Important Updates to Arizona Law That Affect Landlord and Tenants in 2019

  1. SUBSIDIZED HOUSING: As of January 1, 2019, all subsidizing housing cases have had some new changes in how a landlord addresses any breach. First, the landlord must state in an Eviction Complaint that the eviction involves a subsidizing housing unit. Additionally, the full amount of contracted rent must be listed separately from the HAP portion and the Tenant’s portion. Additionally, HB2358 helped clarify that ARS 33-1371 (the partial payment rule) allows a landlord to accept the HAP portion of the rent from a housing provider without it counting as an acceptance of a partial payment by the tenant. This change goes into effect August 27th but generally is being honored at this time since it was a clarification vs a modification bill.

  2. RENTAL TAX INCREASE NOTIFICATION RULE: HB 2445 now requires all cities and municipalities to provide a written notice at least 60 days prior to increasing the TPT rental tax.

  3. VACATION RENTALS: HB2672 addresses short term vacation rentals and impacts ARS 9-600.39 and ARS 42-5042. The owner is required to get a tax license, list that number on all advertisement and listings, register the contact information for the responsible party, clarifies that the rentals can’t be used for non-residential purposes and institutes some fines for violation of these rules.

 
 

**AS A REMINDER, THERE WERE SEVERAL CHANGES IN 2018 THAT IMPACTED THE LANDLORD TENANT INDUSTRY AND STILL ARE CREATING ISSUES FOR LANDLORDS. **

 
 
  1. CHANGE IN THE RULES REGARDING THE STORAGE OF TENANT’S PROPERTY FOLLOWING AN EVICTION OR AN ABANDONMENT (went into effect the first week of August 2018): This bill modified and combined two different statutes that governed how long landlords must store tenant’s belongings. The significant change is that the landlord only has to store those possessions for 14 days after a lock out by the constable (previously 21 days) but this same rule applies for items that have been left behind after the abandonment process has been completed (previously 10 days). This new law also states that a landlord is not required to store perishable items or plants and can immediately remove any items that are a health and safety risk. Additionally, they can arrange for any animals to be removed and boarded by a third party for that 14- day period. Finally, it also allows a landlord to immediately dispose of any possessions left behind after the tenant returns their keys.

  2. STATUTE OF LIMITATIONS FOR SECURITY DEPOSIT DISPUTES: The law now provides that if a tenant does not dispute the deductions from a security deposit within 60 days after termination of the tenancy, the amount due is final and further claims are waived. It is imperative that you clearly document when and how the disposition was sent out.

  3. PROHIBITION ON FRAUDULENTLY MISREPRESENTING AN ANIMAL AS A SERVICE ANIMAL: It is now illegal to misrepresent an animal as a service animal in a public place and there can be a civil penalty imposed for breaking this law. Because HB2276 doesn’t actually impact the Arizona Fair Housing Act, it will not affect landlords who have tenants who want to add a service or emotional support animal to the lease but it is still a significant change in the law that impacts the leasing office.

  4. JUDGMENT EXPIRATION/RENEWAL: This bill now extends the validity of a judgment to ten years (increased from five years) and allows for ten-year renewals (previously five years).

  5. SEXUAL ASSAULT ON THE PREMISES: A change was made in ARS 33-1318 and now adds sexual assault on the premises as an act of violence that allows the tenant to terminate their lease early without penalty.

  6. SMALL CLAIMS PILOT PROJECT: The Justice Courts are operating two pilot projects. It is imperative that you determine which rule apply to the jurisdiction where your case is filed. Contact the court directly to find out if any special pilot project rules apply!! Small claims cases can be filed by anyone who believes the other party owes them up to $3,500. In the landlord tenant arena, these types of cases are typically filed by tenants against their previous landlords. One of the newest proposed changes that potentially can result in serious harm to the landlord is that the hearing date for the cases filed in these jurisdictions will be set at the time the plaintiff files the case. This change comes with some perils because the plaintiff can serve the landlord by mailing the documents via certified mail, return receipt requested, to the onsite office at the apartment community, the home office that may be located in another state or even the statutory agent and that hearing is set between 45 and 60 days from the filing date. The current rules require the plaintiff to serve the other party and then apply for the entry of default against that party if they do not file an Answer within 20 days (30 days if served out of state) of being served and prove that they mailed a copy to the other party so that there is one final chance for the defendant to avoid the default judgment. All landlords are encouraged to immediately set up protocol for the processing of any certified letters or documents that have been served by a process server, sheriff deputy or constable. With so many staff members that may inadvertently accept service by signing for the certified mail, it is very important for there to be specific protocol and training on the proper steps all employees (including temporary workers) must follow. No written Answer is required but this is the best way to carefully explain the landlord’s position and why it believes that the plaintiff is not entitled to a judgment against the landlord. If the landlord wants to have an attorney represent them, they must file a Motion to Transfer the case to the civil division at least 15 days before the hearing date.