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Blog

Arizona Residential Lease Agreement Essentials

Posted by: John Crow
Date: January 31, 2022

Home > Property Management Tips > Arizona Residential Lease Agreement Essentials

Your One-Stop Arizona Residential Lease Agreement Template

There are many intricate parts about being a landlord, whether you self-manage a property or use property management services. One of the hurdles you’ll need to overcome is the creation of a leasing document that serves both you and your tenants. That’s why we’re dedicating this article to helping you create an Arizona residential lease agreement template that works for you.

Before diving in, it’s important to note that state laws mandate many leasing regulations. As a result, you should be familiar with the relevant rules and mandates in your specific location. If you maintain any type of Arizona rental lease, this guide will help you understand specific information to include on any tenant lease.

While many of the sections in a leasing agreement sound like common sense, it’s of utmost importance to outline them according to fair housing laws. 

What is a Lease Agreement?

The term lease refers to a formal contract between one party (who agrees to rent a space) and another party (the owner of that space). In formal contact language, a lessee is the tenant of the property owner or manager. The lessor is the owner of the property and its associated assets.

One of the main distinctions of a lease agreement is that it guarantees a set time frame in which the lessee rents the property. This differs from a rental agreement, which is typically a month-to-month agreement with options for renewal at the end of 30-day cycles. 

In some states, property owners can choose between a formal lease and a rental agreement. Real estate property laws differ by state. This means that owners in some locations may have to default to a formal lease regardless of personal preference.

Why do you need one?

Leases provide important protection for both the owner and the tenant. Although you might understand their necessity, perhaps you’re still wondering how these contracts offer protection. Below are a few of the ways that Arizona home rental lease agreements provide legal protection.

  • Signed leases establish intent. In most cases, an individual won’t sign a lease unless they’re serious about renting a property. Not only does this show intent, but it also binds them to the rental terms. This helps landlords avoid high turnover, vacancy rates, or renters who change their minds on a whim.
  • Leases outline the rental timeframes. The ability to fill vacancies also depends on timely rental cycles. Your renters need to know when to move in and move out. These dates should be clearly outlined in the lease.
  • Leases provide clarity and answer important questions. Many landlords want to clarify how emergency and property-related situations will be handled. Leases can include the answers to questions about security, maintenance, HOA services, and more.
  • Leasing documents ensure financial stability. As a bottom line, leases establish payment and rent collection responsibilities. Landlords and property owners depend on consistent payments to maintain mortgages on the property. Without a set of formal consequences, you may have tenants who skip payments or send them late.

Core Components of an Arizona Residential Lease Agreement

Whether you’re a property owner in Arizona or you use property management services in the state, there are several important points you should be sure to include in a lease. If you work with a property management team, you’ll likely have personalized help when it comes to drafting leases for each of your properties. This ensures that you include all the essential terms and details that a lessee needs to agree to. 

Start and end date

After a standard agreement paragraph, most leasing documents include the start and end date in one of the first sections. This is important for clarifying when a lease is in effect, and when the contract is no longer applicable under the law. 

Length of the agreement

A formal lease should also include how long the lease is in effect. According to the Landlord Tenant Act, a 12-month agreement is standard and typically the most ideal. While some landlords offer flexibility with shorter or longer leases, there may be extra fees or costs when an agreement falls outside of the 12-month standard.

Rate

In any official leasing document, you must include the monthly rate. This monetary amount is important to both the owner and tenant, and it ensures that the number can’t fluctuate or change after the document is signed. If you have a specific policy for rent collection, such as using an online portal or mailing a check, you should also include this information.

Due date time

When drawing up the lease, you should always include the date by which a tenant is expected to pay monthly rent. Additionally, if there is a time of day (such as during business hours), this information should be present in the document. Most tenants are permitted to pay before the official due date.

Penalties for late payment

Besides the above details about rate, you should also outline a daily rate charge for each day that a payment is late. Do you or your property management company have a policy on checks that bounce? If so, outline any administrative fees that a renter may face if they cannot follow the payment schedule.

Deposit

In many rental and lease agreements, a security deposit is required before move-in. The set amount of this deposit and conditions for return of this money are set in the lease. Within the lease, outline the specific circumstances under which a tenant would forfeit the return of a security deposit upon move-out.

Statement of purpose or usage

Many formal leasing documents ask a tenant to list the names of immediate family members who will live in the property. If these specifics aren’t required, the property may be designated as an individual or family residence only. This means that a renter can’t use the property for other purposes, such as operating a business.

Modifications and repairs

Property owners should use the lease to clarify expectations when it comes to interior and exterior changes, damages, or repairs. For instance, if tenants are allowed to change interior paint colors, are they expected to repaint before move-in? These distinctions protect owners from unexpected changes that may compromise the value or state of the property.  

Cancellation or extension

If a tenant breaks a lease before the official end date, how will this be processed? Many property management teams charge a certain fee based on the length of time remaining in the lease. If a renter wants to extend the lease, outline whether it will be at the same or higher rate.

Animal policy

As a property owner, whether you allow tenants to own animals is a personal choice. Your property manager may have suggestions when it comes to specific types of animals or specifications relating to breed and weight. Additionally, you may choose to include a pet fee within the lease agreement to cover any damage or accidents that take place with a tenant’s pets. 

Final closure and binding paragraph

At the end of many leasing documents is a final statement of acceptance. Both parties should sign and date this acknowledgement in writing. A closing statement signifies that both parties agree to the terms of the lease in totality. 

Arizona Lease Agreement Laws You Should Know

As a property owner, it’s your responsibility to understand the rules that govern your state or city. In the state of Arizona, the best resource is the Arizona Department of Housing. Through this resource, tenants and landlords can download a complete copy of the Arizona Residential Landlord and Tenant Act, which was updated in 2018.

While you should always consult a property management provider or real estate advisor familiar with relevant housing laws, below is a list of some of the major points for Arizona residents.

  • In Arizona, landlords are not required to collect security deposits. If they do, they must agree to certain standards for returning the deposit within 14 days of terminating a lease.
  • Rental agreements and formal leases are required when the length of the agreement is over 12 months. In shorter agreements, formal contracts are strongly encouraged.
  • In Arizona, landlords must provide a 30-day notice to tenants of any changes within the lease. There are additional communication requirements if a landlord chooses to end a lease before the set end date.
  • Within the state, grace periods for late or missed rental payments are applicable for mobile homes, but not for other types of rental properties.
  • As is the case in most states, a landlord or property owner must always follow building codes. These codes may directly affect safety, security, and health of residents.

Consult an Arizona Real Estate Professional Today

As we hope you’ve learned in this resource, drafting a formal lease agreement is a step you must complete when you rent property. Not only does a lease agreement protect you as an owner, but it also legally protects your tenants.

If you need support from a property management team that understands the local market, Century 21 Northwest Realty can help. Drafting lease agreements is one of the valuable services we offer to property owners. You can learn more about comprehensive property management services by connecting with our professional team.

Contact us to start maximizing your real estate investments today!

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