Know Arizona Landlord and Tenant Laws If You’re Buying an REO Property for Rental Income

If you’re planning to purchase an REO property in Arizona for rental income, be sure to find out what rights you have as a landlord, as well as what laws there are to protect tenants. When buying a foreclosed home to rent out, the first thing you’ll want to do is find out if the home is currently occupied. If it is, the current tenant will have rights, and you’ll need to find out what they are. Rights to remove tenants are different when a home is foreclosed on than they are when the owner voluntarily sells the home.

Start with the federal laws. Those will usually trump most state laws, unless the state laws are more in favor of protecting the tenants.  When you buy a foreclosed home that is occupied, make sure you understand how the occupants are protected under The Helping Families Save Their Homes Act of 2009. If the current tenants were not the owners who were foreclosed on (or family members of the owners), you’ll need to give them 90 days notice of eviction if they were renting month-to-month. However, if they signed a lease, then you will have to allow them to stay until the end of their lease. An exception to this is if you are planning to live there yourself, in which case, you just need to give the tenants 90 days notice of eviction.

Once you’ve figured out what to do about the current renters, it’s up to you to decide whether to sign a new lease with those same renters or find new renters. In either case, you will have certain responsibilities as a landlord, and those will vary by state. Here are some things to keep in mind if you’re planning to become a landlord in the state of Arizona:

• First of all, familiarize yourself with the Arizona Residential Landlord and Tenant Act (ARLTA). This document covers the legal rights and responsibilities of landlords and tenants in Arizona. It also contains information about steps to take when either party does not own up to his/her responsibilities or obligations in the rental relationship. You can get a free copy of the ARLTA on the Secretary of State’s website.

• If you’re faced with a circumstance in which you need to evict a tenant in Arizona, you’ll need to supply an eviction notice in writing.  The amount of time you must give the tenant to move out depends on the reason for eviction. The more serious the infraction, the less notice you have to give. If the tenant doesn’t pay the rent, you must give him/her five days notice and an opportunity to pay the amount due. If the violation is one that affects the health and safety of the tenant or those around him/her, then a five-day written notice is required. For less serious violations, such as unauthorized pets, you’ll have to give ten days notice. In cases of more serious breaches of contract, such as gang activity, firing a weapon or other gun on the property, physically harming other people, etc., you are allowed by law to terminate the rental agreement immediately (still with a written eviction notice). Read more about the process of evicting a tenant in Arizona to make sure you are in compliance with the landlord and tenant laws of that state.

• You should learn about any exceptions to the landlord/tenant rights and restrictions in Arizona. For example, tenants in the military or tenants who are victims of domestic violence are allowed to break their leases under certain situations, as long as they go through the proper legal channels. Learn more about the circumstances in which Arizona tenants who are members of the military and victims of domestic violence are allowed to break their leases.

• You, as the new property owner, are responsible for the maintenance and upkeep of the property. Be sure to respond within a suitable amount of time and address any legitimate issues appropriately. In fact, be proactive when you first take ownership and ask the tenants if everything is working properly. For more information about maintenance responsibilities and rights to inspect, read about the Landlord Right of Entry Laws in Arizona.

Of course, there is a lot more information out there to be learned. Make sure you are diligent about learning your rights and your tenants’ rights at the federal, state, and local levels. Renting out a property can be a great investment, but you have to know the property and laws before you really know what you’re getting yourself into as a landlord and an investor.

Learn more about Federal and Arizona Rental Laws:

National Low Income Housing Coalitions’ Renters in Foreclosure Toolkit

Local Tenant Rights, Laws, and Protections in Arizona from HUD.gov