Arizona is a landlord-friendly state, which is good news when you want to invest in properties without worrying about rent control and other strict provisions found in other states. There are policies that must be followed, however.

The Arizona rental laws that you need to know when you’re renting out a premises can be found in the Residential Landlord and Tenant Act. This pertains to standard rental housing (not mobile homes), and it references the rights and responsibilities of both Arizona landlords and tenants.

If you’d like to familiarize yourself with the landlord-tenant laws, you can download the full text from the Arizona Department of Housing.

The Arizona law is in place but there’s no state agency that enforces them. Any disputes that arise between Arizona residential landlords and tenants are considered private and civil matters.

That doesn’t mean you won’t be held accountable if you’re found violating a housing law while renting out your dwelling unit. You have to remember that there are also federal laws in place that govern things like fair housing and disabilities, and those are enforced rather strictly.

As property managers in Mesa, Phoenix, Chandler, Gilbert, and around the East Valley, we stay up to date on all the most important federal, state, and local laws. Today, we want to share some highlights that are especially important for you to understand.

We are not attorneys, and we always recommend you consult a legal expert if you’re struggling with a lawsuit or unsure about a specific policy. The information we’re providing is from the standpoint of how to manage your investment in a way that keeps you compliant with all the necessary regulations.

SECURITY DEPOSIT LAWS IN PHOENIX AND ARIZONA

The security deposit is the amount of money a landlord collects before a tenant moves into their rental. It protects a landlord in case the tenant doesn’t pay rent, leaves before the end of the lease term, or damages their dwelling unit.

Arizona puts some restrictions on how much can be collected, what the deposit can be used for, and how quickly landlords must return it to their tenants at the end of the lease term. Here are the security deposit law basics in Arizona:

  • Security deposits must be refundable. If landlords collect any nonrefundable fees, such as pet fees, from their tenants they have to put that in writing in the rental agreement.
  • There is a limit to how much a landlord can collect as a security deposit from tenants. The amount cannot exceed more than one and one-half month’s rent. If the rent is $1,600 per month, the security deposit cannot be more than $2,400.
  • Landlords are required to return either part or all of the security deposit to the tenant 14 business days after the termination of the lease. If landlords are withholding any part of the deposit, they must provide the tenant with a written and itemized list of deductions.

Making a security deposit mistake can be expensive. If landlords don’t return the balance of the security deposit within the 14 days, with the itemized list of what was deducted and why, the tenant may be able to sue them to recover the money, with damages that equal twice the amount that they wrongfully withheld.

Here’s what landlords don’t have to do:

  • Pay interest on the deposit they hold.
  • Keep the security deposit separate from other funds (although most landlords and investors do).
  • Have to hold the deposit in any specific accounts.
  • Need to know what can be charged to the deposit and what cannot be charged.

In Arizona, landlords may withhold some or all of the security deposit for:

  • Unpaid rent.
  • Breach of lease.
  • Property damage that exceeds normal wear and tear standards.

If a landlord is going to make deductions against their tenant’s security deposit for damage, make sure they have documentation that supports the reason for withholding the money. Landlords want to have their condition reports ready with photos that clearly show the property damage.

HABITABILITY LAWS IN ARIZONA

Arizona property owners are legally required to provide a rental unit that meets basic structural, health, and safety standards. When a landlord signs a residential lease agreement with their tenants, they are providing an implied warranty of habitability.

An implied warranty of habitability means that the landlord has a duty to maintain the rental unit and keep the home fit for residential purposes throughout the entire term of the lease or rental agreement. It puts the responsibility on you - the owner - to repair any damage to vital facilities and systems. The implied warranty of habitability is implied in every oral or written rental agreement in Arizona.

Under the implied warranty of habitability law, the tenant has an obligation to pay rent and the landlord has an obligation to maintain a safe, sanitary, and habitable home. If the Arizona residential landlord breaks the agreement to provide a rental home that’s in a habitable condition, the tenant may be entitled to withhold rent until the necessary repairs are made.

When vital repairs are needed but the property owner has not made them, tenants in Arizona are empowered to make the repairs on their own, and then deduct the cost from rent. This is not a situation you want to find yourself in as a landlord or a property owner. Here’s how the process works:

  • The tenant must give the Arizona landlord 10 days written notice to repair the defect.
  • When the landlord does not make the repair within those 10 days, and the reasonable cost of repair is less than $300 or an amount equal to one-half of the monthly rent, whichever amount is greater, the tenant may fix the problem and deduct the amount of the repair from rent.

Always make the required repairs so you aren’t missing rent from your tenant. You also don’t want tenants making their own repairs. This can put your dwelling unit in danger. Protect its condition and follow the implied warranty of habitability laws.

EVICTION LAWS IN ARIZONA

Eviction actions in Arizona are legally referred to as “special detainer” actions. Under the Arizona Residential Landlord and Tenant Act, landlords can evict tenants for several reasons. The most common reasons that an owner will want to evict a tenant are:

  • Nonpayment of rent
  • Lease violations
  • Illegal activity at the dwelling unit

Before a landlord can begin eviction proceedings, they’ll need to provide their tenant with the appropriate notice. For failure to make rent payments, landlords will have to provide their tenant with a 5 Day Written Notice. The tenant will have five days to pay the amount that’s due, leave the premises, or face eviction proceedings.

The special detainer process occurs like this:

  • Notice is served.
  • A complaint is filed with the justice court or superior court in the county where your rental premises is located.
  • A summons is sent to the tenant, informing them of the eviction hearing date.
  • The hearing occurs, where both the landlord and tenant can make their case to the judge. Then, the judge decides on whether the tenant will be evicted.

If the eviction is successful make sure to handle the tenant's belongings in accordance to the law. Always get legal help when you’re facing eviction. Even the slightest mistake can get your case thrown out and you’ll be back to step one.

FAIR HOUSING LAWS AND ARIZONA RENTAL HOMES

Landlords will also need to know a few federal laws when they rent out a premises in Arizona. The most notable policy, of course, is the federal Fair Housing Law, which protects the following classes of people against discrimination in rental housing. A landlord cannot discriminate or deny housing based on:

  • Race
  • Skin color
  • Religion or creed
  • National origin or ancestry
  • Sex
  • Physical or mental disability
  • Familial status

It’s easy to discriminate without intending to. The way a landlord advertises their rental property or screen their tenants can have inherent bias that they don’t even see. This is why it’s so important for landlords to have consistent and documented procedures for how to attract and place tenants.

Service and support animals are also protected by fair housing. This is often a tricky area for landlords to navigate. If a tenant or an applicant has a service animal, you are required to allow that animal in your premises - even if you don’t allow pets. You cannot charge a pet fee, a pet deposit, or pet rent on a service animal or an emotional support animal.

While service animals are trained to do a specific task, emotional support animals are not. They offer companionship and support to a tenant who needs it. You are permitted to ask for documentation from a medical professional that the support animal is needed, but you are not allowed to deny the animal or treat it like a pet.

We work hard to stay on top of all the laws that pertain to your rental premises in Arizona. We know you don’t have the time or the resources to know what changes are coming and how you can best prepare yourself to comply with them.

This is why working with a professional property management company makes so much sense. We keep you compliant and we stay one step ahead of every new policy that impacts your rental premises.

If you have any questions, please don’t hesitate to contact us at TCT Property Management Services. We manage homes in the East and West Valley, including Mesa, Gilbert, Chandler, Scottsdale, and Phoenix.