlord and the tenant. It is likely to be reintroduced in the fall. Currently, the Arizona Residential Landlord Tenant Act addresses all alleged breaches by the landlord and the tenant. With the invasion of bed bugs, there is not much guidance on how to determine the source of the infestation, the protocol for treatment, and the allocation of responsibility and liability of both parties. A landlord may wish to start using a Pest Control Addendum to specifically allocate responibilities and liabilities of the parties. See our website for a sample form.
C. HN2462-Towers of Vehicles on Private Property This law would have modified previous tow rules from private property however it was vetoed by the Governor. If a landlord permits a private company to tow a vehicle, the landlord must have a clear contract with the tow company that specifically states the tow company's right to tow, the limitations of the towing, requires the tow company to follow the law and exonerates the owner of the property from any responsibility and liability for the tow.
By Mr. Hull