Investing in real estate in a new state is a substantial decision. If you’re considering investing in Arizona, there are several questions to consider: how much should I charge for rent? Are background checks illegal in tenant screening? How do I evict a tenant in Arizona? These questions and others can be overwhelming, but we’re here to help. Below are the top laws to consider when determining whether Arizona should be the home for your next rental property.
Fees and Rent
When renting to a tenant in Arizona, there are a few things to know about charging rent and other fees. There are no statewide regulations regarding application fees or rent increases, so you can use your own discretion when it comes to those issues. However, according to Arizona late fee laws, if your tenants turn rent in late, you can charge $5 a day after a mandatory five-day grace period. Also, if your tenant uses a check to pay rent and it bounces, you can charge a service fee of up to $25.
Arizona tenants also have remedies if you fail to uphold your side of the rental agreement. If you fail to make necessary repairs to the property, Arizona law allows tenants to withhold up to $300 or half of their monthly rent, whichever amount is greater. Tenants can also use the “repair and deduct” remedy to arrange for repairs themselves and deduct the cost from rent. The repairs must be completed by a licensed contractor, and the amount they deduct must be the actual (and reasonable) cost of the repairs.
Eviction laws in Arizona exist to protect both tenants and landlords during the process of eviction. When evicting any tenant, it’s important that you are cognizant of all the rules that your state establishes regarding evictions. There are a few different notices that landlords need to issue in various scenarios to remain compliant.
If you are evicting a tenant for nonpayment of rent, they have five days to pay what they owe before they have to leave. Therefore, you must serve the tenant a five-day notice to pay or quit the unit. If the tenant violates another term of their lease, they have ten days to fix the violation before they are expected to move out (ten-day notice to cure or quit). Finally, if the tenant commits some kind of irreparable act such as threatening another person, engaging in dangerous behavior, or engaging in unlawful drug activity, the landlord can immediately terminate the rental agreement.
Under federal law, there are seven classes that are protected against discrimination in housing. These classes are race, color, religion, gender, national origin, familial status, and disability. Arizona state law protects these classes as well, and according to Arizona criminal background check laws, landlords also cannot enforce a blanket ban against tenants with criminal convictions. However, landlords may discriminate against tenants who have charges related to the illegal manufacture or distribution of drugs.
Additionally, when reviewing credit reports during the screening process, landlords may not share any tenant credit information with anyone who doesn’t have a legal reason to view it. They also have a responsibility to dispose of credit reports after they use them for tenant screening, and if applicants are denied based off their credit score or history, the landlord needs to tell them so.
Keeping and returning your tenants’ security deposits is a key responsibility for landlords. Tenants work hard for that money, and you should always treat it as though it will be returned to them in full. In Arizona, the deposit limit is 1.5 months’ rent, and it must be returned within 14 days, excluding Saturdays, Sundays, and other legal holidays. However, there is no requirement to pay interest on the deposit, nor is there a statute specifying where it should be held.
If landlords withhold funds from the deposit, it must either be for unpaid rent, to cover damages caused by the tenant, or for any other charges previously specified in the lease agreement. The tenant must be provided with a list of all the deductions when they get the remainder of their security deposit back.
Make sure you do your own thorough research into Arizona state law before taking the plunge and investing in property there. Each state has their own rules and regulations when it comes to real estate, so staying up to date on all the local laws is the best way to remain legally in line.